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

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Trump is touting massive “investment deals” from Japan and South Korea — $550 billion here, $350 billion there — but Chris digs into the fine print and calls it what it is: a fantasy wrapped in dangerous precedent. These aren’t private-sector deals but government-to-government “sovereign wealth” funds giving the U.S. president direct control of hundreds of billions with no congressional oversight. Chris breaks down why the math doesn’t add up, why Tokyo and Seoul’s voters will never go for it, and why Republicans would be howling if Biden tried the same stunt. Another example, he warns, of party loyalty replacing constitutional principle — and Congress asleep at the wheel.

Episode Transcript

Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact that we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.

Speaker 2 (00:16):
Yeah, Japan and South Korea, they're saying checks in the mail.
I told you that this was not going to happen.
President with his trade deals there. He's been touting these
deals where Japan and South Korea are just gonna give

(00:38):
him cash? Does give him cash? So where we're at
right now, Trump was heading off to South Korea for
the APEC meetings and Scott the senses we're putting the
finish in touches on the negotiations over Soul's promise to
invest some three hundred and fifty billion dollars in the

(01:01):
United States. And because of that promise, trump'ss gonna cut
his tariff to fifteen percent from twenty five percent. He's
the japan all they agreed to cut the US a
five hundred and fifty billion dollar check in return for
tariff reduction.

Speaker 1 (01:19):
Yeah.

Speaker 2 (01:20):
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

(01:43):
and national security interests such as metals, energy, artificial intelligence,
and quantum computing. But this is not like Taiwan semi
conductors saying, hey, we're going to build a plant in Arizona.
Are government to government investments that will be at the

(02:05):
discretion of the US government, meaning the President and his
deputies an essence, kind of like a sovereign wealth fund,
sovereign wealth fund without any sort of input from Congress.

(02:28):
In essence, the administration is going to set up a
special purpose vehicle for each investment, to be chosen and
controlled by the President or his preferred manager. Japan will
have forty five days to pony up the cash. If
Japan refuses, it could be hit with higher tariffs. Tokyo

(02:51):
would be a limited partner in this government equity deal.
Japan and the US government will split the profits if
there is any, until in unspecified deemed allocation amount is achieved.
After that, the United States gets ninety percent of the profits. Now, okay,

(03:11):
let's let's kind of look at how realistic that is. Okay,
three hundred and fifty billion dollars that's South Korea. That's
six point five percent of South Korea's GDP. Spread over
the three years that are left in Trump's term, Japan
would have to spend one hundred and eighty three billion

(03:33):
dollars a year through twenty twenty eight under its Memorandum
of Understanding, or four point four percent of their GDP
for each of the next three years. Now, Japan's Bank
for International Cooperation has only thirty five billion dollars in assets.

(03:55):
Lutnik said last month that Japan's gonna have to blow
up their balance sheet and borrow heavily to fund its
MoU commitments. Yeah, yeah, yeah, you think that this is
gonna fly with the voters in Japan and South Korea. Again,

(04:22):
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

(04:45):
giving hundreds of billions of dollars to a president to
invest in whatever he sees fit. Again, you know, using
arbitrary tariffs. Who knows if they're going to go away
to co worse people, to pony up. I want everybody
to just go back in time, because again, you know,

(05:09):
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 was that money was actually
appropriated by Congress. I'm telling you right now, and you

(05:32):
know it as well as I do. If this was
Kamala Harris, was Joe Biden, would Barack Obama doing this thing?
Republicans would be throwing a fit. They would be throwing
a fit. And that's the problem that we have. We
don't really have. We don't really have Congress anymore, do we.

(05:53):
It's it's all party loyalty. Again, I would strongly suggest
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. Watch Talk on Wall Street dot Com