Updated March 30, 2022
U.S.-Japan Relations
Overview
degree of vaccine hesitancy, managed to host the postponed
Japan, a U.S. treaty ally since 1951, is a significant partner
2020 Olympics Games in summer 2021, and had vaccinated
of the United States in several foreign policy areas,
80% of its population by March 2022. Japan has
particularly security and trade. Shared security goals range
implemented strict border closures to keep the virus at bay.
from meeting the challenge of an increasingly powerful
China to countering threats from North Korea. The U.S.-
Political Transition in Tokyo
Japan mutual defense treaty grants the United States the
The tightening strategic alignment between the United
right to base U.S. troops—currently numbering around
States and Japan over the past decade was possible because
54,000—and other military assets on Japanese territory in
of the policy choices of Japan’s previous three prime
return for a U.S. pledge to protect Japan’s security. The two
ministers, especially Shinzo Abe, who served as premier
countries collaborate through bilateral and multilateral
from 2012 to 2020. Commentators question whether current
institutions on issues such as science and technology, global
Prime Minister Kishida, who became premier in September
health, energy, and agriculture. Japan is the fourth-largest
2021, will have the determination, longevity, and political
overall U.S. trading partner and largest source of foreign
influence to continue expanding alliance cooperation at the
direct investment into the United States, and its investors
same pace. In October, Kishida led the Liberal Democratic
are the largest foreign holders of U.S. Treasury securities.
Party (LDP) and its small coalition partner to better-than-
expected results in elections for the Lower House of
The Biden Administration has emphasized the importance
Japan’s bicameral legislature (called the Diet), preserving
of restoring U.S. alliances in Asia. Former Japan Prime
their commanding majority. The victory is expected to
Minister Suga was the first in-person visitor to the White
provide Kishida with political momentum at least until
House, signaling the importance of allied cooperation.
Japan’s Upper House elections in July 2022.
Further reinforcing Japan’s central role in the U.S. approach
to the Indo-Pacific, the Biden Administration has boosted
Kishida and the faction he leads within the LDP historically
the Quadrilateral Security Dialogue—or “Quad”—
have been associated with dovish foreign policy positions,
convening the first-ever (virtual) leader-level meeting with
but Kishida took more hawkish stances during his
Japan, Australia, and India.
campaign. Kishida said Japan needs to consider building a
missile strike capability against potential foes and said
Japan and the United States share a fundamental concern
Tokyo and Washington need to run joint simulations of
about China’s role in the Indo-Pacific. Both governments
distrust Beijing’s intentions and see China’s rising power
responses to a Taiwan crisis scenario . After Kishida
became premier, the LDP said in its election platform that it
and influence as detrimental to their national security. This
would seek to significantly increase defense spending,
shared strategic vision was reflected in the joint statement
perhaps eventually doubling it to 2% of GDP.
released following the Biden-Suga meeting, which noted
the “importance of peace and stability across the Taiwan
The U.S.-Japan Military Alliance
Strait” and expressed concern over human rights abuses in
Since the early 2000s, the United States and Japan have
Xinjiang and Hong Kong. Japan’s proximity to China—and
improved the operational capability of the alliance as a
the two countries’ maritime and territorial disputes—
combined force, despite Japanese political and legal
heightens its concern. Some observers question how
constraints. Japan has accelerated reforms to make its
forcefully Japan will stand up to China given Beijing’s
military (known as the Self-Defense Forces, or SDF) more
economic and diplomatic power.
capable, flexible, and interoperable with U.S. forces. In the
New Prime Minister Fumio Kishida has pledged continuity
last few years, however, Japan appears to have been
with his predecessor’s policies supporting the U.S.-Japan
hedging against its reliance on the United States and taking
alliance, including by announcing forceful measures against
tentative steps toward developing more strategic autonomy.
Russia in response to its invasion of Ukraine. Tokyo moved
In summer 2020, Japan suspended its plan to purchase
quickly to ban export of some goods to Russia, restrict
Aegis Ashore ballistic missile defense batteries from the
Russian access to Japan’s financial system, and freeze
United States, and is considering acquiring a so-called
Russian assets, among other moves. This approach
“counterattack” missile strike capability that would allow it
contrasts with Japan’s relatively mild response to the 2014
to hit enemy bases for the first time since 1945. The
Crimean annexation and fundamentally changes Japan’s
capability remains controversial in light of Japan’s pacifist
Russia policy.
constitution; willingness to explore it could indicate a desire
to expand its own defense and rely less on U.S. protection.
