Updated October 23, 2018
U.S.-Japan Relations
Japan is a significant partner of the United States in a
The U.S.-Japan Military Alliance
number of foreign policy areas, particularly security issues,
Since the early 2000s, the United States and Japan have
which range from hedging against Chinese military
taken significant strides to improve the operational
modernization to countering threats from North Korea. The
capability of the alliance as a combined force, despite
U.S.-Japan military alliance, formed in 1952, grants the
political and legal constraints. Japan continues to pay
U.S. military the right to base U.S. troops—currently
roughly $2 billion per year to defray the cost of stationing
numbering around 50,000—and other military assets on
U.S. military personnel in Japan. In addition, Japan pays
Japanese territory in return for a U.S. pledge to protect
compensation to localities hosting U.S. military troops, rent
Japan’s security. Japan also is the United States’ fourth
for the bases, and the costs of new facilities to support the
largest trading partner and second largest source of foreign
realignment of U.S. troops within Japan as well as for some
direct investment, and Japanese investors are the second
troops outside of Japan.
largest foreign holder of U.S. Treasuries.
Abe has prioritized Japan’s alliance with the United States.
For the first year of the Trump presidency, bilateral
This has included accelerating reforms to make Japan’s
relations remained strong, as least on the surface,
military (known as the Self-Defense Forces, or SDF) more
throughout several visits and leaders’ meetings, cemented
capable, flexible, and interoperable with U.S. forces.
by a common approach to North Korea. Japanese Prime
Japan’s 2014 decision to engage in limited collective self-
Minister Shinzo Abe and President Trump presented a
defense and the 2015 revision of the U.S.-Japan bilateral
united front on dealing with Pyongyang’s nuclear weapon
defense guidelines are both indications of these changes,
test and multiple missile launches and Abe wholeheartedly
but much remains to be implemented to fully realize the
endorsed the Trump Administration’s “maximum pressure”
stated goals of the documents. U.S. and Japan officials say
approach.
the main objectives of the revision were improving bilateral
responses to contingencies in the “grey zone” short of war;
Bilateral tensions have arisen in 2018, however. On North
enhancing cooperation in cyber warfare, military uses of
Korea, Trump has pursued a rapprochement with
space, and ballistic missile defense; and outlining new areas
Pyongyang and held a friendly summit with North Korean
for cooperation beyond the defense of Japan.
leader Kim Jong-un. Many Japanese are unconvinced that
A prominent controversy over the relocation of a U.S.
North Korea will give up its nuclear weapons or missiles
and fear that Tokyo’s interests vis
Marine Corps base in Okinawa has taken a few tentative
-à-vis Pyongyang will be
steps toward resolution, but still faces steep challenges.
marginalized if U.S.-North Korea relations continue to
The issue of relocating the Futenma airbase to a less-
warm. Chief among those issues are the abduction of
congested area of the prefecture has divided Japan’s central
Japanese citizens by North Korean agents in the 1970s and
1980s. Trump’s shift on North Korea and his statements
government and the Okinawan leadership for decades.
Tokyo won a Japanese Supreme Court lawsuit in 2016 that
critical of the value of alliances generally and Japan
restarted construction of the new facility, and in early 2018
specifically have prompted questions among Japanese
a key locality, Nago City, elected a new mayor who is
policymakers about the depth and durability of the U.S.
commitment to Japan’s security.
relatively supportive of the relocation plan. However,
ongoing anti-base protests and the opposition of the
Okinawan governor, who was elected in September 2018,
Trade tensions are also affecting relations. In addition to
suggest political difficulty in implementing the plan. About
imposing tariffs on imports of steel and aluminum products
25% of all facilities used by U.S. Forces Japan (USFJ) and
from Japan and other countries, the Trump Administration
over half of USFJ military personnel are located in
is undertaking an investigation under Section 232 of the
Okinawa, which comprises less than 1% of Japan’s total
Trade Act of 1962 on motor vehicles. If imposed, the move
land area.
could pose a serious threat to the Japanese economy. U.S.
imports of Japanese autos and parts were nearly $56 billion,
Regional Relations
about one-third of total U.S. imports from Japan in 2017. In
Japan’s relations with South Korea have cooled after a brief
September 2018, the United States and Japan announced
rapprochement in 2016. Koreans hold strong grievances
their intent to start new formal bilateral trade negotiations.
about Japan’s colonial rule over the peninsula (1910-1945),
Japan was reluctant to agree to such negotiations, but likely
particularly on the issue of Korean so-called “comfort
saw the talks as a way to avoid the possible increased U.S.
women” who were forced to provide sex to Japanese
motor vehicle tariffs. The Trump Administration informally
soldiers in the World War II era. South Korea is suspicious
agreed to refrain from imposing new auto tariffs on
of Abe, who has been criticized for earlier statements on
Japanese imports while the trade talks are ongoing, as it did
sensitive historical issues. Despite misgivings by South
in a similar arrangement with the European Union.
