Updated December 3, 2021
U.S.-Japan Relations
Overview
Political Transition in Tokyo
Japan, a U.S. treaty ally since 1951, is a significant partner
The tightening strategic alignment between the United
of the United States in several foreign policy areas,
States and Japan over the past decade was possible because
particularly security and trade. Shared security goals range
of the policy choices of Japan’s previous three prime
from meeting the challenge of an increasingly powerful
ministers, especially Shinzo Abe, who served as premier
China to countering threats from North Korea. The U.S.-
from 2012 to 2020. Commentators question whether current
Japan mutual defense treaty grants the United States the
Prime Minister Fumio Kishida, who became premier in
right to base U.S. troops—currently numbering around
September 2021, will have the determination, longevity,
50,000—and other military assets on Japanese territory in
and political influence to continue expanding alliance
return for a U.S. pledge to protect Japan’s security. The two
cooperation at the same pace. In October, Kishida led the
countries collaborate through bilateral and multilateral
Liberal Democratic Party (LDP) and its small coalition
institutions on issues such as science and technology, global
partner to better-than-expected results in elections for the
health, energy, and agriculture. Japan is the fourth-largest
Lower House of Japan’s bicameral legislature (called the
U.S. trading partner and largest source of foreign direct
Diet), preserving their commanding majority. The victory is
investment into the United States, and its investors are the
expected to provide Kishida with political momentum at
largest foreign holders of U.S. Treasury securities.
least until Japan’s Upper House elections in July 2022.
The Biden Administration has emphasized the importance
Kishida and the faction he leads within the LDP historically
of restoring U.S. alliances in Asia. Former Japan Prime
have been associated with dovish foreign policy positions,
Minister Suga was the first in-person visitor to the White
but Kishida took more hawkish stances during his
House, signaling the importance of allied cooperation.
campaign. Kishida said Japan needs to consider building a
Further reinforcing Japan’s central role in the U.S. approach
missile strike capability against potential foes—a capability
to the Indo-Pacific, the Biden Administration has boosted
Japan currently lacks —and said Tokyo and Washington
the Quadrilateral Security Dialogue—or “Quad”—
need to run joint simulations of responses to a crisis
convening the first-ever (virtual) leader-level meeting with
scenario involving Taiwan. After Kishida became premier,
Japan, Australia, and India in March.
the LDP said in its election platform that it would seek to
Japan and the United States share a fundamental concern
significantly increase defense spending, perhaps eventually
about China’s role in the Indo-Pacific. Both governments
doubling it to 2% of GDP.
distrust Beijing’s intentions and see China’s rising power
The U.S.-Japan Military Alliance
and influence as detrimental to their national security. This
Since the early 2000s, the United States and Japan have
shared strategic vision was reflected in the joint statement
made major strides to improve the operational capability of
released following the Biden-Suga meeting, which noted
the “importance of the peace and stability of the Taiwan
their alliance as a combined force, despite Japanese
Straits” and
political and legal constraints. Japan has accelerated
expressed serious concern over human rights
reforms to make its military (known as the Self-Defense
abuses in Xinjiang and Hong Kong. Japan’s proximity to
China heightens its concern, particularly because of China’s
Forces, or SDF) more capable, flexible, and interoperable
with U.S. forces. In the last few years, however, Japan
expansive maritime claims. Questions remain about how
appears to have been hedging against its reliance on the
forcefully Japan will stand up to China given Beijing’s
United States and taking tentative steps toward developing
economic and diplomatic power.
more strategic autonomy. In summer 2020, Japan
COVID-19 Pandemic Response
suspended its plan to purchase Aegis Ashore ballistic
missile defense batteries from the United States, and has
Japan has had moderate success in curbing the Coronavirus
begun to consider acquiring a so-called “counterattack”
Disease 2019 (COVID-19) pandemic, with under 19,000
strike capability that would allow it to hit enemy bases for
deaths and 1.7 million cases as of December 2021. After a
the first time since 1945. The capability remains
slow vaccine campaign rollout, Japan accelerated its pace
controversial in light of Japan’s pacifist constitution; the
and had vaccinated close to 80% of its population by
willingness to explore it could indicate a desire to expand
December 2021, overcoming some degree of vaccine
its own defense and rely less on U.S. protection.
hesitancy and managing to host the postponed 2020
Olympics Games in summer 2021. By December 2021,
Japan pays roughly $2 billion per year to defray the cost of
cases had dropped to about 150 per day. Japan has
stationing U.S. military personnel in Japan. Japan also pays
implemented strict quarantine requirements on international
compensation to localities hosting U.S. troops, rent for
visitors and imposed emergency measures in much of the
bases, and costs for new facilities to support the U.S. troop
country to attempt to contain the virus.
realignment. The Japan-U.S. 2016-2021 cost-sharing
agreement, or “Special Measures Agreement” (SMA), was
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U.S.-Japan Relations
extended for an additional year after President Biden took
Bank of Japan (BOJ). Other areas of economic-policy focus
office, and negotiations are underway for a new agreement.
