Key US Ally Pledges New Tax Treaty, $10B Aid Package For Ukraine Amid War With Russia

In a show of solidarity with Ukraine amid the ongoing conflict with Russia, a key U.S. ally in Asia Japan has pledged a new tax treaty and a $10 billion aid package for the war-torn country.

What Happened: Japanese Prime Minister Fumio Kishida hosted his Ukrainian counterpart Denys Shmyhal in Tokyo on Monday to discuss the reconstruction of Ukraine, reported Reuters. Kishida announced a new bilateral tax treaty and the commencement of negotiations for an investment treaty, as Japan continues to stand with Ukraine amid Russia’s invasion.

“Japan has stood with and continues to stand with Ukraine,” said Kishida.

Japan has pledged over $10 billion in financial aid to Ukraine, as it seeks to demonstrate solidarity with Kyiv’s war effort. However, due to restrictions on the export of lethal weapons, Japan cannot provide direct military support.

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Despite the challenges, Japan has shown its support through various means. In December, Japan partially eased its arms export rules, and at a recent meeting, Kishida also pledged support for venture capital companies in Ukraine. The Japanese government agency JETRO will open a new office in Kyiv, and visa controls will be relaxed.

Shmyhal expressed his gratitude for Japan’s support and expressed hope for increased Japanese investment in Ukraine, particularly in the automotive sector. The meeting concluded with a joint communique emphasizing the importance of international support for Ukraine, in preparation for the Ukraine Recovery Conference in Germany in June.

Why It Matters: Japan’s aid and support for Ukraine come at a crucial time as the country continues to face significant challenges in its conflict with Russia. The U.S. Senate recently passed a $95 billion foreign policy package to subsidize Ukraine’s efforts against Russia, with bipartisan support. Ukrainian President Volodymyr Zelenskyy has also been seeking military aid from Germany and France amid the escalating conflict.

At the same time, the European Union has unanimously agreed to a $54 billion aid package for Ukraine, despite opposition from Hungary. The international community’s support for Ukraine is crucial as the conflict enters its third year, and Japan’s aid and investment could further bolster Ukraine’s resilience.

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