Updated May 15, 2023
U.S.-Japan Relations
Overview
military (known as the Self-Defense Forces, or SDF) more
Japan, a U.S. treaty ally since 1951, is a constructive U.S.
capable, flexible, and interoperable with U.S. forces. Japan
partner in several foreign policy areas, particularly security
pays roughly $2 billion per year to defray the cost of
and trade. Shared security goals include meeting the
stationing U.S. military personnel in Japan. In addition,
challenge of an increasingly powerful China and countering
Japan pays compensation to localities hosting U.S. troops,
threats from North Korea. The U.S.-Japan mutual defense
rent for the bases, and the costs of new facilities to support
treaty grants the United States the right to base U.S.
the realignment of U.S. troops.
troops—currently numbering over 50,000—and other
military assets on Japanese territory in return for a U.S.
Many Okinawans and Okinawan politicians oppose a
pledge to protect Japan. The two countries collaborate
decades-long effort by the U.S. and central Japanese
through bilateral and multilateral institutions on issues such
governments to relocate Marine Corps Air Station Futenma
as science and technology, global health, energy, and
from a crowded city to a less-congested area. About 25% of
climate. Japan is the fourth-largest overall U.S. trading
facilities used by U.S. Forces Japan (USFJ) and over half of
partner and largest source of foreign direct investment into
USFJ personnel are in Okinawa, which comprises less than
the United States, and its investors are the largest foreign
1% of Japan’s total land area. Okinawans have long
holders of U.S. Treasury securities. Congressional interest
expressed widespread opposition to the construction of new
and oversight in U.S. relations with Japan generally focuses
bases in their prefecture.
on alliance cooperation—particularly on how Japan and the
United States coordinate their China strategies—and
Japan Expands Its Defense Posture
trilateral security relations with South Korea.
Japan is constrained in its ability to use military force by its
U.S.-drafted pacifist constitution, as well as Japanese
Within the context of restoring and strengthening U.S.
popular hesitation to engage in military conflict. However,
alliances globally, the Biden Administration positions the
as perceived threats from North Korea and China have
U.S.-Japan alliance at the center of its U.S. Indo-Pacific
grown more acute, Japan’s government and populace have
strategy. Japan has adopted more assertive security and
reconsidered the country’s approach to national security.
foreign policy postures since the early 2010s, allowing
With the Liberal Democratic Party (LDP) and its smaller
more flexibility for the alliance in confronting regional
coalition party Komeito in firm control of the Diet (Japan’s
challenges. Both governments distrust Beijing and see
parliament), Kishida has the potential to loosen some of
China’s rising power and influence as detrimental to their
Japan’s long-held restrictions on its military posture,
national security. Japan’s proximity to China—and the two
particularly if he gains the support of the more dovish
countries’ maritime and territorial disputes—heightens its
Komeito party. Parliamentary elections do not need to be
concern as well as its incentives to manage bilateral
held until 2025.
tensions. President Biden has embraced the Quadrilateral
Security Dialogue (“the Quad”) with Japan, Australia, and
In 2022, Kishida’s government released three security
India as a primary mechanism to advance shared goals in
documents that provide a blueprint that could
the region and has participated in three leader-level Quad
fundamentally reshape Japan’s approach to defending itself
meetings. The Biden Administration also is leading the
and to its security relationship with the United States. The
Indo-Pacific Economic Framework for Prosperity (IPEF), a
documents label China as an “unprecedented strategic
new regional economic and trade initiative with Japan and
challenge,” declare Japan’s intention to develop a
key partners.
“counterstrike” capability to attack enemy missile sites, and
outline plans to increase Japan’s security-related
Prime Minister Fumio Kishida’s government responded to
expenditures to 2% of its national gross domestic product
Russia’s invasion of Ukraine forcefully, viewing Russia’s
(GDP), in line with NATO standards. Post-war Japan
aggression as a threat to the international rules-based order,
generally has limited defense spending to 1% of its GDP. If
and drew potential parallels with China’s claims over
this increase takes effect, Japan’s defense budget will
Taiwan. Japan has adopted most of the sanctions and other
become the world’s third-largest. The documents do not
penalties against Russia employed by the United States and
specify how Japan will implement these goals, or to what
Europe, and provided humanitarian and material support for
extent Japan will pursue them in tandem with the United
Ukraine despite Russia’s threats to curtail energy supplies.
States.
The U.S.-Japan Military Alliance
Japan also has expanded its security cooperation with
Since the early 2000s, the United States and Japan have
Australia, the United Kingdom, the Philippines, and India,
improved the operational capability of the alliance as a
with the encouragement of the U.S. government. Although
combined force, despite Japanese political and legal
not as developed or formalized as the U.S. treaty alliance,
constraints. Japan has accelerated reforms to make its
these burgeoning relationships indicate efforts by Japan to
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U.S.-Japan Relations
diversify its defense partnerships and—potentially—lessen
2019, the U.S. and Japan signed two limited trade deals,
its dependence on the United States for its security.
which took effect in 2020, liberalizing some goods trade
and establishing rules on digital trade.
Regional Relations
Tokyo is existentially concerned about Beijing’s growing
Figure 1. Top U.S. Trade Partners, 2022
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, which have been
fueled in part by frequent operations near the islands by
Chinese government vessels, Tokyo and Beijing have