Korea’s progressive president, Moon Jae-in, Seoul has
upheld a U.S.-supported 2015 agreement on how to resolve
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U.S.-Japan Relations
the comfort women issue, but public mistrust suggests that
look positive, the economy may face some headwinds in
it will remain a diplomatic irritant.
2019, including the government’s scheduled second-phase
increase in the consumption tax in October.
The warming of relations between North and South Korea
since early 2018 presents additional challenges to the
Figure 1. U.S. Trade with Selected Nations (2017)
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
provocations in the past 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 argues that strong pressure against
Pyongyang must be maintained. Tokyo carefully monitors
U.S. initiatives with North Korea, weighing Japan’s need to
secure the U.S. alliance and Japan’s concern with being left
out of any diplomatic initiative with the Korean Peninsula.
Japan-China Relations
Source: U.S. Census Bureau, FT-900, exhibit 20.
Although China-Japan relations have improved since 2016,
Tokyo is existentially concerned about Beijing’s growing
Trade Agreement Negotiations
economic and military power. The two countries are
On October 16, the Administration gave Congress official
engaged in a dispute over Japanese-administered
notification of its intent to begin bilateral trade negotiations
uninhabited islets in the East China Sea known as the
with Japan, allowing negotiations to start under Trade
Senkaku Islands in Japan, Diaoyu in China, and Diaoyutai
Promotion Authority (TPA) procedures after 90 days. The
in Taiwan. China and Taiwan also claim the islets. China
agreement may be negotiated in stages and be less
regularly deploys maritime law enforcement ships near the
comprehensive than a typical U.S. free trade agreement
area, and near-daily encounters between the two countries’
(FTA), though the scope of talks is unclear. If included,
ships occasionally have escalated. Chinese ships and
negotiations on commitments regarding exchange rate
aircraft incursions both increased sharply in 2016 before
policies, agriculture, and autos are likely to be among the
subsiding somewhat in 2017 and early 2018. The United
most contentious. Instead of bilateral talks, Japan had urged
States does not take a position on sovereignty, but
the Trump Administration to return to the regional Trans-
maintains that the U.S.-Japan Security Treaty covers the
Pacific Partnership (TPP) and asserted that it will not open
islets, because U.S. commitments extend to “the territories
its agriculture market in the new talks beyond what was
under the Administration of Japan.”
already agreed to in TPP. After the U.S. withdrawal from
TPP in 2017, Japan took the lead in negotiating revisions to
Economic and Trade Issues
a new modified agreement among the remaining 11
The United States and Japan are the world’s largest and
members. Japan, Australia, Mexico, and Singapore have
third-largest economies, respectively, and are closely
ratified the so-called TPP-11 agreement to date. Japan has
intertwined by trade and foreign investment. In 2017, Japan
also negotiated an FTA with the EU, signed on July 17.
was the fifth-largest U.S. trading partner for goods and
Once they go into effect, both agreements may
services exports ($115 billion) and fourth largest for
disadvantage U.S. exporters in the Japanese market, a major
imports ($171 billion).
concern of some U.S. sectors, such as agriculture.
In an effort to reverse nearly two decades of Japanese
economic stagnation, Abe has promoted a three-pronged
Additional Information
economic program, nicknamed “Abenomics,” that includes
For more, see CRS Report RL33436, Japan-U.S. Relations:
monetary stimulus, fiscal stimulus, and structural economic
Issues for Congress; CRS Report RL33740, The U.S.-Japan
reforms. Progress across the three prongs has been uneven
Alliance; and CRS Report R42645, The U.S. Military
since they were first outlined in 2013. The government’s
Presence in Okinawa and the Futenma Base Controversy.
willingness to use expansionary fiscal policies has been
Emma Chanlett-Avery, Coordinator, Specialist in Asian
constrained by concerns about its public debt, the largest in
the world at almost 240% of GDP.
Affairs
Mark E. Manyin, Specialist in Asian Affairs
Japan’s economy has been building momentum. For the
Brock R. Williams, Specialist in International Trade and
first time in over 20 years, its GDP grew for eight
Finance
consecutive quarters during 2016-2017 with annual GDP
growth in 2017 of 1.7%. The unemployment rate of 2.9% is
IF10199
the lowest level in over two decades. While overall trends
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U.S.-Japan Relations
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