Updated May 14, 2019
U.S.-Japan Relations
Japan is a significant partner of the United States in a
questions among Japanese policymakers about the depth
number of foreign policy areas, particularly security issues,
and durability of the U.S. commitment to Japan’s security.
which range from hedging against Chinese military
modernization to countering threats from North Korea. The
The U.S.-Japan Military Alliance
U.S.-Japan military alliance, formed in 1952, grants the
Since the early 2000s, the United States and Japan have
U.S. military the right to base U.S. troops—currently
taken significant strides to improve the operational
numbering around 50,000—and other military assets on
capability of their alliance as a combined force, despite
Japanese territory in return for a U.S. pledge to protect
political and legal constraints. Many of these changes are
Japan’s security. Japan also is the United States’ fourth
guided by the threat from North Korea and a shared
largest overall trading partner and second largest source of
approach to China’s increased assertiveness in the region.
foreign direct investment, and Japanese investors are the
Japan pays roughly $2 billion per year to defray the cost of
second largest foreign holder of U.S. Treasuries.
stationing U.S. military personnel in Japan. In addition,
For the first year of the Trump presidency, bilateral
Japan pays compensation to localities hosting U.S. troops,
relations remained strong, at least on the surface,
rent for the bases, and the costs of new facilities to support
throughout several visits and leaders’ meetings, cemented
the realignment of U.S. troops. Japan’s current cost-sharing
by common approach to North Korea. Japanese Prime
agreement with the United States, known as the “Special
Minister Shinzo Abe, Japan’s longest-serving post-war
Measures Agreement” or SMA, is due to be re-negotiated
leader, and President Trump presented a united front on
next year. Some analysts predict that the Trump
dealing with Pyongyang’s nuclear weapon test and multiple
Administration will demand significant increases in Japan’s
missile launches. Abe wholeheartedly endorsed the Trump
contribution, and that the SMA negotiations will become
Administration’s “maximum pressure” approach.
entangled with the broader trade talks.
Abe has prioritized Japan’s alliance with the United States,
Bilateral tensions arose in 2018, however. Trade tensions
including accelerating reforms to make Japan’s military
have taken center stage in the relationship. The Trump
(known as the Self-Defense Forces, or SDF) more capable,
Administration has imposed tariffs on imports of steel and
flexible, and interoperable with U.S. forces. Japan’s 2014
aluminum products from Japan and other countries. More
decision to engage in limited collective self-defense—the
significantly, the Administration also is undertaking an
right to defend another country that has been attacked by an
investigation under Section 232 of the Trade Act of 1962 on
aggressor—and the 2015 revision of the U.S.-Japan defense
motor vehicles. If imposed, the move could pose a serious
guidelines are both indications of these changes. U.S. and
threat to the Japanese economy. U.S. imports of Japanese
Japan officials say the main objectives of the guidelines
autos and parts were $56 billion, about one-third of total
revision are improving bilateral responses to contingencies
U.S. imports from Japan in 2018. In April 2019, the United
in the “grey zone” short of war; enhancing cooperation in
States and Japan held their first round of formal bilateral
cyber warfare, military uses of space, and ballistic missile
trade negotiations. Significant uncertainty surrounds the
defense; and outlining new areas for cooperation.
talks as the two sides have yet to agree on their scope and
certain U.S. priorities (e.g., currency provisions and deficit
A longstanding effort to relocate a U.S. Marine Corps base
reduction) could prove contentious. Japan was reluctant to
in Okinawa continues to face steep political challenges.
agree to such negotiations, but likely saw the talks as a way
Relocating the Futenma airbase to a less-congested area of
to avoid the possible increased U.S. motor vehicle tariffs.
the prefecture has divided Japan’s central government and
The Trump Administration informally agreed to refrain
the Okinawan leadership for decades. Tokyo won a
from imposing new auto tariffs on Japanese imports while
Japanese Supreme Court lawsuit in 2016 that restarted
the trade talks are ongoing, as it did in a similar
construction of the new facility. However, the Okinawan
arrangement with the European Union.
governor, who was elected in September 2018 on an anti-
base platform, vows to block the plan. In February 2019, a
On North Korea, since early 2018 Trump has pursued a
non-binding referendum on the relocation revealed that
rapprochement with Pyongyang and held two summits with
72% of voters opposed construction of the new base. About
North Korean leader Kim Jong-un. Many Japanese are
25% of all facilities used by U.S. Forces Japan (USFJ) and
unconvinced that North Korea will give up its nuclear
over half of USFJ personnel are located in Okinawa, which
weapons or missiles and fear that Tokyo’s interests will be
comprises less than 1% of Japan’s total land area.
marginalized if U.S.-North Korea relations improve. Chief
among those issues are North Korea’s abduction of
Regional Relations
Japanese citizens in the 1970s and 1980s. Trump’s shift on
Japan’s relations with South Korea deteriorated sharply in
North Korea and his statements questioning the value of
2018 and early 2019. Koreans hold long-standing
alliances generally and Japan specifically have prompted
grievances about Japan’s colonial rule over the peninsula
(1910-1945), particularly on the issue of Korean so-called
https://crsreports.congress.gov

