Updated December 21, 2023
U.S.-Japan Relations
Overview
Kishida’s “courageous leadership in transforming relations
Japan, a U.S. treaty ally since 1951, is a constructive U.S.
between Japan and the ROK,” which have been perennially
partner in several foreign policy areas, particularly security
fraught because of a territorial dispute and sensitive
and trade. Shared security goals include meeting the
historical issues stemming from Japan’s colonization of the
challenge of an increasingly powerful and assertive
Korean Peninsula from 1910 to 1945. Some observers
People’s Republic of China (PRC or China) and countering
question whether this unprecedented arrangement will
threats from North Korea. The U.S.-Japan mutual defense
survive beyond the current leaders, all of whom appear to
treaty grants the United States the right to base U.S.
be personally committed to boosting trilateral ties.
troops—currently numbering over 50,000—and military
assets on Japan’s territory in return for U.S. security
The U.S.-Japan Military Alliance
guarantees to Japan. The two countries collaborate
Since the early 2000s, the United States and Japan have
bilaterally and multilaterally on issues such as science and
improved the operational capability of the alliance as a
technology, global health, energy, and climate change.
combined force, despite Japanese political and legal
Japan is the fourth-largest U.S. trade partner and the largest
constraints. Japan has accelerated reforms to make its
source of foreign direct investment into the United States,
military (known as the Self-Defense Forces, or SDF) more
and its investors are the largest foreign holders of U.S.
capable, flexible, and interoperable with U.S. forces. Japan
Treasury securities. Congressional oversight of U.S.-Japan
pays roughly $2 billion per year to defray the cost of
relations generally focuses on alliance cooperation—
stationing U.S. military personnel in Japan. In addition,
particularly on how Japan and the United States coordinate
Japan pays compensation to localities hosting U.S. troops,
their China strategies—and trilateral security relations with
rent for the bases, and the costs of new facilities. About
South Korea.
25% of facilities used by U.S. Forces Japan (USFJ) and
over half of USFJ personnel are stationed in Okinawa, an
The Biden Administration positions the U.S.-Japan alliance
island chain that comprises less than 1% of Japan’s total
at the center of its Indo-Pacific strategy, and the two
land area. Most Okinawans and Okinawan politicians
countries coordinate and cooperate on regional diplomatic,
oppose elements of the U.S. military presence in Okinawa,
security, and economic initiatives. Japan has adopted more
and Okinawans have long expressed widespread opposition
assertive security and foreign policy postures since the early
to the construction of new U.S. bases in their prefecture.
2010s, providing the alliance with more flexibility to
confront regional challenges. Both the U.S. and Japanese
Japan Expands Its Defense Posture
governments see China’s rising power and influence as
Japan is constrained in its ability to use military force by its
detrimental to their national security. Japan’s proximity to
U.S.-drafted pacifist constitution, as well as Japanese
China—and the two countries’ maritime and territorial
popular hesitation to engage in military conflict. However,
disputes—heightens Tokyo’s concern but also its incentives
as perceived threats from North Korea and China have
to manage bilateral tensions. President Biden has embraced
grown more acute, Japan’s government and populace have
the Quadrilateral Security Dialogue (“the Quad”) with
reconsidered the country’s approach to national security. In
Japan, Australia, and India as a mechanism to advance
2022, Kishida’s government released three security
shared goals in the region. Over the past decade, Japan has
documents that provide a blueprint that could
expanded cooperation with India, Australia, and Southeast
fundamentally reshape the alliance and Japan’s approach to
Asian countries, a policy in tune with Biden’s desire for a
defending itself. The documents label China as an
“latticework” of “mutually reinforcing” regional coalitions.
“unprecedented strategic challenge,” declare Japan’s
Japan participates in the Biden Administration’s Indo-
intention to develop a “counterstrike” missile capability to
Pacific Economic Framework for Prosperity (IPEF), a
attack enemy missile sites, and outline plans to increase
regional economic and trade initiative.
Japan’s security-related expenditures to 2% of its national
gross domestic product (GDP), in line with NATO
U.S.-Japan-South Korea Relations
standards. (Post-war Japan generally has limited defense
In August 2023, Biden hosted Prime Minister Fumio
spending to 1% of its GDP.) If this increase takes effect,
Kishida and South Korean President Yoon Suk-yeol at
Japan’s defense budget could become the world’s third-
Camp David for the first-ever summit meeting between the
largest. The documents do not specify how Japan would
leaders of the United States, Japan, and South Korea. At the
implement these goals, or to what extent Japan would
meeting, the three leaders announced several initiatives for
pursue them in tandem with the United States.
a “new era of trilateral partnership” that included pledges to
convene trilateral meetings at high levels (including an
Japan also has expanded its security cooperation with
annual leaders’ meeting), expand trilateral military
Australia, the United Kingdom, the Philippines, and India
exercises, and abide by a “Commitment to Consult” on
with U.S. encouragement. These burgeoning relationships
regional conflicts and challenges. Biden praised Yoon and
indicate efforts by Japan to diversify its defense
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U.S.-Japan Relations
partnerships and—potentially—lessen dependence on the
vehicle (EV) tax credits under P.L. 117-169, the Inflation
United States for its security.
Reduction Act of 2022 (IRA). In March 2023, the United
States and Japan signed a critical minerals agreement,
Regional Relations
which the Administration indicated will qualify Japan as an
Tokyo is existentially concerned about Beijing’s growing
FTA partner for the purpose of meeting such requirements.
economic and military power. A perpetual challenge is a
Some Members of Congress have criticized the lack of
dispute between the two countries (as well as Taiwan) over
congressional involvement in the agreement and Japan’s
a group of uninhabited Japan-administered islets in the East
designation as an FTA partner. IRA provisions were
China Sea (known as the Senkaku Islands in Japan, and
motivated in part by U.S. policymakers’ concerns over U.S.
Diaoyu in China). Despite these tensions, which since 2012
dependence on China for EV batteries and other key EV
have been fueled in part by frequent operations near the
components such as processed critical minerals.
islands by PRC government vessels, in the 2020s Tokyo
and Beijing have largely managed to keep tensions from
Figure 1. Top U.S. Trade Partners, 2022
escalating. As China has increased economic, diplomatic,
and military coercion of Taiwan, the Government of Japan
has framed the prospect of cross-Strait conflict as an urgent
challenge. Such a conflict could involve the United States
as well as U.S. and Japanese military personnel and assets
in Japan, especially in Okinawa. China is Japan’s top
trading partner, accounting in 2022 for 20% of Japan’s total

