Personal ties won’t help Japan avoid US tariffs Personal ties won’t help Japan avoid US tariffs
“And I’ll tell you, if we don’t make a deal with Japan, Japan knows it’s a big problem,” said Donald Trump to reporters aboard Air Force One on Friday. Days earlier, in a call to James Freeman, assistant editor of The Wall Street Journal’s editorial page, Trump described his closeness with Japan’s Prime Minister Shinzo Abe but added that “of course that will end as soon as I tell them how much they have to pay.”
Trump’s bickering came as the leaders of both states are going to meet and talk about renegotiating their trade terms later this month. This is a sign of Trump pressuring Japan over the trade deficit issue and threatening to wage a trade war if talks don’t go as expected. Japan is becoming the new target of the trade war after China, this deals a heavy blow to some senior officials in the Abe administration, who believe that Japan can sit on the fence and profit from both sides.
Abe is probably the most anxious state leader who wants to establish a close relationship with Trump. But it turns out that such closeness brings no real benefits to Japan. After WWII, a stable alliance with the US has always been pivotal for the country. Former Japanese prime minister Yasuhiro Nakasone had an amicable relationship with his US counterpart Ronald Reagan, so did Junichiro Koizumi with George W Bush. Nakasone and Koizumi served the fourth and fifth longest tenures after WWII. In contrast, Yukio Hatoyama stepped down after eight months in office, a major reason of which is his failure to manage JapanUS ties well.
Thus, in wake of his predecessors’ experience, Abe is eager to develop a close personal relationship with Trump. Abe knows that Trump won’t easily change his mind on the trade deficit issue, so he is trying his best to lower the odds of a trade war by using his personal equation. Abe seems to have managed to delay Trump’s plan, but it doesn’t mean Japan has gained, at least it couldn’t avoid being a target of new tariffs on steel and aluminum imports.
If Abe had learnt more about postWWII Japan-US ties, he would have realized that leaders of both countries calling each other on a first name basis is not conducive to bridging the trade gap. In 1980s, despite Nakasone’s friendship with Reagan, Japan was still forced to sign the Plaza Accord. It is not clear if the Abe administration will repeat the error.
Considering Trump’s ways of doing things, a trade war between Japan and the US might become unavoidable. Unlike China that can offset the impact through various means such as stimulating internal demand and optimizing the industrial structure, Japan has a limited domestic market.
The Trump government has already put on its radar Japan-made vehicles. According to statistics released by the US Department of Commerce on August 3, the US trade deficit with Japan has increased by 2.9 percent on a yearly basis to nearly $35.3 billion, while US’ imports of Japanese vehicles have grown by 5.7 percent. Constrained by the alliance, Japan might make concessions over the trade deficit issue, but Trump is likely to push harder for more.
Since taking office in 2017, Trump has squabbled and created rifts more than ever with traditional US allies such as the UK, Germany and Canada over trade and national security. In Trump’s governing philosophy, traditional alliances have made way for practical interests. Hailed by the Japanese as “the cornerstone of stability and prosperity in the Asia-Pacific region,” the USJapan alliance is not of vital importance for Trump. Trump won’t be easy on Japan over the trade deficit issue.
Trump might give a cold shoulder to the US-Japan alliance, but Japan, especially Japanese politicians, still have an illusion about its importance. In a poll conducted by NHK this January, when Trump completed his first year in office, 49 percent of the respondents thought the US is a reliable and cooperative ally, while 66 percent believe the US is more important than China. Meanwhile, Japan’s Ministry of Defense, in a recently released white paper, Defense of Japan, played up the so-called China threat again.
As Trump’s trade protectionism grows, Japan’s good old days of being a fence-sitter might be over soon. The Japan-US alliance might not be shaky at this time, but it will prompt more Japanese to reflect on their relationships with the US and China.