Tokyo is pushing back against a proposed $6.3 billion fee for SoftBank, spearheaded by billionaire Masayoshi Son, related to a massive gas-fired power plant project in Ohio, signaling growing anxiety over a $550 billion US-Japan investment plan unveiled with former President Donald Trump. The dispute highlights a deepening rift between the two nations as Japan grapples with the terms of the deal and its perceived lack of control over project selection.
The proposed fee, equivalent to roughly ¥1 trillion, would have been paid to SoftBank for developing and operating the 33-gigawatt power station, the first major undertaking stemming from the trade agreement that granted Japan tariff relief in exchange for substantial investment in the US. However, Japanese officials intervened, ultimately reducing the fee by more than 90%, according to multiple sources familiar with the negotiations. SoftBank is now slated to receive payments over a 15- to 20-year period contingent on reaching the plant’s target capacity of 9.2 gigawatts.
The initial proposal for a substantial fee arose because SoftBank, as the project developer, would otherwise not directly profit from the power station’s operation. The plant itself will be entirely financed by Japan and jointly owned by the US and Japan through a special-purpose vehicle established under the trade agreement. This structure, while intended to foster collaboration, has fueled concerns in Tokyo that Japan is bearing the brunt of the financial burden while ceding control over key decisions.
Growing Concerns in Tokyo
The disagreement over the fee reflects a broader sense of unease within the Japanese government. Officials fear that Japan is being sidelined in the selection of projects under the investment plan and is being pressured to support companies with limited relevant experience. “Why do we have to pay a fee?” one senior official in Tokyo reportedly questioned, highlighting the perception that Japan is being asked to fund the project without receiving commensurate benefits.
The financial structure of the deal further exacerbates these concerns. Under the terms of the agreement, profits from the investments will initially be split 50/50 between Japan and the US until Tokyo recoups its initial investment. However, once Japan has recovered its funds, the US share increases to 90%. This arrangement has raised questions about the long-term fairness of the deal and the potential for the US to disproportionately benefit from Japanese investment.
A Critical Summit Looms
The escalating tensions come ahead of a crucial summit between Japanese Prime Minister Sanae Takaichi and Donald Trump in Washington on March 19. Described by senior officials as a “make or break” moment, the meeting is expected to focus on the future direction of the US-Japan investment plan. Takaichi is expected to present Trump with a second round of at least three new investment proposals, including projects in copper smelting, display manufacturing, and nuclear power with Westinghouse.
The trade agreement grants Trump ultimate decision-making authority over the investments, requiring Japan to provide funding for approved projects within 45 business days of their announcement. This rapid timeline has added to the pressure on Japanese officials, who are still advocating for a more transparent and competitive bidding process for the operation of the Ohio power plant, given SoftBank’s limited experience in the energy sector.
Son’s Unique Position and Past Investments
Masayoshi Son’s close relationship with Trump has been central to the trade agreement since its inception. He originally proposed a joint US-Japan sovereign wealth fund to then-Commerce Secretary Howard Lutnick before the $550 billion investment pot was established, and remains a key figure capable of proposing deals of the necessary scale. As evidenced by a recent meeting at Mar-a-Lago, Son maintains a direct line of communication with the former president.
SoftBank has already begun placing large-scale orders for the construction of the power plant in Portsmouth, Ohio, including a $10 billion order for approximately 170 turbines from GE Vernova. The company plans to sell the electricity generated by the plant to data centers it will also operate, serving customers such as OpenAI, in which SoftBank holds a significant stake.
However, Son’s investment track record is not without its challenges. SoftBank’s $18.5 billion investment in WeWork, which ultimately sought bankruptcy protection, and a failed venture into robot pizza-making with Zume, demonstrate the risks associated with his bold investment strategy. Despite these setbacks, Son continues to wield considerable influence in both the Japanese and American business landscapes.
Funding and Guarantees
Japan’s funding for the power plant will come from both the Japan Bank for International Cooperation (JBIC) and commercial lenders. Nexi, Japan’s export credit agency, is expected to guarantee 90% or more of the commercial portion of the financing. However, commercial banks remain hesitant despite the generous guarantees, and the ratio of funding between JBIC and commercial lenders has yet to be finalized.
SoftBank, JBIC, and the US Commerce Department declined to comment on the specifics of the deal. Nexi confirmed it is in discussions but stated that no final decisions have been made regarding the level of its coverage.
The situation surrounding the US-Japan investment plan remains fluid. The upcoming summit between Takaichi and Trump will be pivotal in determining the future of the agreement and addressing the growing concerns in Tokyo. The outcome will likely shape the economic relationship between the two countries for years to come. The next key date is March 19th, when Prime Minister Takaichi will meet with Donald Trump to discuss the future of the investment plan.
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