U.S.-Japan Relations and the Return of Trump

Trump's Return and Global Implications

The world is watching closely as Donald Trump returns to the U.S. presidency on January 20, and leaders everywhere are rethinking the old question: Should Trump be taken literally, seriously, or both?

There are plenty of issues to worry about. Will Trump implement the extensive tariffs he has promised? Will he really try to acquire Greenland or the Panama Canal? Will he try to strike a deal with China, or maintain the existing export controls? How will U.S. alliances fare under a second Trump administration?

Japan's Leadership Shift and Evolving U.S. Relations

Prime Minister Shinzo Abe had a famously good relationship with Trump, but both Japan and the U.S. are in different places than in 2016. In Japan, Prime Minister Shigeru Ishiba commands a minority government that must work with opposition parties on a case-by-case basis. He has also signaled that he is open to improving relations with China, a sharp divergence from Abe’s foreign policy.

The U.S., meanwhile, is diplomatically engaged in both the war in Ukraine and the conflict in the Middle East. It has withdrawn from Afghanistan, U.S.-China competition has intensified, especially in technology, and the government has executed a massive investment program aimed at revitalizing the nation’s technological manufacturing.

So what should one expect of U.S.-Japan relations over the next four years?

Risks and Opportunities in Bilateral Relations

For Japan, a second Trump administration presents more risks than opportunities. In his first term, Trump made clear that he felt American allies needed to share more of the burdens that come with force projection. Moreover, Trump was particularly focused on U.S. bilateral trade deficits; viewing them as akin to other countries taking advantage of the U.S. For Tokyo, which maintains a high trade surplus with Washington, both of these impulses are worrying.

On the other hand, Japan does not seem to be an immediate priority for the incoming Trump administration. Since the election, Trump himself has directed most of his rhetorical attacks at America’s neighbors, Canada and Mexico. Tech billionaire Elon Musk, who appears to hold outsized influence with the incoming president, has been quarreling with European governments on his social media platform X. Although it is unlikely that Ishiba can replicate the Abe-Trump comradery, bilateral relations could well remain strong for at least the early part of Trump’s administration.

Nonetheless, several potential issues could develop into problems for the relationship.

In both countries, policy toward China could become a sore spot. Officials in Tokyo are reportedly worried that the Trump administration could try to push Japan to implement export controls similar to those in the U.S. to limit trade in sensitive technologies. Some in Washington also speculate that Trump may move in the opposite direction and seek a deal with Beijing that may include loosening the export controls. Such a deal could also alarm Tokyo if it resulted in weakened U.S. deterrence toward China.

On the economic front, tariffs could become more of a problem. Even if the highest of Trump’s tariffs are not directed at Japan, they could still become problems for Japanese companies. Japanese manufacturers, including automakers, have facilities in Mexico, and the products assembled there could be impacted by Trump’s threat of a 25% tariff on goods from that country. Japanese supply chains more broadly could be scrambled by Trump’s economic policies, but the recent rejection of Nippon Steel’s bid to buy U.S. Steel could also make Japanese companies reluctant to invest heavily in the U.S.

Multilateralism vs. America First

In the most general sense, the principles of multilateralism versus Trump’s America-first agenda appear set to come into conflict. A bill is currently working its way through the U.S. Congress that would require the president to sanction certain members of the International Criminal Court (ICC) after that institution issued an arrest warrant for Israeli Prime Minister Benjamin Netanyahu. Japan is the ICC’s largest funder and the current president of the ICC is Tomoko Akane, a former Japanese prosecutor and official in the Ministry of Justice. Although the ICC itself is unlikely to become a major irritant in the U.S.-Japan relationship, it is representative of Japan’s deep commitment to the international system that Trump views with deep skepticism. Similar problems could arise at the United Nations, the World Trade Organization, or any other organization that does not serve America’s interests in Trump’s view. Tokyo will have to respond to such issues on a case-by-case basis.

Conclusion: Stability Amidst Potential Risks

In summary, U.S.-Japan relations look to be relatively stable going into the Trump administration, and they will likely prove more robust than most other U.S. bilateral ties. However, there are looming issues that could spill out into the open without much warning. For companies doing business in both countries, that means greater risk and unpredictability. Increased monitoring of government statements and policy implementation in both the U.S. and Japan will be key to navigating these more challenging circumstances.

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