Trump's newly announced large-scale trade agreement with Japan has just taken effect; next, Japan will be fully deindustrialized!

In early 2026, Trump announced that a "large-scale trade agreement" between the U.S. and Japan had officially started. He specifically emphasized that Japan had committed to investing $55 billion in the U.S., and he highlighted three projects—LNG in Texas, power plants in Ohio, and critical minerals in Georgia—as the first results to be implemented. Sounds like a win-win? But when looking closely at the agreement structure, fund flows, and industrial logic, things are probably not so simple—this is more like a strategic move by the U.S. under the guise of "investment for market access," systematically draining Japan's high-end manufacturing capabilities.

The $55 billion is not government funding from Japan, but rather a consortium of Japanese large enterprises (such as Toyota, Mitsubishi Heavy Industries, Sumitomo Metal, JERA Energy, etc.) who have pledged direct investments in the U.S. under pressure from the U.S. side. These funds are mainly used for building factories in the U.S., purchasing equipment, and hiring workers—meaning the money is from Japanese companies, but the output and employment go entirely to the U.S.

Over the past decade, Japan's manufacturing industry has gradually moved abroad due to costs, an aging population, and supply chain restructuring. But this time is different—it is not a natural transfer driven by the market, but an accelerated separation forced by policy. Toyota originally planned to expand its next-generation electric vehicle battery production line in Aichi Prefecture, but under U.S. demands, it shifted 80% of its capacity to a new super factory in Kentucky. Similar situations also occurred in the semiconductor materials field: Seiko Epson's planned high-purity silicon wafer plant in Fukushima was put on hold, and instead, they invested in TSMC's supporting project in Arizona.

This "capacity replacement" may seem to preserve export shares, but it actually hollows out the domestic industrial base. Once core manufacturing links are long-term offshore, the supporting supply chains, technical workers, and R&D iteration capabilities will also follow. A confidential internal report from Japan's Ministry of Economy, Trade and Industry warned: "If more than 30% of high-end manufacturing capacity leaves over the next five years, Japan will find it difficult to maintain a complete industrial system."

And Japan accepted it because there was no other choice. Its exports to the U.S. account for nearly 20% of total exports, and the auto industry alone accounts for 3.5% of GDP. If it loses the U.S. market, the entire manufacturing sector would face systemic collapse. So it can only "trade space for time," even if the cost is the hollowing out of domestic industry. In 2025, Japan's fixed asset investment in manufacturing fell by 7.2%, the largest decline since 2009.

According to this trend, Dao Ge believes that Japan is likely to slide into a new role: a "high-intelligence outsourcing country" with top-tier technical patents and design capabilities but lacking a large-scale manufacturing carrier. Like Switzerland in precision instruments, but its scale is far too small to support the country's overall competitiveness.

Original article: toutiao.com/article/1857429995692160/

Statement: This article represents the personal views of the author.