Saving money is essential, but saving too much in a traditional savings account could be quietly costing you. If you’ve already maxed out your 401(k) contributions, built a robust emergency fund that exceeds the recommended three to six months of living expenses, and still have cash piling up, it might be time to rethink your strategy.
While it’s great to be financially cautious, over-saving can mean missing out on better returns and long-term growth. Not sure if you’re overdoing it? Here are three key signs that your savings account might be too full — and what you can do to make your money work harder for you.
Building an emergency fund is a smart financial move, but there is such a thing as saving too much. The general rule of thumb is to set aside three to six months’ worth of living expenses. But once you’ve hit that target, continuing to stuff your emergency fund can be a waste.
“Having excess cash beyond an emergency fund can mean missing out on potential returns from investing,” said Fluent in Finance founder, Andrew Lokenauth. “The opportunity cost of playing it too safe with savings can be substantial over decades.”
So, how much is enough? It depends on your lifestyle and income stability. According to Christopher Stroup, a certified financial planner (CFP) with Abacus Wealth Partners, dual income households can typically aim for three months of expenses. On the other hand, single-income earners or those with variable income should aim for six months for added financial security.
Once you have a solid emergency cushion in place, you should consider putting your excess money towards other investments.
If you consistently have money left over after maxing out your IRA, 401(k) and other tax-advantaged retirement accounts each year, it may be time to put that money elsewhere. Saving for the future and your retirement is crucial, but you could be losing purchasing power to inflation over time as your cash earns little interest.
As accredited financial counselor and founder of Retire Certain, Camille Gaines explained, even the most high-yield savings accounts lose value to inflation over time. Instead, try putting that extra money somewhere it can do more for you, like in a money market account.
“Safe money market accounts that do not fluctuate in value can be seen as a good alternative to keeping money in a savings account that pays little interest and has a negative real return after inflation,” said Gaines. “More than two months’ worth of living expenses in a savings account is too much given the ability to earn around 5% from easily accessible money market accounts.”
Money market accounts — not to be confused with money market funds — deliver yields that are typically higher than standard deposit accounts with some checking account features like bill pay and limited monthly check writing. By redirecting your surplus cash into more productive accounts, you can earn more on your money over time.
If your savings account is growing steadily but your debt isn’t shrinking, it’s time to reassess your finances. Holding onto cash while carrying high-interest debt can be counterproductive, especially when that money could be working harder to reduce your liabilities or build long-term wealth.
“With any extra funds, I’d first allocate that toward any debt,” said Bethany Hickey, a personal finance expert with Finder.com. “Then I’d consider some interest-only payments on my home loan, and then add any extra to another savings account if I’m preparing for a near-future large purchase.”
Once your debt is under control, Hickey suggested looking into investment options with higher returns than a traditional savings account, such as certificates of deposit (CDs) or index funds.
“Consider shifting some savings into diversified investments like stocks, bonds and real estate to grow your money over time,” added Lokenauth. “As your investment portfolio builds, you can reduce reliance on cash reserves alone.”
Saving may be important but so is tackling high-interest debt. By paying down debts and reducing the amount taken by interest, you can establish a stronger foundation for your future wealth.
Just remember that while it’s great to watch your savings grow, you can have too much of a good thing. Once your emergency fund is secure and your retirement accounts are maxed out, it’s time to think beyond the savings account.
“There is an opportunity cost to holding onto too much cash,” said Stroup. “Each year those dollars lose purchasing power as a result of inflation. The only way to outpace inflation over your lifetime is to invest excess cash in a diverse mix of stocks, real estate and other assets that generate returns higher than inflation.”
Saving is smart, but strategy matters. Don’t let fear or habit keep your money parked in one place. With a little planning, you can strike the right balance between safety and growth — and make sure your money is working just as hard as you are.
Arsenal have completed the signing of Sweden striker Viktor Gyokeres from Portuguese club Sporting for 73m euros (£63m).
The 27-year-old has signed a five-year deal with the Gunners after the move was held up because of negotiations between the clubs over add-on payments.
The final sum is made up of a 63m euro transfer fee plus 10m euros in add-ons.
The move takes Arsenal’s summer spending up to about £204m, following the arrivals of Martin Zubimendi, Kepa Arrizabalaga, Christian Norgaard, Noni Madueke and Cristhian Mosquera.
A Venezuelan Little League baseball team will miss the Senior Baseball World Series held in South Carolina after it was was denied entry into the U.S. because the players were unable to obtain visas.