COVID-19 Pandemic Response
Japan pays roughly $2 billion per year to defray the cost of
Japan has had moderate success in curbing the Coronavirus
stationing U.S. military personnel in Japan. In addition,
Disease 2019 (COVID-19) pandemic, with under 28,000
Japan pays compensation to localities hosting U.S. troops,
deaths and 6.45 million cases as of March 2022. Despite a
rent for the bases, and the costs of new facilities to support
slow vaccine campaign rollout, Japan overcame some
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U.S.-Japan Relations
the realignment of U.S. troops. The two governments
Japan’s GDP increased in 2021 by 1.7%, after decreasing
announced a new four-year deal in December 2021 that
by 4.5% in 2020, and the government remains focused on
continues Japan’s contribution at about the same level.
pandemic economic recovery with continued fiscal and
monetary support. In November, Kishida’s cabinet
A long-standing effort to relocate a U.S. Marine Corps base
approved a $314 billion supplementary budget for FY2021,
in Okinawa to a less-congested area has divided Japan’s
which ended in March 2022. The FY2022 budget includes a
central government and Okinawan leaders for decades.
reserve fund (~ $40 billion), which the government may tap
About 25% of facilities used by U.S. Forces Japan (USFJ)
in the near term to provide economic relief from rising
and over half of USFJ personnel are in Okinawa, which
commodity prices, including food and energy, related to
comprises less than 1% of Japan’s total land area.
Russia’s invasion of Ukraine. The Bank of Japan, unlike
Okinawans have long expressed widespread opposition to
other central banks, remains committed to loose monetary
new base construction and have chafed at the U.S. military
policy, taking actions to prevent interest rate increases.
presence more broadly. However, recent elections yielded
Japan’s relatively lower interest rates have in turn put
victories for LDP-backed candidates, suggesting Okinawan
downward pressure on the yen, which fell to a near seven-
attitudes about the U.S. military presence may be shifting.
year low against the dollar in late March. Japanese officials
Regional Relations
have historically lauded a weak yen (which makes Japan’s
exports cheaper and imports more expensive), but some
Tokyo is existentially concerned about Beijing’s growing
analysts are raising concerns over its effect on import costs.
economic and military power. A perpetual challenge is a
dispute between the two countries (as well as Taiwan) over
Figure 1. Top U.S. Trade Partners, 2020
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.
Japanese policymakers and media have devoted increasing
Source: Bureau of Economic Analysis.
attention to Taiwan, with current and former leaders
Trade Agreement Negotiations
making heretofore rare remarks linking Taiwan’s security
(and ability to resist Chinese military aggression) to that of
The Trump and Abe Administrations negotiated two limited
Japan. Japan’s approach to supporting Taiwan’s ability to
trade deals liberalizing some agricultural and industrial
defend itself—in peacetime and war—depends on several
goods trade and establishing digital trade rules. Planned
factors, including U.S. actions, legal limitations on Japan’s
second-stage bilateral trade talks remain dormant, despite
ability to engage in military conflict, and public opinion.
urging from some stakeholders to resume negotiation on
issues left out of the initial agreements (e.g., auto trade and
Japan’s relations with South Korea are perennially fraught
services). Some Members have also called for the Biden
due to sensitive historical issues from Japan’s colonization
Administration to consider rejoining the 11-nation
of the Korean Peninsula from 1910 to 1945. A series of
Comprehensive and Progressive Agreement for Trans-
actions and retaliatory countermeasures by both
Pacific Partnership (CPTPP), which Japan helped form after
governments involving trade, security, and history-related
U.S. withdrawal from the proposed TPP in 2017. The
controversies caused bilateral relations to plummet in the
Administration has stated it is not interested in joining
past five years. The Biden Administration has urged both
CPTPP, but has announced plans for an Indo-Pacific
sides to resolve their differences, and changes in leadership
Economic Framework, presumably to include Japan, to
in Tokyo and Seoul may alleviate the tension.
address limited trade issues, such as labor, environment,
and digital trade, but not market access. Japan and the
Economic and Trade Issues
United States also recently launched a cooperative Trade
The United States and Japan, two of the world’s three
Partnership, and negotiated a deal to exempt a certain level
largest economies, are key trade and investment partners. In
of Japanese steel from the Trump-era Section 232 tariffs,
2021, Japan was the fifth-largest U.S. trading partner for
though tariffs on aluminum remain.
exports ($112.2 billion) and imports ($167.8 billion), and
fourth-largest overall trading partner. Several long-term
Emma Chanlett-Avery, Coordinator, Specialist in Asian
challenges (e.g., declining working-age population, low
Affairs
productivity growth, and large government debt load) are
Mark E. Manyin, Specialist in Asian Affairs
perennial economic concerns for Japan and have been a
Brock R. Williams, Specialist in International Trade and
policy focus for successive governments. Prime Minister
Finance
Kishida has also identified as economic priorities supply
Cathleen D. Cimino-Isaacs, Specialist in International
chain security, for which he created a new ministerial
Trade and Finance
economic-security post, broader income redistribution,
Caitlin Campbell, Analyst in Asian Affairs
greater use of digital technologies, and green growth. His
government is maintaining a pledge for a 46% reduction in
IF10199
greenhouse gas emissions by 2030 (from 2013 levels).
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U.S.-Japan Relations
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https://crsreports.congress.gov | IF10199 · VERSION 19 · UPDATED