Japan is a significant partner of the United States in a number of foreign policy areas, particularly in security concerns, which range from hedging against Chinese military modernization to countering threats from North Korea. The U.S.-Japan military alliance, formed in 1952, grants the U.S. military the right to base U.S. troops—currently around 50,000 strong—and other military assets on Japanese territory, undergirding the “forward deployment” of U.S. troops in East Asia. In return, the United States pledges to protect Japan’s security.
Although candidate Donald Trump made statements critical of Japan during his campaign, relations have remained strong, at least on the surface, throughout several visits and leaders’ meetings. Bilateral tensions have arisen in 2018, however. On North Korea policy, Tokyo has conveyed some anxiety about the Trump Administration’s change from confrontation to engagement, concerned that Japan’s priorities will be marginalized as the United States pursues negotiations with North Korea. More broadly, Japan is worried about the U.S. commitment to its security given Trump’s skepticism about U.S. alliances overseas. Contentious trade issues have also resurfaced as the two governments look to negotiate a bilateral accord. In addition, Japan has expressed disappointment about the Trump Administration’s decision to withdraw from the Trans-Pacific Partnership (TPP) agreement and the United Nations Framework Convention on Climate Change (UNFCCC) Paris Agreement on addressing climate change.
Japan is the United States’ fourth-largest overall trading partner, Japanese firms are the second largest source of foreign direct investment in the United States, and Japanese investors are the second largest foreign holders of U.S. treasuries. Tensions in the trade relationship have increased under the Trump Administration. The U.S.-Japan announcement on September 26, 2018, of their intent to begin formal bilateral trade agreement negotiations has eased concerns over potential U.S. import restrictions on motor vehicle and parts trade, but certain U.S. steel and aluminum imports from Japan remain subject to increased U.S. tariffs. The trade talks could prove challenging given the Trump Administration’s focus on the bilateral U.S. trade deficit, particularly in autos—Japan’s largest export to the United States in 2017. Japan had been hesitant to pursue bilateral negotiations as it remains committed to the TPP.
After years of turmoil, Japanese politics has been relatively stable since the December 2012 election victory of Prime Minister Shinzo Abe and his Liberal Democratic Party (LDP), and further consolidated in the LDP’s subsequent parliamentary gains. With the major opposition parties in disarray, the LDP’s dominance does not appear to be threatened. Abe could become Japan’s longest serving post-war leader if he remains in office throughout this term. However, Abe may struggle to pursue the more controversial initiatives of his agenda, such as increasing the Japanese military’s capabilities and flexibility, because of his reliance on a coalition with a smaller party.
With his political standing secured, Abe continues his diplomatic outreach, possibly hedging against an over-reliance on the U.S alliance. Since 2016, Abe has sought to stabilize relations with China, despite an ongoing territorial dispute and Japanese concerns about China’s increasing assertiveness in its maritime periphery. Relations with South Korea, while stable, remain fraught with sensitive historical issues and differences in how to approach North Korea. Elsewhere, Abe has pursued stronger relations with Australia, India, Russia, and several Southeast Asian nations.
In the past decade, U.S.-Japan defense cooperation has improved and evolved in response to security challenges, such as the North Korean missile threat and the confrontation between Japan and China over disputed islands. Abe accelerated the trend by passing controversial security legislation in 2015. Much of the implementation of the laws, as well as of U.S.-Japan defense guidelines updated the same year, lies ahead, and full realization of the goals to transform alliance coordination could require additional political capital and effort. Additional concerns remain about the implementation of an agreement to relocate the controversial Futenma base on Okinawa, particularly after the September gubernatorial election of a politician opposed to the relocation.
Abe Secures Another Term, Could be Premier Until 2021
Shinzo Abe has been Japan’s prime minister since December 2012, and in 2017 he succeeded in extending the LDP’s term-limit rules for party president from two consecutive three-year terms to three consecutive terms. In September 2018, Abe’s Liberal Democratic Party (LDP) held an internal party leadership vote in which Abe defeated former Defense Minister Shigeru Ishiba, securing a three-year term as party president. With the LDP and its coalition partner, the much smaller Komeito party, firmly in control of Japan’s legislature, Abe’s victory in the LDP leadership contest means that he will continue serving as premier. If Abe remains in power beyond November 2019, he will become the longest-serving prime minister in the history of modern Japan.1
Shortly after his victory, Abe appointed a new Cabinet, retaining the members in charge of foreign affairs and U.S. relations, a likely indication of continuity in Japanese foreign and trade policy. Abe’s new Cabinet includes one woman, down from two, despite Abe’s campaign to increase women’s representation in government and participation in the workforce.