goods trade. (The U.S. share was 14%.)
Source: CRS; data from Bureau of Economic Analysis.
For decades, Japan has pursued productive relations with
In 2022, Japan joined 13 other countries as an inaugural
Southeast Asian countries, providing aid and earning
negotiating partner in the U.S.-led IPEF initiative, an
broadly positive reviews from regional leaders. Japanese
economic arrangement that covers selected trade issues,
officials frequently visit the region, and the government has
such as digital trade, trade facilitation, labor, and the
launched several initiatives to build partner countries’
environment, but not tariff liberalization or other market
maritime capabilities. Japan’s approach generally
access provisions. IPEF also addresses issues not typically
complements U.S. policy toward Southeast Asia; both the
covered in FTAs, like supply chain resiliency. As of
United States and Japan are pursuing strong relations with
November 2023, IPEF partners have announced agreements
the Philippines and Vietnam in particular and have
in all pillars except for the trade pillar. IPEF appears to be
launched initiatives to cooperate on infrastructure projects
the Biden Administration’s response to concerns that the
in Southeast Asia and the Pacific Islands.
United States lacked a robust trade agenda in the region
Kishida’s government responded to Russia’s invasion of
following U.S. withdrawal from the proposed Trans-Pacific
Ukraine forcefully, viewing Russia’s aggression as a threat
Partnership (TPP) in 2017. Some Members of Congress and
partners like Japan have called for the United States to
to the international rules-based order, and drew potential
consider joining the 11-nation Comprehensive and
parallels with PRC claims over Taiwan. Japan has adopted
Progressive Agreement for Trans-Pacific Partnership
most of the sanctions and other penalties against Russia
(CPTPP), which Japan helped form after U.S. withdrawal.
employed by the United States and Europe, and provided
The Administration is pursuing other bilateral economic
humanitarian and material support for Ukraine despite
Russia’s threats to curtail energy supplies.
engagement with Japan, including a Task Force on the

Promotion of Human Rights and International Labor
Economic and Trade Issues
Standards in Supply Chains established in early 2023.
The United States and Japan are the world’s largest and
Japan’s Increased Political Uncertainty
third-largest economies. In 2022, Japan was the fifth-largest
Japan’s decade-plus of relative political stability, which has
U.S. trading partner for exports ($120 billion) and imports
provided a foundation for closer U.S.-Japan strategic
($188 billion). The United States and Japan do not have a
alignment, may be ending. In late 2023, Tokyo prosecutors
comprehensive bilateral free trade agreement (FTA). The
opened an investigation into allegations that powerful
United States and Japan have two limited trade deals, which
factions of Kishida’s ruling Liberal Democratic Party
took effect in 2020, liberalizing some goods trade and
(LDP) mis-appropriated campaign finances. The scandal
establishing rules on digital trade.
has shaken the LDP and driven Kishida’s already low
Broadly, Kishida’s economic priorities for Japan include
approval ratings into the 20%-30% range, raising the
possibility he may not last until his three-year term as LDP
supporting supply chain security, broader income
president ends in September 2024. Parliamentary elections
redistribution, greater use of digital technologies, and green
do not need to be held until the summer of 2025.
growth. In the second “Economic 2+2” meeting in
November 2023, U.S. and Japanese officials emphasized
continued coordination on shared priorities and the efforts
Mark E. Manyin, Coordinator, Specialist in Asian Affairs
to make their economies more competitive and resilient
Cathleen D. Cimino-Isaacs, Specialist in International
amid global economic risks and uncertainties. The Japanese
Trade and Finance
government and corporations have concerns over new
Caitlin Campbell, Analyst in Asian Affairs
mineral-sourcing and localization requirements for electric
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U.S.-Japan Relations

IF10199
Kyla H. Kitamura, Analyst in International Trade and
Finance


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https://crsreports.congress.gov | IF10199 · VERSION 34 · UPDATED

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