President Donald Trump and Japanese Prime Minister Sanae Takaichi announced a nuclear power project in the southern US, the latest initiative stemming from an investment fund the countries set up as part of a trade pact.
At the White House on Thursday, the two leaders said GE Vernova Inc. and Hitachi Ltd. will build BWRX-300 small modular nuclear reactors in Tennessee and Alabama at a cost of up to $40 billion, according to a White House fact sheet. Japan is also investing up to $33 billion in natural gas-fired power plants in Pennsylvania and Texas.
The projects are intended to stabilize electricity prices and strengthen the U.S. leadership in global technology competition, according to a White House official who spoke on condition of anonymity before the announcement, referring to a global race by tech giants to build energy-intensive data centers that would drive the development of artificial intelligence.
Small modular nuclear reactors, known as SMRs, would help fuel U.S. industrial growth by adding power that can be produced on demand, the official added. Specific details, including when the reactors would be operational, were not immediately clear.
While the Trump administration and the nuclear power industry are taking steps to accelerate the development of these reactors, most such proposals still need regulatory approval. No SMRs have been added to US networks yet.
SMRs will have a smaller capacity than traditional reactors, which typically boast an output of 1 gigawatt. However, the technology is expected to develop faster than the decade it usually takes to locate, build and finance traditional reactors.
The reactor deal is the latest in a $550 billion fund agreed by the US and Japan as part of a deal that saw Trump cut tariffs on cars and other fees. The two countries also last month announced a trio of debut projects totaling $36 billion, including a U.S. oil export terminal, a gas-fired power plant and a synthetic diamond plant.
The U.S. and Japan also signed an agreement on Thursday to accelerate cooperation on deep-sea critical minerals, including rare earth mud near Japan’s Minamitorishima island. They also agreed on a plan to increase production and diversity of critical minerals, including a trade initiative supported by price caps or other measures.
Trump and Takaichi also pledged to continue cooperation in science and technology, space, national defense and regional security.
For Japan, the trade deal codifies ties with the U.S., locks in a more favorable tariff rate for auto exports and creates a potential fast track for direct investment — one that could calm concerns that swirled around the Japanese firm’s tumultuous process to buy U.S. Steel, which Trump ultimately approved.
In the US case, Trump will seek to present the mega-fund deals as a sign of America’s industrial rebirth and a justification for his frenzied imposition of tariffs, which has disrupted trade ties and reshuffled some supply chains.
“The scope of these projects is so great and they could not be done without one very special word, TARIFFS,” Trump said in a social media post last month.
The exact process by which the $550 billion will be allocated remains somewhat unclear. The staggering sum also carries potential political risk for Japan if major flagship initiatives run into trouble.