Abe’s next electoral test will come in July 2019, when half the seats of Japan’s Upper House of the bicameral legislature (called the Diet) will be chosen. In a reflection of the disarray of Japan’s opposition parties, the LDP’s approval ratings in most early October 2018 polls were between 40% and 50%, while none of Japan’s other parties received more than 10% support. The September 2018 LDP vote exposed a gap between the LDP’s Diet members, over 80% of whom voted for Abe, and the LDP’s rank-and-file members, over 55% of whom voted for Abe’s opponent, Ishiba.
Cracks Emerge on North Korean Policy
At the outset of the Trump presidency, a shared approach to confronting the North Korean threat appeared to cement the U.S.-Japan relationship. Beginning at their first summit in Mar-a-Lago in February 2017, Abe and Trump presented a united front on dealing with Pyongyang’s nuclear weapon test and multiple missile launches. The two leaders met multiple times and spoke often by phone, and Abe wholeheartedly endorsed the Trump Administration’s “maximum pressure” strategy.
Since the beginning of 2018, Trump has pursued a rapprochement with Pyongyang and held a friendly summit with North Korean leader Kim Jong-un. Many Japanese are unconvinced that North Korea will give up its nuclear weapons or missiles and fear that Tokyo’s interests vis-à-vis Pyongyang will be marginalized if U.S.-North Korea relations continue to warm. Chief among those issues are the abduction of Japanese citizens by North Korean agents in the 1970s and 1980s, an issue on which Abe built his political career. Abe has said he would be willing to meet with Kim to resolve the abduction issue but analysts doubt that Kim has reason to conciliate Abe given his newfound stature in international diplomacy.
Trump’s shift on North Korea—including his decision to suspend U.S.-South Korean military exercises to obtain greater concessions from Pyongyang—and his statements critical of the value of alliances generally and Japan specifically have increased questions among Japanese policymakers about the depth and durability of the U.S. commitment to Japan’s security.
Trade Tensions High as New Bilateral Talks Announced
U.S. trade policy under the Trump Administration has focused partly on reducing U.S. bilateral trade deficits. This has strained U.S. trade relations with Japan, which accounted for $70 billion or 9% of the total U.S. goods trade deficit in 2017, with a deficit in auto trade alone of over $50 billion. As part of its focus on reducing the trade deficit and encouraging domestic manufacturing, among other rationales, the Administration has proclaimed increased tariffs and other import restrictions under rarely used U.S. trade laws.2 In addition to raising concerns over potential economic costs in the United States, these tariff actions have heightened tensions with U.S. trading partners. Japan, given its longstanding close alliance with the United States, has taken particular issue with the steel and aluminum tariffs imposed under Section 232 of the Trade Act of 1962, which are based on an investigation into the potential threat to national security posed by the imports. An ongoing Section 232 investigation on motor vehicles may pose a larger threat to the Japanese economy. U.S. imports of Japanese autos and parts were nearly $56 billion, about one-third of total U.S. imports from Japan in 2017.3
On September 26, 2018, the United States and Japan announced their intent to start new formal bilateral trade negotiations.4 On October 16, the United States Trade Representative (USTR) gave Congress official notification to that effect, allowing negotiations to start under Trade Promotion Authority (TPA) procedures after 90 days.5 Japan was reluctant to agree to such negotiations, but likely saw the talks as a way to avoid the possible increased U.S. motor vehicle tariffs.6 As it did in talks with the EU, the Trump Administration has agreed not to impose new tariffs while bilateral negotiations remain ongoing. The agreement may be negotiated in stages and be less comprehensive than a typical U.S. free trade agreement (FTA), though the scope of talks is unclear. Instead of bilateral talks, Japan had urged the Trump Administration to return to the regional Trans-Pacific Partnership (TPP). After the U.S. withdrawal from TPP in 2017, Japan took the lead in negotiating revisions to the agreement among the remaining 11 members, suspending certain commitments largely sought by the United States. The new deal, called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) or TPP-11, was signed in July 2018 and requires ratification by six participants to take effect.7 Australia, Japan, Mexico, and Singapore have ratified the agreement to date, and Canada’s parliament is in the final stages of ratification.