Cacique Mara Little League team, from Maracaibo, Venezuela, qualified for the World Series after winning the Latin American championship in Mexico, but will not be able to compete in Easley, S.C. because they were unable to “obtain the appropriate visas” to travel, according to Little League International.
Little League International said in a statement to The Hill that while this is “extremely disappointing, especially to these young athletes,” the tournament committee has decided to advance the second-place team from the Latin American championship, Santa María de Aguayo from Tamaulipas, Mexico.
The league said the replacement will ensure the “Latin America Region is represented in the tournament and that the players, coaches and families from Mexico are able to have a memorable World Series experience.”
A senior State Department official told The Hill on Saturday that U.S. consular officers are currently “working to review the case to confirm proper procedures were followed and necessary appeals were submitted by the visa applicants.”
Venezuela is on President Trump’s list of countries where the entry of their nationals is partially restricted or limited. Six other countries — Burundi, Cuba, Laos, Sierra Leone, Togo and Turkmenistan — are also included.
In early June, Trump also fully restricted the entry of nationals from 12 nations: Afghanistan, Chad, Republic of the Congo, Equatorial Guinea, Eritrea, Haiti, Iran, Libya, Myanmar, Somalia, Sudan and Yemen.
The administration pointed to national security concerns when announcing the travel restrictions.
The Venezuelan baseball team went to Colombia two weeks ago to apply for travel visas, according to The Associated Press (AP).
“It is a mockery on the part of Little League to keep us here in Bogotá with the hope that our children can fulfill their dreams of participating in a world championship,” the baseball team said in a statement, according to the AP. “What do we do with so much injustice, what do we do with the pain that was caused to our children.”
Cathie Wood is one of Wall Street’s most closely followed investment managers. Wood founded Ark Investment Management in 2014 with a focus on disruptive innovation, and has endeared herself to investors with her transparent, social-media-friendly approach to portfolio management.
A longtime crypto bull, Wood recently started a position in Bitmine Immersion Technologies(NYSEMKT: BMNR). Ark’s ETFs purchased 4.4 million shares on July 21. Bitmine chugged 2% higher the following day, but that’s a drop in the bucket compared to the stock’s 435% gain since it debuted on the public markets in June. Is now the time to follow Wood and get in on this stock.
Bitmine’s core business is mining Bitcoin. The company claims that its immersion-cooled mining technology is more cost-effective and environmentally friendly than conventional Bitcoin mining systems. Bitmine also offers mining-as-a-service and Bitcoin treasury consulting.
For its fiscal 2024, which ended Aug. 31, 2024, Bitmine reported $3.3 million in revenue, a 413% year-over-year increase. The lion’s share of its revenue came from mining. While the company reported a net loss of $3.29 million, its net cash used in operating activities was a loss of $28,753 — a dramatic improvement over the $809,715 loss in 2023.
On June 5, Bitmine stock began trading on the New York Stock Exchange with little fanfare, closing at $7.75 per share. Shortly after, the company began buying Bitcoin, following in the footsteps of MicroStrategy (doing business as Strategy) and other companies that have added the cryptocurrency to their balance sheets.
Image source: Getty Images.
Here’s where things take an interesting turn. On June 30, Bitmine said it was pivoting to Ethereum as its primary financial reserve. The company announced a $250 million private placement of common stock to bankroll its first Ethereum purchase, and named market strategist and outspoken crypto bull Tom Lee as chairman of the board. The share price skyrocketed 696% in one trading day.
The stock has been on a roller-coaster ride since then, peaking at $161 a share in early July before settling into a tighter trading range. As of the closing bell on July 24, Bitmine stock was trading at around $42 a share. Meanwhile, Ethereum is up nearly 139% over the past three months.
As of July 17, Bitmine Immersion Technologies held 300,657 Ethereum tokens — 60,000 of which were via in-the-money options — worth more than $1 billion. The company’s publicly stated goal is to acquire and stake 5% of the overall Ethereum supply.
Bitmine has said it pivoted to Ethereum because of its utility as a facilitator of smart contracts, stablecoin payments, and decentralized finance transactions. Stablecoins, in particular, are seeing mainstream adoption by consumers, merchants, and financial services providers, and Lee has called them “the ChatGPT of crypto.”
“Acquiring $1 billion of ETH is a clear signal of our conviction in Ethereum’s long-term value,” Bitmine CEO Jonathan Bates said in a press release.