U.S.-Japan Relations
“comfort women” who were forced to provide sex to
Japan’s economy remains on solid footing, but concerns
Japanese soldiers in the World War II era. South Korea is
over a slowdown are growing. GDP growth was 0.8% in
suspicious of Abe in particular, who has been criticized for
2018, down from 1.7% in 2017. Unemployment is at a two-
earlier statements on sensitive historical issues. A U.S.-
decade low and wages have increased, but deflation
supported 2015 agreement on how to resolve the comfort
remains a concern and few analysts expect the Bank of
women issue has fallen apart. In November 2018, the South
Japan’s aggressive monetary policy to achieve its 2%
Korean Supreme Court ruled that the Japanese company
inflation target. The government’s willingness to use
Mitsubishi should compensate Koreans forced to work in its
expansionary fiscal policies is constrained by concerns
factories during Japan’s occupation of the Peninsula,
about its public debt, the largest in the world at almost
despite the two governments settling this issue in the 1965
240% of GDP. Potential risks to the economy include
normalization treaty. Just a month later, a public spat
spillover effects from the trade dispute between the United
erupted over whether a South Korean naval vessel had
States and China, Japan’s two largest export markets, and a
locked its radar on a Japanese reconnaissance aircraft.
scheduled increase in the consumption tax in October.
The warming of relations between North and South Korea
Figure 1. Top U.S. Trade Partners
since early 2018 presents additional challenges to the
relationship between U.S. allies South Korea and Japan.
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. Some
analysts have criticized the Trump Administration for not
doing more to improve relations between Tokyo and Seoul.
Japan-China Relations
Tokyo is existentially concerned about Beijing’s growing

economic and military power. The two countries are
Source: Bureau of Economic Analysis.
engaged in a dispute over Japanese-administered
uninhabited islets in the East China Sea known as the
Trade Agreement Negotiations
Senkaku Islands in Japan, Diaoyu in China, and Diaoyutai
Bilateral trade negotiations officially began in April 2019,
in Taiwan. The islets are also claimed by China and
but the scope of talks remains unclear. Japan describes the
Taiwan. China regularly deploys maritime law enforcement
negotiations as a trade agreement on goods, while USTR
ships near the area, and encounters between the two
proposed a more ambitious agenda. The Trump
countries’ ships occasionally have escalated. Chinese ships
Administration, however, increasingly may be open to a
and aircraft incursions both increased sharply in 2016
more limited and therefore expedited negotiation, as
before subsiding somewhat in 2017 and 2018. The United
discontent grows from U.S. agriculture exporters facing
States does not take a position on sovereignty, but
price disadvantages in Japan’s market. Two new Japanese
maintains that the U.S.-Japan Security Treaty covers the
FTAs—one among the remaining TPP members, the TPP-
islets, because U.S. commitments extend to “the territories
11, and the other with the EU—entered into force in 2019,
under the Administration of Japan.”
lowering Japan’s high agriculture tariffs for EU and TPP-11
exporters. In addition to the focus on parity in Japan’s
Notwithstanding their territorial dispute and regional
agriculture market, the Trump Administration has
rivalry, relations between Japan and China have improved
prioritized addressing the U.S. bilateral trade deficit, despite
since 2016. Abe’s government reversed its initial opposition
most economists’ argument that macroeconomic factors
to China’s Belt and Road Initiative, agreeing to cooperate
rather than trade agreements determine trade flows.
with Beijing in providing infrastructure development under
certain conditions. Abe visited Beijing in October 2018, the
Additional Information
first leaders’ summit between the two countries since 2011,
For more, see CRS Report RL33436, Japan-U.S. Relations:
and concluded agreements on economic cooperation and
Issues for Congress; CRS Report RL33740, The U.S.-Japan
people-to-people exchanges. Some analysts posit that the
Alliance; CRS Report R42645, The U.S. Military Presence
mutual interest in stabilizing relations may be driven by
in Okinawa and the Futenma Base Controversy; and CRS
both countries’ trade friction with the United States.
In Focus IF11120, U.S.-Japan Trade Agreement
Negotiations, U.S.-Japan Trade Agreement Negotiations.
Economic and Trade Issues
The United States and Japan are the world’s largest and
Emma Chanlett-Avery, Coordinator, Specialist in Asian
third-largest economies, respectively, and are closely
Affairs
intertwined by trade and foreign investment. In 2017, Japan
Mark E. Manyin, Specialist in Asian Affairs
was the fifth-largest U.S. trading partner for goods and
Brock R. Williams, Specialist in International Trade and
services exports ($121 billion) and fourth largest for
Finance
imports ($179 billion).
IF10199
https://crsreports.congress.gov
U.S.-Japan Relations


Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.

https://crsreports.congress.gov | IF10199 · VERSION 11 · UPDATED