January 14, 2025

Japan Looks Ahead to Trump 2.0

AP/Scanpix
President Donald Trump speaks as he meets with Japanese business leaders, May 25, 2019, in Tokyo.
President Donald Trump speaks as he meets with Japanese business leaders, May 25, 2019, in Tokyo.

Today, on the eve of the presidential inauguration in the US, Japan’s current Prime Minister Shigeru Ishiba faces a new Trump administration, and, in a more volatile regional and global environment, also more challenges in terms of foreign and security policy.

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During the first administration under President Donald Trump (2017-21), former Japanese Prime Minister Shinzō Abe cemented an excellent personal bond with the US president. In addition, Abe launched the “Free and Open Indo-Pacific” (FOIP) concept in order to bring together democracies in a broader-defined Asian region. He also reinvigorated the Quadrilateral Security Dialogue, commonly referred to as “the Quad,” between the US, Japan, India, and Australia. Trump endorsed both of Abe’s initiatives, and their importance has only grown during the Biden administration. In hindsight, Abe solidified the Japan-US alliance, while at the same time increasing alignment with countries in Europe and the global south. Abe will be a hard act to follow for Ishiba, and the second Trump administration will present Japan’s current government with a great deal of foreign policy challenges. However, it may also provide opportunities.

Japan’s Reactions to Trump’s Election

While certainly causing anxiety in Tokyo, Trump’s electoral victory did not come unexpected in Japan. For over a year, the media had been speculating about “Trump 2.0,” with expectations for a republican win shifting from “maybe” to “likely” in the months preceding the election. At the political level, Japan had arguably been preparing for Trump’s possible return, especially in terms of defence policy. Japan’s new defence policy, promulgated under the administration of former Prime Minister Fumio Kishida at the end of 2022, clearly aimed to signal a stronger and more autonomous stance as for defence and security. Tokyo announced that it would boost the defence budget from 1% to 2% of GDP by 2027 and that it would increase deterrence by acquiring counterstrike capabilities. Other central components of the new defence policy included deepened coalition-building through alignment with the European Union, EU member states, NATO, and Southeast Asian nations such as the Philippines. Lastly, it was marked by tightening integration with the US defence industry, and by enhancing defence equipment cooperation with Italy and the UK. These changes were certainly driven by Russia’s war of aggression against Ukraine as well as regional threat perceptions, such as China’s incursions in the East and South China Seas and North Korea’s frequent missile launches. However, they were also a means to cushion against a potentially more antagonistic stance by the US under Donald Trump in case of his re-election.

Japan had arguably been preparing for Trump’s possible return, especially in terms of defence policy

In spite of an awareness of probability and a certain level of preparedness, the US election result caused many speculations about the ramifications for Japan. First, in the economic sphere, anxiety has been high over tariffs on Japanese exports to the US, as Trump has vowed to impose tariffs of 10-20% on all imports including from Japan. Japan is the US’s sixth largest trade partner, and since the first Trump administration, Japanese exports have risen by over 40%.1 Second, in terms of the US-Japan alliance, expectations were that Trump, based on his “America First” policy, might once again apply pressure on Japan, demanding to further its share in carrying the costs of hosting US forces on Japanese soil. Third, there were plenty of concerns in Tokyo over the consequences of a possible US unilateral posture and its effects on global warming, nuclear non-proliferation, and free trade. Fourth, the media raised concerns about regional stability, given that competition with China will likely intensify, not least in view of Trump’s pick of China hardliner Marco Rubio as secretary of state. Trump’s more appeasing stance towards authoritarian regimes, including North Korea and Russia, was seen as another conundrum that can jeopardise regional stability.

Balancing economic interests with efforts to alleviate security concerns remains an important task ahead for Tokyo

What lies ahead?

What are some expected developments lying ahead? First, in terms of domestic politics, Prime Minister Ishiba’s government will need to make difficult choices in order to implement the decision to increase defence spending. It remains to be seen how the government will finance the planned increase in view of Japan’s high national debt, ageing population, opposition to tax increases, depreciating yen, and increasing prices of defence imports from abroad. Agreeing on tax hikes necessary to finance the defence spending surge will be a major task. This challenge will only be exacerbated if Trump asks Japan to spend more than 2% of GDP on defence. Prime Minister Ishiba currently leads a minority government after Japan’s ruling Liberal Democratic Party (LDP) suffered a major setback in the general election of 27 October 2024. Raising defence expenditures further would certainly be a major bone of contention for the main opposition party, the Democratic Party for the People (DPFP).2

Second, when it comes to foreign trade, Trump 2.0 will likely lead to a new emphasis on bilateral relations to the detriment of multilateral trade dealings. As one of few countries, Japan was supportive of the Biden administration’s Indo-Pacific Economic Framework (IPEF), a multilateral economic initiative launched in May 2022 generally seen as a substitute for the Transpacific Partnership (TPP). During his first time in office, Trump abandoned the TPP, a planned mega-FTA. He is unlikely to continue efforts to pursue IPEF, a framework that was marketed as a tool for US regional economic leadership in the 21st century. Furthermore, Japan is the largest source of Foreign Direct Investment (FDI) in the US. Trump’s vow to block Japan’s Nippon Steel’s acquisition of US Steel Corp was pre-empted by incumbent President Joe Biden on 3 January 2025, citing national security concerns. The rejection, perceived by some media in Japan as a great blow to the alliance and “a slap in the face,” possibly harms Japanese investments in the US in the coming years.3 Last, Japan is also in a double bind as for trade with China, not least in view of the rising US-China competition. While security relations are certainly tense, Japan and China are highly interdependent economically. China is still Japan’s largest trading partner in merchandise to the amount of 300 billion USD annually (50% more than with the US), in addition to being a key investment destination and an important source of components and materials. Balancing economic interests with efforts to alleviate (economic as well as geopolitical) security concerns remains an important task ahead for Tokyo in the years to come.