Bitmine said it plans to use the net proceeds from Wood’s investment to purchase more Ethereum.
Wood isn’t the only high-profile investor to start a position in Bitmine. Earlier this month, tech mogul Peter Thiel disclosed a 9.1% stake in Bitmine through his venture capital funds.
While Bitmine’s core business is Bitcoin mining, stockpiling Ethereum has completely changed its value proposition for investors. You won’t find any pure-play Bitcoin miners in Wood’s flagship Ark Innovation ETF. That’s because Wood considers Bitmine a “digital asset treasury” company.
“These companies could be the next-gen asset managers in the on-chain capital markets age,” Wood asserted in a post on X.
Bitmine reported $1.2 million in revenue for its first quarter of fiscal 2025, which ended on Nov. 30, 2024. That’s a 135% year-over-year increase. The company reported a net loss attributable to common shareholders of $3.9 million, compared to $930,000 in the year-ago quarter. The increase was mainly due to an accounting adjustment related to preferred stock, according to the company.
The price-to-sales (P/S) ratio can be a useful metric when comparing the valuations of companies that aren’t profitable. With a P/S ratio of 16 on a trailing-12-month basis, Bitmine is trading at a premium compared to other crypto miners.
While Bitmine’s top line is growing at an impressive clip, it’s clear to me that investors are piling in because of its massive stockpile of Ethereum, not its underlying fundamentals. Ultimately, this is an unprofitable company that’s selling shares of common stock to buy Ethereum.
With $1 billion in Ethereum on its balance sheet, I would expect Bitmine’s fortunes to be closely tied to the price action in Ethereum — more so than Bitmine’s fundamentals. And that raises the question: As an investor, why not just buy Ethereum directly?
Before you buy stock in Bitmine Immersion Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bitmine Immersion Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $636,628!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,063,471!*
Now, it’s worth noting Stock Advisor’s total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
Josh Cable has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.
Hundreds of people attended the protests against the use of a hotel to house asylum seekers
Hundreds of people gathered to protest outside a hotel housing asylum seekers.
Many arrived at the hotel in the Norwich area with St George’s flags, placards and banners, some reading “Stop the invasion”.
BBC journalist Alex Dunlop estimated there were about 350 to 400 anti-immigration protesters and roughly 150 counter-protesters at the scene.
He said it was largely peaceful but noisy, with a “strong police presence”.
Alex Dunlop/BBC
About 60 police officers were at the scene of the protest
Richard Knights/BBC
About 60 police officers attended while protesters, some standing in the road, listened and cheered a number of speeches delivered from the back of a parked lorry.
Anti-immigration demonstrators were heard chanting “We want our country back” and “Stop the invasion”.
Protesters began gathering before the event started at 14:00 BST.
Speeches ended at about 15:30 and the crowd began to disperse.
Norfolk Police said the event concluded peacefully with no arrests made.
Glen Saffer, one of the organisers, said: “It’s what we wanted – a peaceful demonstration.
“We are here as a community to shut this place down.”
He said he was not against all immigration, and that the protesters were not racist.
“I agree we 100% want legal people in this country. If they wanted to be doctors and nurses, we welcome them in,” he said.
Protester Josh Ampleford, 21, who lives in the area, said the turnout had been “very good” and “impressive.”
Cindy Wilson, who also lives nearby, said she regularly attended protests in London and came “to save our children.”
Pro-immigration counter-protesters approached by the BBC declined to speak.
Richard Knights/BBC
Speakers addressed the crowd from a lorry parked at the scene
Richard Knights/BBC
An estimated 350-400 protesters gathered outside the hotel
A police spokesman said that evidence gatherers were deployed as part of the policing operation and that all footage would be reviewed.
Supt Wes Hornigold said: “We would like to thank the public for their understanding today, particularly during some short periods of disruption whilst groups were exercising their rights to peaceful protest.
“We had a number of officers on duty to ensure the safety of everyone involved and to facilitate the protest.”
Richard Knights/BBC
Police officers stood in front of the protesters, some of whom spilled into the road
On Monday, about 150 protesters gathered outside a hotel in Diss, Norfolk, housing asylum-seeking families in protest against Home Office plans to house single adult males there instead.
Two men were arrested on Saturday morning on suspicion of affray in relation to a protest at the Diss hotel and an earlier one at the hotel in the Norwich area.
