Trump’s $900 Billion IOU: The Japan–South Korea “Investment” Mirage

(00:00.492)

Yeah, Japan and South Korea, guess they’re saying checks in the mail. I told you that this was not going to happen. President, you know, with his trade deals there, he’s been touting these deals where Japan and South Korea are just going to give him cash. Just give him cash. So where we’re at right now.

Trump was heading off to South Korea for the APEC meetings and Scott Bissett says, we’re putting the finishing touches on the negotiations over Seoul’s promise to invest some $350 billion in the United States. And because of that promise, Trump’s is going to cut his tariff to 15 % from 25%.

is the Japan, oh, they agreed to cut the USA $550 billion check in return for tariff reduction.

Yeah, yeah. Again, let’s take a look at the fine print, shall we? The memorandum of understanding with Japan. South Korea’s is still being negotiated. Now, the Japan memorandum of understanding, and this is from the Wall Street Journal, says the money will be invested in sectors determined to advance economic and national security interests such as metals, energy,

artificial intelligence and quantum computing. But this is not like Taiwan semi conductor saying, hey, we’re going to build a plant in Arizona. These are government to government investments that will be at the discretion of the US government, meaning the president and his deputies. In essence, kind of like a sovereign wealth fund. Sovereign wealth fund.

(02:01.678)

without any sort of input from Congress.

Hmm. In essence, the administration is gonna set up a special purpose vehicle for each investment to be chosen and controlled by the president or his preferred manager. Japan will have 45 days to pony up the cash. If Japan refuses, it could be hit with higher tariffs. Tokyo would be a limited partner.

in this government equity deal. Japan and the US government will split the profits if there is any until an unspecified deemed allocation amount is achieved. After that, the United States gets 90 % of the profits. Now, okay, let’s kind of look at how realistic that is. $350 billion. That’s South Korea. That’s 6.5%.

of South Korea’s GDP spread over the three years that are left in Trump’s term. Japan would have to spend $183 billion a year through 2028 under its memorandum of understanding, or 4.4 % of their GDP for each of the next three years.

Now, Japan’s bank for international cooperation has only $35 billion in assets. Lutnick said last month that Japan’s going to have to blow up their balance sheet and borrow heavily to fund its MOU commitments.

(03:49.39)

Yeah, yeah. You think that this is gonna fly with the voters in Japan and South Korea?

Again, not to mention the fact, you don’t see the moral hazard here of giving the president of the United States that type of power, that type of money, no oversight, no nothing.

There’s never been in history, no precedent for giving hundreds of billions of dollars to a president to invest in whatever he sees fit.

Again, know, using arbitrary tariffs, who knows if they’re going to go away to coerce people to pony up. I want everybody to just go back in time because again, you know, I’m sorry, you’ve got to be consistent in your belief system. The whole green energy slush fund, that’s what we used to call all that that green money that

Biden was throwing around. The difference was that money was actually appropriated by Congress.

(05:14.43)

I’m telling you right now and you know it as well as I do if this was Kamala Harris was Joe Biden with Barack Obama doing this thing Republicans would be throwing a fit They would be throwing the fit and that that’s the problem that we have we don’t really have We don’t really have Congress anymore do we It’s it’s all party loyalty again, I would strongly

Suggestions, you know, you do take an oath, right? When you become a member of Congress to uphold the Constitution. Does that mean anything to you Republicans at all? At all? Guess not. Watchdog on wallstreet.com.