Saturday, March 29, 2025
Ahead of PM Modi’s Japan visit, US suffers setback as $550 billion investment package put on hold
Tokyo/Washington, August 28, 2025 – Just a day before Prime Minister Narendra Modi embarks on his official visit to Japan, the United States has been dealt a blow. Japan’s chief trade negotiator, Ryoshi Akazawa, has abruptly canceled his scheduled visit to Washington, stalling discussions on a massive $550 billion (₹48 lakh crore) investment package.
Akazawa was expected to travel to the US on Thursday to finalize an agreement tied to American tariff reductions. Under the proposed deal, Japan would commit to a multibillion-dollar investment package in exchange for the US lowering tariffs on Japanese imports from 25 percent to 15 percent. The last-minute cancellation means the US could face significant delays in securing the investment.
The setback comes at a critical juncture, with Prime Minister Modi set to arrive in Tokyo on Friday to attend the 15th annual India-Japan summit. Modi and Japanese Prime Minister Fumio Kishida are expected to discuss a range of strategic partnerships, including defense cooperation, technology, and the Quad alliance. Japanese officials hinted that negotiations with the US will likely resume after consultations with Modi.
Japanese government spokesperson Yoshimasa Hayashi explained that certain “administrative-level issues” with Washington needed further discussion, prompting the cancellation. Sources in Tokyo suggested Japan is reluctant to finalize terms before aligning with India on broader economic and strategic matters.
The US administration, however, had been openly enthusiastic about the deal. Earlier this week, US Commerce Secretary Howard Lutnick unveiled the proposed Japanese investment package, while President Donald Trump claimed it was structured in America’s favor, boasting that the US would retain 90 percent of the profits. That remark, according to Japanese officials, sparked discontent in Tokyo, further complicating negotiations.
For Washington, the delay is a major diplomatic and economic setback. Analysts warn that the pause not only threatens a massive influx of Japanese capital but also risks giving India greater leverage in upcoming trilateral and Quad discussions. With Modi’s Tokyo visit expected to reinforce India-Japan economic ties, Washington may find itself at the negotiating table with reduced influence.