Rival groups have also clashed outside The Bell Hotel in Epping, Essex, during several demonstrations since 13 July.
Ten people have been charged with offences in relation to disorder there.
A Home Office spokesperson said: “Since taking office, we have taken immediate action to fix the asylum system and have started closing down hotels and removing more than 35,000 people with no right to be here.
“While the public have a right to protest against the current situation, we will never tolerate unlawful or violent behaviour.
“Working closely with the police, we have thorough and well-tested contingency plans in place to deal with any public disorder, which have been strengthened since last year’s shameful scenes.”
Alex Dunlop/BBC
About 150 counter-protesters attended in support of asylum seekers
Driving is probably the most consistent way Americans get from point A to point B across the country.
And while it’s well known that buying a car is a significant investment, most of us don’t typically factor in the day-to-day or annual costs associated with keeping our cars running and operational. Not to mention the cost of insurance for your vehicle, and for those who live in larger cities, the cost to park your car each and every day.
Adding this all together, the average American pays roughly $12,828 a year to own a car, roughly $1,069 per month, says a new study from Way.
The initial number probably seems eye-popping for sure, but when you break down the various payments on your vehicle, it slowly starts to add up.
The first and largest is the depreciation of your car. While this isn’t physically money that you’re spending, it’s money that you’re losing every time you use your car. As with age and usage, the price of your car will continue to drop until the day you finally sell it or trade it in.
On average, the value of your car drops about $4,600 a year, according to Way.
Next is gas and insurance, which can vary depending on your location, but typically Americans spend about $2,200 on gas every year and $1,700 on car insurance.
After that, there’s the maintenance of your car that you end up doing every year. These include oil changes, tire rotations, brake pad replacements, new air filters, new windshield wipers and anything else that potentially goes wrong with your car in a given year. The prices on this can obviously vary drastically depending on what is going on with your car, but on average, a typical U.S. citizen will spend roughly $1,500 on car maintenance every year.
Going a little more unnoticed is the various financing charges and taxes and fees that you end up paying each year on your car and probably don’t even realize it. Combined, the two can add up to about $1,600 a year.
Finally, there are parking costs, which probably only apply to people who live in larger cities. But on average, the typical American spends around $1,000 on parking. This can vary drastically obviously for someone who lives in the suburbs versus someone who lives in a major city in California or New York.
Separately, all these payments may not seem too crazy, but when combined, it’s a bit more than the normal person may expect to pay on a car year after year.
Nvidia(NASDAQ: NVDA) has been that rare stock that has catapulted investors to millionaire status on its own. But up more than 1,500% over the past five years, and with a $4 trillion market cap, can it really still offer growth for investors?
It can. Here’s why.
Image source: Nvidia.
All signs are that artificial intelligence (AI) will continue to drive innovation over the next few years as more businesses see how it can help them succeed and grow. As there’s greater development in AI, it becomes cheaper and more abundant, and companies that aren’t using it to become more efficient and user-friendly are losing out.
Nvidia is the leader in the graphics processing units (GPU) that power these trends, with an overwhelming amount of market share. The AI market is growing at a fast pace, and the major players, like Amazon and Microsoft, need Nvidia’s powerful chips to drive their efforts. Even companies like Amazon that are creating their own chips to offer more budget-conscious options still partner with Nvidia for their larger clients’ needs.
According to Statista, the AI market is expected to increase at a compound annual growth rate (CAGR) of 26.6% over the next five years. That’s slower than Nvidia’s current revenue growth. If you can imagine Nvidia keeping up such a CAGR for its own sales, keeping its price-to-sales ratio constant, that would lead to its stock price nearly tripling.
Even if the price-to-sales ratio decreases, there could be some serious gains ahead for Nvidia investors over the next five years and beyond.
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $636,628!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,063,471!*
Now, it’s worth noting Stock Advisor’s total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
Mary Sheikh al-Eid’s family arrived at Nasser hospital in Khan Younis after learning she had been killed
The food distribution was announced in advance, like many before it, in a post on social media carrying an illustration of smiling Palestinians receiving boxes of aid.
This time, however, the invitation shared by the Gaza Humanitarian Foundation (GHF) was different, featuring illustrations of only women.
“Tomorrow at our morning distribution at our location in the Saudi district, only women are welcome to come and receive a food box,” the GHF post said. “Men should avoid the site during this distribution.”