largely managed to keep tensions from escalating. As China
Source: CRS; data from Bureau of Economic Analysis.
has increased economic, diplomatic, and military coercion
of Taiwan, the Government of Japan has framed the
Japan’s economy has rebounded at a slower pace, relative
prospect of cross-Strait conflict as an urgent challenge.
to other advanced economies, following the COVID-19
Such a conflict could involve the United States, and likely
pandemic. Broadly, Kishida’s economic priorities include
would implicate U.S. and Japanese military personnel and
supporting supply chain security, broader income
assets in Japan, especially in Okinawa. China is Japan’s top
redistribution, greater use of digital technologies, and green
trading partner, accounting in 2022 for 20% of Japan’s total
growth. In their first ever “Economic 2+2” meeting in July
goods trade. (The U.S. share was 14%).
2022, U.S. and Japanese officials emphasized shared
priorities and the need to make their economies more
Japan-South Korea relations are perennially fraught because
competitive and resilient amid global economic risks and
of a territorial dispute and sensitive historical issues
uncertainties. The Japanese government and corporations
stemming from Japan’s colonization of the Korean
also have concerns over new mineral-sourcing and
Peninsula from 1910 to 1945. Relations plummeted in the
localization requirements for electric vehicle (EV) tax
past five years over trade, security, and history-related
credits under P.L. 117-169, commonly referred to as the
issues. South Korean President Yoon Suk-yeol, who took
Inflation Reduction Act of 2022 (IRA). In March 2023, the
office in May 2022, has prioritized improving relations with
United States and Japan signed a critical minerals
Japan to better deal with the shared challenges of North
agreement, which the Administration indicated will qualify
Korea and China. Kishida and Yoon have exchanged
Japan as a “free trade agreement” partner for the purpose of
reciprocal summit visits, the first in over a decade, held
meeting such requirements. IRA provisions were motivated
three trilateral summits with Biden, and restarted and
in part by U.S. policymakers’ concerns over U.S.
expanded bilateral and trilateral security cooperation. The
dependence on China for EV batteries and other key EV
Biden Administration has helped to facilitate this
components such as processed critical minerals.
rapprochement, including by convening dozens of trilateral
meetings at various levels.
In 2022, Japan joined 13 other countries as an inaugural
negotiating partner in the U.S.-led IPEF initiative, an
For decades, Japan has pursued productive relations with
economic arrangement that covers selected trade issues,
Southeast Asian countries, providing generous official
such as digital trade, trade facilitation, labor, and the
development assistance and earning broadly positive
environment, but not tariff liberalization or other market
reviews from regional leaders. Japanese officials frequently
access provisions. IPEF also addresses issues not typically
visit the region and the government has launched several
covered in FTAs, like supply chain resiliency. Following
initiatives that emphasize capacity-building in the security
the third round of negotiations, the United States is to host
sphere. Japan’s approach generally complements U.S.
an IPEF ministerial meeting in late May 2023. IPEF
policy toward Southeast Asian countries, with both the
appears to be the Biden Administration’s response to
United States and Japan pursuing strong relations with
concerns that the United States lacked a robust trade agenda
Vietnam and the Philippines in particular. Japan also has
in the region following U.S. withdrawal from the proposed
developed stronger relations with countries like Cambodia
Trans-Pacific Partnership (TPP) in 2017. Some Members of
and Burma, in contrast to the United States, which has
Congress and partners like Japan have called for the United
imposed sanctions and restrictions on interactions with their
States to consider joining the 11-nation Comprehensive and
authoritarian regimes. Under the Biden and Trump
Progressive Agreement for Trans-Pacific Partnership
Administrations, the United States and Japan have launched
(CPTPP), which Japan helped form after U.S. withdrawal.
a number of initiatives to cooperate on infrastructure
The Administration is pursuing other bilateral economic
projects, including many involving significant public-
engagement with Japan, including a Task Force on the
private partnerships, in Southeast Asia.
Promotion of Human Rights and International Labor
Standards in Supply Chains, established in early 2023.
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. In 2022, Japan was the fifth-largest
Affairs
U.S. trading partner for exports ($120 billion) and imports
Mark E. Manyin, Specialist in Asian Affairs
($188 billion). The United States and Japan do not have a
Cathleen D. Cimino-Isaacs, Specialist in International
comprehensive bilateral free trade agreement (FTA). In
Trade and Finance
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U.S.-Japan Relations

Kyla H. Kitamura, Analyst in International Trade and
Caitlin Campbell, Analyst in Asian Affairs
Finance
IF10199


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https://crsreports.congress.gov | IF10199 · VERSION 24 · UPDATED

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