China and Japan Look to Stabilize Relations
Despite an ongoing territorial dispute in the East China Sea, Japan and China appear to be seeking stability in their bilateral relationship, a trend that has accelerated in the past several months. Abe is scheduled to visit Beijing in late October, the first dedicated leaders’ summit between the two countries since 2011. On the agenda is deepening economic cooperation and increasing people-to-people exchanges. The emphasis on economic issues has emerged as the two sides have sought to manage tensions in the security realm. In May 2018, Tokyo and Beijing established a hotline for senior defense officials to avoid an unintended escalation in the event of a crisis over maritime disputes in the East China Sea. Abe’s government has reversed its initial opposition to China’s Belt and Road Initiative, which calls for building infrastructure projects in various regions around the world, saying that under the proper conditions it will cooperate with Beijing in providing infrastructure development.8 Some analysts posit that the mutual interest in improving relations may be driven by both countries’ trade friction with the United States and more general sense of uncertainty about the durability of U.S. presence in the region. Although deep-seated historical distrust and regional rivalry are likely to endure in the long-run, relations appear to be on the upswing.
Japan’s Uneasy Relations with South Korea
Japan’s relations with South Korea remain precarious despite a rapprochement in 2016. Koreans hold strong grievances about Japan’s colonial rule over the peninsula (1910-1945), particularly on the issue of Korean comfort women who were forced to provide sex to Japanese soldiers in the World War II era. After South Korea’s progressive president, Moon Jae-in, was elected in May 2017, Seoul said it would uphold a U.S.-supported 2015 agreement on how to resolve the comfort women issue, but public mistrust suggests that it will remain a diplomatic irritant. Moon also has continued to participate in a 2016 ROK-Japan military intelligence-sharing agreement, which the United States helped to broker, but trilateral defense cooperation has flagged.
Even when official relations are steady, historical grievances are just beneath the surface and can flare unexpectedly. In early October 2018, the Japanese Maritime Self Defense Force pulled out of an international fleet review in South Korea after the hosts asked Japan to refrain from hoisting its ensign, which is identical to Japan’s pre-World War II imperial “rising sun” flag. In addition, Moon has suggested that his government plans to shut down the foundation established to oversee compensating comfort women after the 2015 agreement was signed, likely in response to public opinion that is critical of the arrangement. Recently, Abe has emphasized publicly that he wants to improve ties with South Korea, possibly reflecting the central role that Seoul has taken in driving international diplomacy with North Korea.
The warming of relations between North and South Korea since early 2018 presents additional challenges to the relationship between the two U.S. allies. The North Korean threat has traditionally driven closer U.S.-Japan-South Korea trilateral coordination, and North Korea’s consistent provocations in the past have provided both the motivation and the political room for South Korea and Japan to expand security cooperation. Japan is wary of Seoul’s outreach to North Korea and Pyongyang’s “smile diplomacy,” however, particularly if it is not accompanied by significant tangible reductions in North Korean nuclear and missile capabilities.
|1.||This calculation includes the time Abe served as prime minister from July 2006 to September 2007. “Abe Shinzō on Track to Become Japan’s Longest-Serving Prime Minister,” Nippon.com, October 3, 2018. Japanese constitutional government began in the late 19th century, with the 1890 enactment of the so-called Meiji Constitution, which was replaced in 1947 by Japan’s present-day Constitution.|
|2.||For more information, see CRS Insight IN10943, Escalating Tariffs: Timeline, coordinated by [author name scrubbed].|
|3.||U.S. Bureau of Economic Analysis (BEA), “U.S. International Trade in Goods and Services—Japan,” 2017.|
|4.||White House, “Joint Statement of the United States and Japan,” September 26, 2018, available at https://www.whitehouse.gov/briefings-statements/joint-statement-united-states-japan/.|
|5.||USTR, “Letter of Intent to Begin U.S.-Japan Negotiations,” October 16, available at https://ustr.gov/sites/default/files/20181017004828790-1.pdf.|
|6.||“Japan Dodges Auto Tariffs, for Now, as Trump and Abe Agree on Trade Talks,” Reuters, September 26, 2018.|
|7.||The full legal text of the CPTPP is available at https://www.mfat.govt.nz/en/trade/free-trade-agreements/free-trade-agreements-concluded-but-not-in-force/cptpp/comprehensive-and-progressive-agreement-for-trans-pacific-partnership-text/.|
|8.||Shutaro Sano, “Japan Buckles Up to Join China’s Belt and Road,” EastAsiaForum.org, March 20, 2018.|