Mary Sheikh al-Eid wanted to feed her seven children. Her husband had been killed earlier in the war and the family had been surviving on lentil soup for three weeks, said Mary’s sister Khawla, but the last week had been a struggle.
“Her children and mine told us not to go,” Khawla told the BBC. “Mary told me she wanted to because it was a day for women and the numbers wouldn’t be big.”
GHF
The Gaza Humanitarian Foundation (GHF) announced the women-only aid distribution day on social media
GHF’s food aid distribution system has been marred by near-daily scenes of chaos and killing since it was implemented in May with Israeli and US support.
Huge crowds are forced to walk long distances into Israeli military zones, entering fenced sites that are surrounded by private security contractors and Israeli troops. Palestinian men mostly take on the risk, jostling to secure a box of food for their family.
For Gaza’s two million people, there are just four GHF distribution sites but typically no more than two open on any given day.
On Thursday, the sisters Mary and Khawla set off early for the aid point in the southern Rafah area. By the time they arrived, the scene was already chaos.
“There was a huge crowd of women and the place seemed out of control, they couldn’t offload and distribute the aid,” Khawla said. “They started spraying the women with pepper spray, then they brought stun grenades and started throwing them on the women to force them backwards.”
The sisters got split up in the mayhem. Khawla’s clothes were full of pepper spray and so she called her sister, agreeing to meet at their brother’s house.
Shortly after she called again, feeling something wasn’t right.
“This time a stranger picked up, he told me the owner of the phone was shot and was being taken to the Red Cross [field hospital],” said Khawla.
“I called again and this time I was told she was shot in the head. I ran like crazy and called again, but this time I was told the owner of this phone had been killed.”
Khawla Sheikh al-Eid (R) said her was shot after they had become separated at the aid site
Since the GHF aid system was established in late May, the UN says over 1,000 Palestinians have been killed by the Israeli military while trying to get aid mostly near GHF distribution sites, as well as near UN and other aid convoys.
On Friday, one former US soldier who worked with the GHF said he had witnessed Israeli troops and security contractors firing on crowds.
Anthony Aguilar told the BBC he had never seen such a level of “brutality and use of indiscriminate and unnecessary force against a civilian population, an unarmed, starving population”.
Israel has previously said that its troops have fired “warning shots”, and that it was implementing “lessons learned”. It accuses Hamas of instigating chaos near the aid points and disputes the number of deaths reported.
Mary Sheikh al-Eid’s daughter, Warshazat (R), was comforted at Nasser hospital
Medics at Nasser hospital in Khan Younis said After Mary Sheikh al-Eid died from a bullet injury to the neck. She is one of two women known to have been killed on Thursday’s “women’s day”.
The BBC also spoke to the family of the second woman who was killed, Khadija Abu Anza.
One sister, Samah, who was with her said that they were travelling to a GHF aid site when an Israeli tank and troops arrived.
From a distance of just metres, the troops first fired warning shots as they told them to move back, Samah said on Friday.
“We started walking back and then she was hit by the bullet,” Samah said. “They shot her in the neck and she died immediately.”
“I tried to carry her and her blood fell on me, a man helped me carry her to Nasser hospital. The aid point was opened right after they shot her and they let people go in.”
In response to the BBC, the Israel Defense Forces (IDF) said it had “identified suspects who approached them, posing a threat to the troops” and “fired warning shots” early on Thursday, but added that it was unaware of casualties.
It said the shots were fired ‘hundreds of meters away’ from the distribution site, before its opening hours.
Reuters
Until May, UN agencies, other international organisations and charities provided most of the aid to Gaza’s population at 400 distribution sites throughout the territory.
The introduction of the GHF has been criticised by many in the aid community as an attempt to undermine the previous humanitarian system and increase Israeli control over the distribution of food in Gaza, forcing people into dangerous military locations. The UN refuses to cooperate with the GHF system calling it unethical.
In recent days, Israel’s control over food deliveries to Gaza has been widely condemned by many European governments and the aid groups.
Israel says that it introduced the GHF system because Hamas was previously diverting and profiting from aid under the United Nations-led system, though it hasn’t provided evidence to show this happening on a systematic basis.
The UN says it has recorded the killing of more than 1,000 Palestinians seeking aid since late May
Daily reports of death from malnutrition are gathering pace in Gaza. Humanitarian officials say that the territory must be flooded with aid in order to avert a total collapse.