It is unlikely that Trump could singlehandedly change alliance commitments

Third, it is highly likely that relations with the Trump administration will be more volatile and unpredictable. Trump 2.0 will certainly complicate revising the military alliance between Japan and the US to make it a more equal treaty, an explicit ambition of Prime Minister Ishiba. In an opinion piece written for the Hudson Institute in September 2024, Ishiba called for changes in the asymmetrical bilateral treaty by bringing the US-Japan alliance on a par with the US-UK relationship.4 Expanding on the current premises of the US having to defend Japan, and Japan having to provide bases for US forces, he proposed the joint management of US bases in Japan and the presence of Japanese Self-Defense Forces stationed on Guam in the Western Pacific. Donald Trump as well might appeal to an unequal alliance, but rather use it to argue that Japan should pay more for US forces on Japanese territory. Having said that, in view of the fact that many policymakers support US engagement in Asia and that the US population agrees that the security situation in East Asia will affect the national interest of the US, it is unlikely that Trump could singlehandedly change alliance commitments, let alone withdraw from the alliance with Japan. Even so, Prime Minister Ishiba will need to cultivate a solid personal bond with the new US president. It will be hard to follow in the footsteps of former Prime Minister Abe, however.

Japan could and should increase its coalition-building efforts with others

Fourth, during the past two years, relations with South Korea vastly improved, as a result of a new leadership in Seoul and joint challenges, such as North Korean missile launches and concerns over China. Strongly promoted by the US, this thaw in relations culminated in the Camp David agreement in August 2023 on future trilateral defence cooperation. This was followed by joint maritime and aerial drills carried out together with the US and the creation of a trilateral real-time system for sharing data on tracking North Korean missiles. Prime Minister Ishiba himself has argued that security cooperation between the US, Japan, and South Korea was further institutionalised to the point that it approaches a real “trilateral alliance.”5 The sudden yet brief imposition of martial law by President Yoon Suk Yeol on 3 December, and his ensuing impeachment on 14 December, cast a dark shadow over all progress made. The possible return to power of the opposition party, the Democratic Party, could swing the pendulum back to more confrontational relations with Japan, bringing issues such as the comfort women and forced labour during the Japanese rule of Korea (1910-45) back to the fore. For the US too, it could mean a setback in counterbalancing China as well as in implementing a strong pushback against North Korea. Irrespective of who is in power in Seoul, sustaining solid relations between Japan and South Korea in 2025, the year that marks the 60th anniversary of the normalisation of diplomatic relations, is vital for Tokyo in order to tackle joint concerns and cooperate in security issues such as cyber.

Not only challenges but also opportunities?

The numerous challenges for Japan in an unpredictable neighbourhood are thus obvious. But perhaps a second Trump presidency also offers opportunities for Japan in the region. While the US alliance will remain the cornerstone for Japan’s security for the time to come, Japan can continue to beef up its own defence and deterrence, a process that started in earnest under former Prime Minister Abe. This will not only increase Tokyo’s capabilities and autonomy but also (perhaps paradoxically) reinforce Japan’s position in the alliance with the US. Admittedly, this will necessarily need to be a longer-term process, in view of the above-mentioned political and budgetary restrictions.

Furthermore, Japan could and should increase its coalition-building efforts with others. Just before becoming Prime Minister of Japan, Shigeru Ishiba repeated former PM Kishida’s often-quoted catchphrase: “Ukraine today could be Asia tomorrow,” arguing for the need for a collective self-defence system in Asia in order to deter China. The controversial call for an “Asian NATO” was immediately dismissed as unrealistic by media and politicians alike and will certainly not materialise during the next Trump presidency. However, Tokyo can double down on the ongoing process of fostering partnerships and building a growing network of “friendly and like-minded countries” in Southeast Asia, Australasia, and Europe. Japan will likely seek to further align itself with European NATO members, complementing political dialogue with joint military exercises, defence equipment cooperation, capacity building, or defence against hybrid threats, for example.

Finally, Trump’s “America First” policy will come at the detriment of liberal values, progressive norms, or an open economic philosophy. Here, Japan can take the lead in regionally promoting the core principles that are at the heart of its own FOIP policy: the rule of law, freedom of navigation and free trade; economic prosperity including through investments in infrastructure development and connectivity; and regional stability through maritime security, including through maritime law-enforcement capacity-building. In this context, Japan will most certainly pay increasing attention to the interests and views of emerging powers and developing countries in the so-called global south, offering an alternative to China in terms of trade, infrastructure development, and security.


Endnotes

1 Patrick Wintour, “Will Japan’s close ties with US survive the caprice and quirks of Donald Trump?,” The Guardian, 19 December 2024.

2 Rintaro Nishimura, “An opposition party could hold the deciding vote on Japan’s national security policy,” The Interpreter, Lowy Institute, 19 December 2024.

3 Japan Times Editorial Board, “Rejecting the Nippon Steel bid is a slap in the face,” Japan Times, 28 December 2024.

4 Shigeru Ishiba, “Shigeru Ishiba on Japan’s New Security Era: The Future of Japan’s Foreign Policy,” Hudson Institute, 25 September 2024.

5 Ishiba, “Shigeru Ishiba on Japan’s New Security Era”.

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