Updated May 12, 2021
U.S.-Japan Relations
Overview
providing vaccinations for some athletes. Although Japan
Japan, a U.S. treaty ally since 1951, is a significant partner
has had moderate success in curbing the pandemic, with
of the United States in several foreign policy areas,
under 12,000 deaths and 700,000 cases, it experienced a
particularly security and trade. Shared security goals range
fourth wave of cases in May 2021. Emergency measures
from meeting the challenge of an increasingly powerful
were imposed in Tokyo, Osaka, and other urban areas to
China to countering threats from North Korea. The U.S.-
attempt to contain the virus. Japanese public opinion has
Japan mutual defense treaty grants the United States the
largely turned on holding the Games and a national
right to base U.S. troops—currently numbering around
vaccination campaign has sputtered in its initial rollout.
50,000—and other military assets on Japanese territory in
Japan has the largest percentage of people over 65 years old
return for a U.S. pledge to protect Japan’s security. The two
in the world, making its citizens particularly vulnerable.
countries collaborate through bilateral and multilateral
institutions on issues such as science and technology, global
Political Transition in Tokyo
health, energy, and agriculture. Japan is the fourth largest
From 2012 to 2020, Shinzo Abe served as prime minister,
U.S. trading partner and largest source of foreign direct
becoming Japan’s longest-serving premier. Abe dominated
investment into the United States, and its investors are the
Japan’s politics, steering his Liberal Democratic Party
largest foreign holders of U.S. Treasury securities.
(LDP)-led coalition to six successive parliamentary election
victories. Following Abe’s September 2020 resignation, his
The Biden Administration has emphasized the importance
ruling LDP overwhelmingly elected Suga to replace him.
of restoring U.S. alliances in Asia. Japan Prime Minister
Japan’s parliament, the Diet, which is dominated by the
Suga was the first in-person visitor to the White House and
LDP coalition, then elected him to serve as prime minister.
Secretary of State Anthony Blinken and Secretary of
Suga (born in 1948) has pledged to advance Abe’s
Defense Lloyd Austin made their first trip overseas together
initiatives, including revitalizing Japan’s economy and
in March to Tokyo and Seoul to signal the importance of
allied cooperation. In Tokyo they held “2+2” meetings with
supporting the U.S.-Japan alliance. Aside from combating
COVID-19, he has identified his priorities as administrative
their counterparts. Further reinforcing Japan’s central role
and structural reforms such as creating a digitization
in the U.S. approach to the Indo-Pacific, the Biden
agency. Since becoming premier, criticism of his handling
Administration has boosted the Quadrilateral Security
of the pandemic dropped his approval rating numbers below
Dialogue—or “Quad”—initiative, convening the first-ever
40% in several polls, but his ratings rose modestly in the
(virtual) leader-level meeting with Japan, Australia, and
following months. Elections for the Diet’s Lower House,
India in March. The four leaders announced a plan to
which selects the prime minister, must be held by October
jointly expand availability of Coronavirus Disease 2019
2021. If Suga’s poll numbers sag, the LDP may replace him
(COVID-19) vaccines for Southeast Asia and the broader
when his term as party president ends in September.
Indo-Pacific by the end of 2022. They also launched
working groups on climate change and critical technologies.
The U.S.-Japan Military Alliance
Japan and the United States share a fundamental concern
Since the early 2000s, the United States and Japan have
about China’s role in the Indo-Pacific. Both governments
made major strides to improve the operational capability of
distrust Beijing’s intentions and see China’s rising power
their alliance as a combined force, despite Japanese
and influence as detrimental to their national security. This
political and legal constraints. Japan has accelerated
shared strategic vision was reflected in the joint statement
reforms to make its military (known as the Self-Defense
released following the Biden-Suga meeting, which noted
Forces, or SDF) more capable, flexible, and interoperable
the “importance of the peace and stability of the Taiwan
with U.S. forces. In the last few years, however, Japan
Straits” and serious concern over human rights abuses in
appears to have been hedging against its reliance on the
Xinjiang and Hong Kong. Japan’s proximity to China
United States and taking tentative steps toward developing
heightens its concern, particularly because of China’s
more strategic autonomy. In summer 2020, Japan
expansive maritime claims. Questions remain, however,
suspended its plan to purchase Aegis Ashore ballistic
about how forcefully Japan will stand up to China given
missile defense batteries from the United States, and has
Beijing’s economic and diplomatic power.
begun to consider acquiring a so-called “counterattack”
strike capability that would allow it to hit enemy bases for
The COVID Pandemic and the Olympics
the first time since 1945. The capability remains
The 2020 Tokyo Olympic Games were postponed as the
controversial in light of Japan’s pacifist constitution, but the
pandemic accelerated, a significant disappointment and
willingness to explore it could indicate a desire to expand
major economic hit for Japan. The Games are scheduled to
its own defense and rely less on U.S. protection.
begin in July 2021 and organizers have introduced
Japan pays roughly $2 billion per year to defray the cost of
mitigating measures to try to avoid an outbreak by banning
stationing U.S. military personnel in Japan. In addition,
international fans, isolating national delegations, and
Japan pays compensation to localities hosting U.S. troops,
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U.S.-Japan Relations
rent for the bases, and the costs of new facilities to support
economic concerns for Japan. Suga has maintained his
the realignment of U.S. troops. Japan’s 2016-2021 cost-
predecessor’s expansionary fiscal economic policies in
sharing agreement with the United States, known as the
conjunction with continued loose monetary policy from the
“Special Measures Agreement” or SMA, was extended for
Bank of Japan (BOJ). Suga also announced new reform
an additional year after Biden took office, and negotiations
priorities focused on digitalization and green growth, but
are underway for a new agreement.
some in the business community question the economic
feasibility of his 46% reduction target for greenhouse gas
A long-standing effort to relocate a U.S. Marine Corps base
emissions by 2030 (from 2013 levels).
in Okinawa continues to face challenges. Relocating the
Futenma airbase to a less-congested area of the prefecture
The FY2021 budget signals Japan’s continued focus on
has divided Japan’s central government and the Okinawan
reinvigorating the economy from the pandemic and global
leadership for decades. Okinawan governor Denny Tamaki
recession. Its $45 billion in pandemic-related emergency
has vowed to block the plan even as construction efforts
spending follows three supplementary budgets in FY2020,
continue at the new site. A 2019 nonbinding referendum
with roughly $3 trillion of total stimulus (over 60% of
showed that 72% of Okinawan voters opposed the new
GDP). Even with the stimulus, the BOJ reports that GDP
base. About 25% of all facilities used by U.S. Forces Japan
fell in 2020 by 4.8%. Resurgent infections and shutdowns
(USFJ) and over half of USFJ personnel are in Okinawa,
in the Tokyo area in early 2021 highlight the fragility of the
which comprises less than 1% of Japan’s total land area.
economic outlook. Japan’s exports are a recent bright spot,
but tourism remains heavily depressed, and concerns over
Regional Relations
spillover effects from U.S.-China trade tensions persist.
Tokyo is existentially concerned about Beijing’s growing
Figure 1. Top U.S. Trade Partners, 2020
economic and military power. A perpetual challenge is a
dispute between the two countries (as well as Taiwan) over
a group of uninhabited Japanese-administered islets in the
East China Sea (known as the Senkaku Islands in Japan,
and Diaoyu in China). Despite these tensions, Tokyo has
tried to stabilize relations with Beijing and had planned to
host Chinese President Xi Jinping for an official visit in
2020, but the visit was cancelled due to the pandemic. Wary
of China’s rising influence, Japan has deepened ties with
other countries in the region. Japan has cultivated warm
relations with several Southeast Asian countries, launched a