include supply-chain security, for which Kishida created a
new ministerial economic-security post, broader income
A long-standing effort to relocate a U.S. Marine Corps base
redistribution, and green growth. As the government
in Okinawa to a less-congested area of the prefecture has
divided Japan’s
develops a new energy strategy, the business community
central government and Okinawan leaders
continues to question whether and how former Prime
for decades. Many Okinawans have long expressed
Minister Suga’s calls for a 46% reduction in greenhouse gas
widespread opposition to new base construction and chafe
emissions by 2030 (from 2013 levels) may be achieved.
at the large U.S. military presence more broadly, reflecting
the tumultuous history and complex relationships with
Japan has deployed considerable fiscal stimulus to cushion
“mainland” Japan and with the United States. About 25% of
the economy from pandemic-related fallout. In November,
all facilities used by U.S. Forces Japan (USFJ) and over
Kishida’s cabinet approved a $314 billion supplementary
half of USFJ personnel are in Okinawa, which comprises
budget for FY2021, which ends in March. The IMF
less than 1% of Japan’s total land area. In the October 2021
estimates Japan’s pandemic stimulus (excluding loans and
parliamentary elections, four LDP party candidates pulled
other guarantees) through fall 2021 was 16.7% of annual
off upset victories over Okinawa’s anti-base party, due in
GDP, compared to U.S. stimulus of 25.5% of GDP. The
part to rising concern among younger Okinawans about
Bank of Japan reports GDP fell in 2020 by 4.8%. Resurgent
China’s rising threat. Upcoming mayoral and gubernatorial
COVID-19 infections, shutdowns, and travel restrictions
elections in 2022 may further test whether Okinawan
continued to depress economic activity in 2021, and the
attitudes about the U.S. military presence are shifting.
Tokyo Olympics had less economic impact than forecast.
Regional Relations
Figure 1. Top U.S. Trade Partners, 2020
Tokyo is existentially concerned about Beijing’s growing
economic and military power. A perpetual challenge is a
dispute between the two countries (as well as Taiwan) over
a group of uninhabited Japan-administered islets in the East
China Sea (known as the Senkaku Islands in Japan, and
Diaoyu in China). Despite these tensions, Tokyo and
Beijing have tried to stabilize relations. Wary of China’s
rising influence, Japan has cultivated warm relations with
several Southeast Asian countries, launched a U.S.-Japan-
Australia regional infrastructure financing initiative, and
championed the Quad to improve defense coordination and
buttress the region’s institutions and norms.
Source: Bureau of Economic Analysis.
Japanese policymakers and media have devoted increasing
attention to Taiwan, with current and former leaders
Trade Agreement Negotiations
making heretofore rare remarks linking Taiwan’s security
The Trump and Abe Administrations negotiated two limited
(and ability to resist Chinese military aggression) to that of
trade deals, which took effect in early 2020 without action
Japan. Japan’s approach to supporting Taiwan’s ability to
by Congress, liberalizing some agricultural and industrial
defend itself—in peacetime and war—depends on several
goods trade and establishing rules on digital trade. The
factors, including U.S. actions, legal limitations on Japan’s
Trump Administration did not pursue a comprehensive
ability to engage in military conflict, and public opinion.
second-stage trade deal, despite urging from many in
Congress to resume negotiation on issues left out of the
Japan’s relations with South Korea are perennially fraught
initial agreements (e.g., auto trade, services, currency). In
due to sensitive historical issues from Japan’s colonization
October, President Biden announced plans for an Indo-
of the Korean Peninsula from 1910 to 1945. A series of
Pacific economic framework, presumably to include Japan.
actions and retaliatory countermeasures by both
Officials stated that it would not take the form of a
governments involving trade, security, and history-related
“traditional trade agreement,” raising questions over the
controversies in 2018 and 2019 caused bilateral relations to
enforceability of the envisioned framework. Some
plummet, eroding U.S.-South Korea-Japan policy
Members have called for a more active Asia trade policy
coordination ever since. The Biden Administration has
from the Biden Administration, including consideration of
urged both sides to resolve their differences.
rejoining the 11-nation Comprehensive and Progressive
Economic and Trade Issues
Agreement for Trans-Pacific Partnership (CPTPP), which
Japan helped form after the Trump Administration
The United States and Japan, two of the world’s three
withdrew U.S. signature from the proposed TPP in 2017.
largest economies, are key trade and investment partners. In
2020, Japan was the fifth-largest U.S. trading partner for
Emma Chanlett-Avery, Coordinator, Specialist in Asian
exports ($101.9 billion) and fourth-largest for imports
Affairs
($151.1 billion). Several long-term challenges (e.g.,
Mark E. Manyin, Specialist in Asian Affairs
declining working-age population, low productivity growth,
Brock R. Williams, Specialist in International Trade and
and large government debt load) are perennial economic
Finance
concerns for Japan. Kishida appears poised to maintain his
Cathleen D. Cimino-Isaacs, Analyst in International Trade
predecessors’ expansionary fiscal economic policies in
conjunction with continued loose monetary policy from the
and Finance
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U.S.-Japan Relations
IF10199
Caitlin Campbell, Analyst in Asian Affairs
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https://crsreports.congress.gov | IF10199 · VERSION 18 · UPDATED