Updated May 20, 2019
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 their alliance as a combined force, despite
U.S.-Japan military alliance, formed in 1952, grants the
political and legal constraints. Many of these changes are
U.S. military the right to base U.S. troops—currently
guided by the threat from North Korea and a shared
numbering around 50,000—and other military assets on
approach to China’s increased assertiveness in the region.
Japanese territory in return for a U.S. pledge to protect
Japan’s security.
Japan pays roughly $2 billion per year to defray the cost of
Japan also is the United States’ fourth
stationing U.S. military personnel in Japan. In addition,
largest overall trading partner and second largest source of
Japan pays compensation to localities hosting U.S. troops,
foreign direct investment, and Japanese investors are the
rent for the bases, and the costs of new facilities to support
second largest foreign holder of U.S. Treasuries.
the realignment of U.S. troops. Japan’s current cost-sharing
For the first year of the Trump presidency, bilateral
agreement with the United States, known as the “Special
relations remained strong, at least on the surface,
Measures Agreement” or SMA, is due to be re-negotiated
throughout several visits and leaders’ meetings, cemented
next year. Some analysts predict that the Trump
by common approach to North Korea. Japanese Prime
Administration will demand significant increases in Japan’s
Minister Shinzo Abe, Japan’s longest-serving post-war
contribution, and that the SMA negotiations will become
leader, and President Trump presented a united front on
entangled with the broader trade talks.
dealing with Pyongyang’s nuclear weapon test and multiple
Abe has prioritized Japan’s alliance with the United States,
missile launches. Abe wholeheartedly endorsed the Trump
Administration’s “maximum pressure” approach.
including accelerating reforms to make Japan’s military
(known as the Self-Defense Forces, or SDF) more capable,
flexible, and interoperable with U.S. forces. Japan’s 2014
Bilateral tensions arose in 2018, however, especially on
decision to engage in limited collective self-defense—the
trade issues. The Trump Administration has imposed tariffs
right to defend another country that has been attacked by an
on imports of steel and aluminum products from Japan and
aggressor—and the 2015 revision of the U.S.-Japan defense
other countries. More significantly, the Administration is
guidelines are both indications of these changes. U.S. and
considering tariffs or other restrictions on U.S. motor
Japan officials say the main objectives of the guidelines
vehicle imports, including from Japan. An Administration
revision are improving bilateral responses to contingencies
investigation under Section 232 of the Trade Act of 1962
in the “grey zone” short of war; enhancing cooperation in
found that U.S. auto imports threaten U.S. national security.
cyber warfare, military uses of space, and ballistic missile
On May 17, 2019, the President called for negotiations with
defense; and outlining new areas for cooperation.
Japan and the EU to address this threat within 180 days.
Restrictions on bilateral auto trade could pose a serious
A longstanding effort to relocate a U.S. Marine Corps base
threat to the Japanese economy. U.S. imports of Japanese
in Okinawa continues to face steep political challenges.
autos and parts were $56 billion, about one-third of total
Relocating the Futenma airbase to a less-congested area of
U.S. imports from Japan in 2018. Many analysts see the
the prefecture has divided Japan’s central government and
proposed auto tariffs as intended to influence broader
the Okinawan leadership for decades. Tokyo won a
bilateral trade agreement negotiations, which officially
Japanese Supreme Court lawsuit in 2016 that restarted
began in April 2019.
construction of the new facility. However, the Okinawan
governor, who was elected in September 2018 on an anti-
On North Korea, since early 2018 Trump has pursued a
base platform, vows to block the plan. In February 2019, a
rapprochement with Pyongyang and held two summits with
non-binding referendum on the relocation revealed that
North Korean leader Kim Jong-un. Many Japanese are
72% of voters opposed construction of the new base. About
unconvinced that North Korea will give up its nuclear
25% of all facilities used by U.S. Forces Japan (USFJ) and
weapons or missiles and fear that Tokyo’s interests will be
over half of USFJ personnel are located in Okinawa, which
marginalized if U.S.-North Korea relations improve. Chief
comprises less than 1% of Japan’s total land area.
among those issues are North Korea’s abduction of
Japanese citizens in the 1970s and 1980s. Trump’s shift on
Regional Relations
North Korea and his statements questioning the value of
Japan’s relations with South Korea deteriorated sharply in
alliances generally and Japan specifically have prompted
2018 and early 2019. Koreans hold long-standing
questions among Japanese policymakers about the depth
grievances about Japan’s colonial rule over the peninsula
and durability of the U.S. commitment to Japan’s security.
(1910-1945), particularly on the issue of Korean so-called
“comfort women” who were forced to provide sex to
Japanese soldiers in the World War II era. South Korea is
suspicious of Abe in particular, who has been criticized for
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U.S.-Japan Relations
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
supports a more ambitious agenda. The Trump
countries’ ships occasionally have escalated. Chinese ships
Administration is facing pressure from U.S. agriculture
and aircraft incursions both increased sharply in 2016
exporters to reach a quick deal as U.S. exporters now face
before subsiding somewhat in 2017 and 2018. The United
price disadvantages in Japan’s market. Two new Japanese
States does not take a position on sovereignty, but
FTAs—one among the remaining TPP members, the TPP-
maintains that the U.S.-Japan Security Treaty covers the
11, and the other with the EU—entered into force in 2019,
islets, because U.S. commitments extend to “the territories
lowering Japan’s high agriculture tariffs for EU and TPP-11
under the Administration of Japan.”
exporters. In addition to agriculture, the talks are likely to
involve commitments affecting auto trade. The Trump
Notwithstanding their territorial dispute and regional
Administration’s finding that auto imports threaten U.S.
rivalry, relations between Japan and China have improved
national security gives the President authority to impose
since 2016. Abe’s government reversed its initial opposition
unilateral auto import restrictions, creating a contentious
to China’s Belt and Road Initiative, agreeing to cooperate
negotiating environment. The Administration also seeks to
with Beijing in providing infrastructure development under
address the U.S. bilateral trade deficit in the agreement,
certain conditions. Abe visited Beijing in October 2018, the
despite most economists’ argument that macroeconomic
first leaders’ summit between the two countries since 2011,
factors, rather than trade agreements, drive trade balances.
and concluded agreements on economic cooperation and
people-to-people exchanges. Some analysts posit that the
Additional Information
mutual interest in stabilizing relations may be driven by
For more, see CRS Report RL33436, Japan-U.S. Relations:
both countries’ trade friction with the United States.
Issues for Congress; CRS Report RL33740, The U.S.-Japan
Alliance; CRS Report R42645, The U.S. Military Presence
Economic and Trade Issues
in Okinawa and the Futenma Base Controversy; and CRS
The United States and Japan are the world’s largest and
In Focus IF11120, U.S.-Japan Trade Agreement
third-largest economies, respectively, and are closely
Negotiations, U.S.-Japan Trade Agreement Negotiations.
intertwined by trade and foreign investment. In 2017, Japan
was the fifth-largest U.S. trading partner for goods and
Emma Chanlett-Avery, Coordinator, Specialist in Asian
services exports ($121 billion) and fourth largest for
Affairs
imports ($179 billion).
Mark E. Manyin, Specialist in Asian Affairs
Japan’s economy remains on solid footing, but concerns
Brock R. Williams, Specialist in International Trade and
over a slowdown are growing. GDP growth was 0.8% in
Finance
2018, down from 1.7% in 2017. Unemployment is at a two-
IF10199
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U.S.-Japan Relations
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https://crsreports.congress.gov | IF10199 · VERSION 12 · UPDATED