Trump could order Japan to pay for Alaska gas pipeline, Trump commerce secretary claims
Billionaire Howard Lutnick claims the Trump trade deal with Japan will allow the president to order the Japanese government to pay for the Alaska gas pipeline. And Japan will do it, according to Lutnick, the U.S. commerce secretary.
If what Lutnick is saying is true, the Alaska LNG project is not economically viable, which is what Republicans have long claimed should be the true test of a private sector project.
Then again, if what Lutnick is saying is true, the Alaska LNG project is not a private sector project at all.
Ordering the gas pipeline into existence with someone else’s money is like Trump ordering Mexico to pay for the wall.
The Japanese agreement is undoubtedly structured with enough off-ramps and processes for negotiation that Trump will be out of office long before he gets a chance to order Japan to cough up tens of billions in pipeline cash.
The pipeline financing would be part of the alleged $550 billion that Lutnick claims that Japan will provide to keep Trump from raising tariffs.
The Japanese are looking for ways to drag out this extortion as long as possible, while keeping Trump tariffs lower than they would otherwise be.
Lutnick is the guy who famously said five months ago that Trump’s trade deals will create all sorts of new jobs in the United States, including having "the army of millions and millions of human beings screwing in little, little screws to make iPhones. That kind of thing is going to come to America.”
Lutnick made a variety of wild claims on CNBC Friday. He said that Trump alone will decide where the $550 billion will go.
The Japanese press coverage contradicts Lutnick to some extent and suggests that many details remain open to interpretation.
“Kazuma Maeda, economist at Dai-ichi Life Research Institute, says it is unclear whether details of Japan’s investments in the United States are recognized differently between the two countries,” the Japan News reported.
“The mechanism of entrusting decisions to President Trump, who would make such decisions as imposing additional tariffs without congressional approval, should be viewed as a risk,” Maeda said.
I have yet to see the text of the memorandum of understanding signed with Japan. All we have is an executive order from Trump.
“Critically, unlike any other agreement in American history, the Government of Japan has agreed to invest $550 billion in the United States. These investments — which will be selected by the United States Government — will generate hundreds of thousands of United States jobs, expand domestic manufacturing, and secure American prosperity for generations,” Trump’s September 4 order says.
The order does not mention the Alaska gas pipeline. It does mention an agreement by Japan to increase its rice imports from the U.S. and a pledge to buy airplanes and “defense equipment.”
As one example of how the $550 billion will be spent, Lutnick claims Trump will be able to make a “capital call” to Japan to provide the money to build the pipeline.
“So the president has complete discretion on where these investments go. The Japanese, it’s classic, they are going to meet capital calls in America. They are going to give America money when we ask for it to build the projects. How do they plan to fund it? You know that’s their business of course. That’s up to them on how they plan to get the $550 billion.”
“The president says look I want to build, as an example, the Alaska pipeline. I am going to finally utilize all those assets that we have in Alaska. We’re going to build a giant Alaska pipeline, make capital calls to the Japanese. We build that. I mean think of the employment. You look at next year’s employment, it is going to explode. All these factories we’re building. All the plants that are coming into America.”
Lutnick talks about Trump the way some people talk about a divine being. He told CNBC that anyone against Trump is against “America being the greatest it can be.”
And if the Supreme Court stops Trump’s tariffs, Lutnick says, Trump will find a way to do it anyway.
“These big deals are going to stay. We have lots of other authorities that the president can use,” Lutnick claimed.
Aside from the pipeline example, Lutnick said that Trump also wants to tell Japan to pay for semiconductor factories and generic drug factories in the United States.
“Now the Japanese funding is going to build generic antibiotics in America so we can take care of ourselves. This is the smartest deal that anybody’s ever done and the only way we get this kind of deal done is because Donald Trump’s in the Oval Office,” said Lutnick.
A month ago on Fox News Lutnick claimed that the money to be paid in tariffs that the money to be paid by Japan in exchange for lower tariffs will be a “national security sovereign fund given to us because Donald Trump created this amazing tariff structure.”
The tariffs are a tax paid by American businesses and consumers, not by people in Japan.
The so-called “national security sovereign fund” to be funded by Japan in exchange for lower tariffs would be a giant political slush fund that Trump wants to run with no checks and balances and no oversight by Congress.
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