Japan Wants the US Close. Just Not Too Close
The US president wasn’t mincing words when it came to ructions in trade policy with Japan.
“From the beginning of our administration we’ve had a key trade policy objective, and that was to break down the barriers to the sales of US goods and services,” he said. “We want agreements that produce permanent improvement in access and in US sales.”
Except that was not Donald Trump speaking, but then-President George HW Bush in 1992, at a rather unlikely venue: The opening of a Toys R Us store in Nara prefecture, during Bush’s last official visit to Japan as leader.
A toy store might seem an inconsequential setting, but it was a hugely significant issue; limited access to Japan’s retail market was a chief grumble of the administration. The episode resurfaced last week as Toys R Us announced it was selling its Japanese operations. Washington’s demands have changed dramatically since then, but Tokyo’s balancing act has not.
That difficulty was on full display in recent weeks as Prime Minister Sanae Takaichi scrambled to speak with Trump both before and after his meeting with Chinese President Xi Jinping. Japan fears nothing more than America losing focus and allowing Beijing to start dictating policy. But too much US attention can also be a bad thing; officials in recent weeks have had to push back against Treasury Secretary Scott Bessent’s increasing public pressure on the country’s fiscal and monetary policy. In other words, Japan wants the US watching its back, but not necessarily looking over its shoulder.
A question I field a lot is how Japan is dealing with the demands of the Trump administration. To which I usually respond with, what’s new? Managing a quixotic partner is something Japan has had to do for decades, and Trump isn’t its first rodeo. In Bush’s era the issue was retail market access, but over the years, there has been pressure to open to US insurers, reform standards for drug and auto approvals, and never-ending calls for more access for US farm imports. Trump’s methods are certainly more heavy-handed, but they are more straightforward than, say, the Obama-era rug-pull of forcing Japan to enact reforms before being allowed to enter the Trans-Pacific Partnership talks, only for the US to promptly abandon the deal.
Japan puts up with this because it needs America. At a time when other US allies are looking to distance themselves from Washington, Tokyo is working to maintain optimal distance. Supporters praised Takaichi for securing two summit-level talks with the president in one week, but the need speaks to the country’s insecurities. Keeping the US and its frequently addled attention span on Asia is the priority.
In Tokyo, some bristled at Trump’s willingness to play along with Xi’s description of the US and China as wartime allies against Japan, a framing that blurs the distinction between today’s Communist Party-led China and the Nationalist government that fought Japan during World War II. Such concerns are overplayed — Trump says a lot of things — but what matters more than interpreting the past is what’s happening in the present. The current chill in relations with China was triggered by Beijing, but Japan has already lost the battle for public opinion over its substance; it must not let the Oval Office be similarly swayed. A recently issued, and widely criticized, report from a US foreign policy think tank calling for Washington to retreat from its commitments in Asia, end alliances with countries including Japan and essentially abandon Taiwan made waves in Tokyo for putting physical form to a nightmare scenario.
But while being ignored is the biggest concern, too much Washington can also be a bad thing. Treasury Secretary Bessent’s support for efforts to prevent further yen weakness was initially welcomed. But his increasingly pointed commentary on the country’s fiscal policy is starting to grate. That was on display when Finance Minister Satsuki Katayama, relaying a message from Takaichi, sought to dispel Bessent’s characterization of the administration as “reflationist.”
Takaichi already has trouble articulating her policies, and the comments only serve to deepen the perception that her government is being fiscally irresponsible — a misreading that has filtered through the markets, helping push up bond yields and making her government’s agenda all the more difficult. Still, Tokyo can’t complain too much — it wanted Bessent involved, just not this involved.
US requests can sometimes be used as a screen for what Japan wants to do anyway, but finds politically tough. Even today, Trump’s demands for Japanese investment in the US are now being used for Tokyo’s own goals of rare earths and energy security by steering investment toward such projects, while his demands to boost defense spending give cover to break decades of taboos. The Bush-era pressure worked to open the market to Toys R Us and other major retailers. The irony is that many of the American chains that subsequently arrived didn’t last, either retreating or selling out to local owners; much of the benefit accrued to local big-box retailers.
Japan can similarly let Washington apply pressure, without allowing it to determine the outcome. With Trump and Bessent both, that’s the skill Takaichi now needs.
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This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Gearoid Reidy is a Bloomberg Opinion columnist covering Japan. He previously led the breaking news team in North Asia, and was the Tokyo deputy bureau chief.
This article was generated from an automated news agency feed without modifications to text.
