Japan hopes to "deal with Trump" by reducing its surplus in American chips

Japan has proposed to significantly purchase American semiconductor products during tariff negotiations with the United States, with the procurement scale potentially reaching hundreds of billions to 1 trillion yen.

According to media reports on Wednesday, the Japan-U.S. tariff negotiations included a plan to purchase billions of dollars worth of American semiconductor products. The Japanese government plans to support domestic companies in procuring products from American chip giants like NVIDIA through subsidies, with potential import amounts reaching up to 1 trillion yen (approximately 6.94 billion USD).

The report stated that in addition to directly purchasing American chip products, the plan also includes strengthening the U.S.-Japan semiconductor supply chain through domestic production of wafers and chemicals. Amid geopolitical tensions and the risks of over-reliance on third-party foundries, both countries believe these efforts are crucial for economic security.

The report pointed out that Japan views the proposal to purchase chips as a "negotiating chip" to address the Japan-U.S. trade deficit, which currently stands at about 10 trillion yen. NVIDIA, as the controller of approximately 80% of the data center semiconductor market, is a core supplier in Japan's procurement proposal. NVIDIA is set to announce its Q1 fiscal year 2026 earnings today, and as of Tuesday's market close, NVIDIA's stock price remains below the year-to-date level of $138.31.

Japan's Negotiation Strategy: Investment Procurement for U.S. Tariff Concessions

Investment cooperation is an important bargaining chip in Japan's trade negotiations.

Wall Street Journal previously reported that on May 26, Japan planned to offer a series of economic and technological cooperation, including investing in the Alaska liquefied natural gas (LNG) pipeline project and sharing shipbuilding expertise, in an effort to pave the way for a tariff agreement with the U.S. by mid-June.

Japanese Prime Minister Shigeru Ishiba stated last Sunday that in light of the increasingly prominent security issues in the Arctic region, Japan will focus on promoting its icebreaker construction capabilities while proposing to assist in the maintenance of U.S. military vessels patrolling the Asia-Pacific region. These statements were made after his personally selected trade negotiation representative, Akizawa Ryo, completed the third round of negotiations with U.S. representatives in Washington and returned to Tokyo.

Akizawa Ryo stated after the third round of negotiations that he would accelerate the negotiation process, aiming to reach an agreement between the leaders of the two countries during the G7 leaders' summit in Canada in June. Reports indicate that the fourth round of tariff negotiations is scheduled to be held on the 30th.

Additionally, Japan may propose participation in the estimated $44 billion Alaska gas project. Although there are still concerns about the project's costs, this is clearly Japan's attempt to demonstrate its contribution to the U.S. economy.

There are also reports that SoftBank founder Masayoshi Son has proposed establishing a Japan-U.S. sovereign wealth fund to invest in technology and infrastructure sectors.

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