Under international law, Israel as the military power occupying Gaza has an obligation to protect civilian life – ensuring people can find food to survive. However Israel has blamed Hamas and aid agencies for the current shortages, while continuing to support the GHF distribution model.
“I pray to God they get shut down, they are death traps,” says Mary’s sister Khawla. “She went to get food for her children but she returned by people carrying her body.”
Additional reporting by the BBC’s freelance Gaza team and BBC Verify’s Mohamed Shalaby
Paramount and Skydance announced Friday that, with the Trump administration’s approval, the highly anticipated merger between the entertainment giants is expected to take place next month.
The Aug. 7 date, unveiled in a press release, comes after the Federal Communications Commission (FCC) on Thursday allowed Skydance’s acquisition of Paramount to move forward after the merger was first proposed last year.
FCC Chair Brendan Carr in announcing the decision said he welcomed Skydance’s commitment to remaining “unbiased” in its journalism and willingness to promote “a diversity of viewpoints across the political and ideological spectrum.”
“Americans no longer trust the legacy national news media to report fully, accurately, and fairly,” Carr added. “It is time for a change.”
The move caps off months of turmoil between Paramount Global, the parent company of CBS, and President Trump. Trump sued CBS’s “60 Minutes” last year after he argued an interview it aired with former Vice President Harris was altered in her favor during the 2024 presidential election cycle.
The news outlet has also faced criticism in recent days after CBS made the decision to sunset “The Late Show with Stephen Colbert” next May, after more than 30 years on air. Paramount said the move was based on finances, but critics have argued the settlement and Skydance deal were likely involved — and bribery allegations have been floated.
Comedian Stephen Colbert, who has hosted the show since 2015, has been openly critical of the merger. Colbert blasted the network earlier this week for choosing to axe the show and thanked those who have reached out in support, including Democrats, press freedom advocates and many of his late-night counterparts.
He added that “one key mistake” the network made when moving forward with the plan is that “they left me alive.”
Colbert also lashed out at Trump after the president said in a post online that he “absolutely” loved that the comedian was getting “fired.”
“How dare you, sir,” the host responded. “Would an untalented man be able to compose the following satirical witticism: ‘Go f‑‑‑ yourself.’”
Under the terms of the $8 billion merger, the company will become “New Paramount” and will be led by Trump-ally and billionaire David Ellison, the son of tech tycoon and Oracle founder Larry Ellison.
TOKYO (Reuters) -Japan’s $550 billion investment package agreed in this week’s U.S. tariff deal could help finance a Taiwanese firm building semiconductor plants in the U.S., Japan’s top trade negotiator Ryosei Akazawa said on Saturday.
Japan agreed to the sweeping U.S.-bound investment initiative, which includes equity, loans and guarantees, in exchange for lower tariffs on its exports to the U.S.
However, the structure of the scheme remains unclear.
“Japan, the United States, and like-minded countries are working together to build supply chains in sectors critical to economic security,” Akazawa told public broadcaster NHK.
To that end, he said projects eligible for financing under the package are not limited to U.S. or Japanese firms.
“For example, if a Taiwanese chipmaker builds a plant in the U.S. and uses Japanese components or tailors its products to meet Japanese needs, that’s fine too,” he said, without specifying companies.
The U.S. is significantly reliant on Taiwan’s TSMC (TSMC.BA) for advanced chip manufacturing, raising economic security concerns due to geographic proximity to China.
TSMC announced plans for a $100 billion U.S. investment with President Donald Trump at the White House in March, on top of $65 billion pledged for three plants in the state of Arizona, one of which is up and running.
Japan will use state-owned Japan Bank for International Cooperation (JBIC) and Nippon Export and Investment Insurance (NEXI) for the investments. A recent law revision has enabled JBIC to finance foreign companies deemed critical to Japan’s supply chains.
Akazawa told NHK that equity investment would account for just about 1-2% of the $550 billion, suggesting that the bulk will come in the form of loans and guarantees.
When asked about the White House statement that the U.S. would retain 90% of the profits from the package, he clarified that the figure refers only to returns on equity investment, which would represent a small fraction of the total.
While Japan initially hoped to secure half of the returns, a loss from the concession on the profit-sharing would be marginal compared to the roughly 10 trillion yen ($67.72 billion) in tariff costs that could be avoided under the deal, he said.
He added that Japan aims to deploy the $550 billion investments during Trump’s current term.
($1 = 147.6600 yen)
(Reporting by Makiko Yamazaki; Editing by Andrew Cawthorne)