U.S.-Japan-Australia regional infrastructure financing
Source: Bureau of Economic Analysis.
initiative, and championed the Quad with the United States,
India, and Australia to improve defense coordination.
Trade Agreement Negotiations
The Trump and Abe Administrations negotiated two limited
Japan’s relations with South Korea are perennially fraught
trade deals, which took effect in early 2020 without action
due to sensitive historical issues from Japan’s colonization
by Congress, liberalizing some agricultural and industrial
of the Korean Peninsula from 1910 to 1945. Since 2018,
goods trade and establishing rules on digital trade. By
these relations marked their lowest levels in decades. A
expanding market access for U.S. agricultural exports to
series of actions and retaliatory countermeasures by both
Japan and eliminating the threat of proposed new U.S.
governments involving trade, security, and history-related
tariffs on Japan’s autos, the deals addressed key concerns in
controversies in 2018 and 2019 caused bilateral relations to
both countries and received broad stakeholder support. The
plummet, eroding U.S.-South Korea-Japan policy
Trump Administration did not pursue a comprehensive
coordination. The Biden Administration has urged both
second-stage trade deal, despite urging from many in
sides to resolve their differences.
Congress. President Biden’s near-term focus on domestic
President Trump’s 2018-2020 attempt at diplomacy with
economic policies suggests it may be some time before the
North Korea unnerved Tokyo, as many Japanese are
two countries potentially address significant issues left out
unconvinced that North Korea will give up its nuclear
of the initial agreements (e.g., auto trade, services,
weapons or missiles. Given Japan’s proximity to North
currency). Some Members have called for an Asia trade
Korea, Japanese observers worry Pyongyang could target
strategy from the Biden Administration, including
their homeland. Japanese officials also prioritize accounting
consideration of rejoining the 11-nation Comprehensive and
for North Korea’s abduction of Japanese citizens in the
Progressive Agreement for Trans-Pacific Partnership
1970s and 1980s, and hope the Biden Administration will
(CPTPP), which Japan helped form after the Trump
include the issue in future negotiations with Pyongyang.
Administration withdrew from the TPP in 2017.
Economic and Trade Issues
Emma Chanlett-Avery, Coordinator, Specialist in Asian
The United States and Japan, two of the world’s three
Affairs
largest economies, are key trade and investment partners. In
Mark E. Manyin, Specialist in Asian Affairs
2020, Japan was the fifth-largest U.S. trading partner for
Brock R. Williams, Specialist in International Trade and
exports ($102.4 billion) and fourth-largest for imports
Finance
($150.8 billion). Several long-term challenges (e.g.,
Cathleen D. Cimino-Isaacs, Analyst in International Trade
declining working-age population, low productivity growth,
and Finance
low inflation, and large government debt load) are perennial
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U.S.-Japan Relations

IF10199


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https://crsreports.congress.gov | IF10199 · VERSION 17 · UPDATED

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