Updated June 5, 2024
U.S.-Japan Relations
Overview
Biden and Kishida agreed to launch U.S.-Japan public-
Japan, a U.S. treaty ally since 1951, is an important U.S.
private partnerships in artificial intelligence, quantum
partner in several foreign policy areas, particularly security
computing, and renewable energy. They also announced
and trade. Shared security goals include meeting the
that Japan will build a crewed moon rover for the Artemis
challenge of an increasingly assertive People’s Republic of
space program, and the United States will include Japanese
China (PRC or China) and countering threats from North
astronauts on future crewed lunar missions.
Korea. The U.S.-Japan mutual defense treaty grants the
The U.S.-Japan Military Alliance
United States the right to base U.S. troops—currently
Since the early 2000s, the United States and Japan have
numbering over 50,000—and military assets on Japan’s
improved the operational capability of the alliance despite
territory in return for U.S. security guarantees to Japan.
Japanese political and legal constraints. Japan has
Japan is the sixth-largest U.S. trade partner and the largest
accelerated reforms to make its military (known as the Self-
source of foreign direct investment into the United States,
Defense Forces, or SDF) more capable, flexible, and
and its investors are the largest foreign holders of U.S.
interoperable with U.S. forces. Japan pays roughly $2
Treasury securities. The two countries also collaborate
billion per year to defray the cost of stationing U.S. military
bilaterally and multilaterally on science and technology,
personnel in Japan. In addition, Japan pays compensation to
global health, energy, and climate change. Congressional
localities hosting U.S. troops, rent for the bases, and the
oversight of U.S.-Japan relations generally focuses on
costs of new facilities. About 25% of facilities used by U.S.
alliance cooperation, particularly on how Japan and the
Forces Japan (USFJ) and over half of USFJ personnel are
United States coordinate their China strategies.
stationed in Okinawa, an island chain that comprises less
The Biden Administration positions the U.S.-Japan alliance
than 1% of Japan’s total land area. Most Okinawans and
at the center of its Indo-Pacific strategy. Both the U.S. and
Okinawan politicians oppose elements of the U.S. military
Japanese governments see China’s rising power and
presence in Okinawa and the construction of new U.S.
influence as detrimental to their national security. Japan has
bases in their prefecture.
adopted more assertive security and foreign policy postures
During their 2024 summit, Biden and Kishida said they
since the early 2010s, providing the alliance with more
flexibility to confront regional challenges. Japan’s
intended to upgrade the SDF and USFJ military command
and control systems to enable the two militaries to operate
proximity to China—and the two countries’ maritime and
and plan more closely. In the FY2024 National Defense
territorial disputes—heightens Tokyo’s concern as well as
Authorization Act (P.L. 118-31, §1317), Congress required
its incentives to manage bilateral tensions. Over the past
the Defense Department to report on the department’s plans
decade, Japan has expanded cooperation with India,
for enhancing U.S.-Japan security cooperation.
Australia, and Southeast Asian countries, a policy in tune
with Biden’s vision of a “latticework” of “mutually
Japan Expands Its Defense Posture
reinforcing” regional coalitions. The United States and
Japan is constrained in its ability to use military force by its
Japan participate in the Quadrilateral Security Dialogue
(“the Quad”), which also includes Australia and India.
U.S.-drafted pacifist constitution, as well as Japanese

popular hesitation to engage in military conflict. However,
In April 2024, Japanese Prime Minister Fumio Kishida
as perceived threats from North Korea and China have
addressed a Joint Meeting of Congress, saying “the world
grown more acute, Japan’s government and populace have
needs the United States to continue playing” a “pivotal
reconsidered the country’s approach to national security. In
role” in upholding global democracy, freedom, and
2022, Kishida’s government released security documents
stability. “On the spaceship called ‘Freedom and
that declare Japan’s intention to develop a “counterstrike”
Democracy,’” he continued, “Japan is proud to be your
missile capability to attack enemy missile sites and outline
shipmate ... You are not alone. We are with you.”
plans to double Japan’s security-related expenditures to 2%
of its national gross domestic product (GDP). In 2023,
That same week, President Biden hosted Kishida for an
Japan launched its first program (called Official Security
official visit. The leaders announced several initiatives
Assistance, or OSA) to provide military equipment to
intended to deepen the integration of the U.S. and Japanese
foreign countries. Initial recipients include Bangladesh
militaries. Biden and Kishida said that the AUKUS
(patrol boats), Fiji (patrol vessels), Malaysia (maritime
partnership among Australia, the United Kingdom, and the
vessels), and the Philippines (coastal radar).
United States is “considering cooperation with Japan” on
Regional Relations
advanced military technology projects. The two leaders also
held the first-ever U.S.-Japan-Philippines trilateral summit,
China and Taiwan. A protracted challenge between Japan
with President Ferdinand Marcos Jr., announcing a range of
and the PRC is a dispute between the two countries (as well
cooperative initiatives including increased coast guard
as Taiwan) over a group of uninhabited Japan-administered
cooperation in the South China Sea. On economic matters,
islets in the East China Sea (known as the Senkaku Islands
in Japan, and Diaoyu in China). Since 2020, Tokyo and
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U.S.-Japan Relations
Beijing have largely managed to keep tensions from
governments. Under this backdrop, the Japanese
escalating, despite frequent operations near the islands by
government and corporations have concerns over new
PRC government vessels. Japanese leaders often assert that
mineral-sourcing and localization requirements for electric
they seek to stabilize Japan-PRC relations. As China has
vehicle (EV) tax credits under P.L. 117-169, the Inflation
increased economic, diplomatic, and military coercion of
Reduction Act of 2022 (IRA). In March 2023, the United
Taiwan, a former Japanese colony (1895-1945) roughly 70
States and Japan signed a critical minerals agreement,
miles from Japan’s westernmost island, the Japanese
which qualifies Japan as a free trade agreement (FTA)
government has framed the prospect of cross-Strait conflict
partner for the purpose of meeting mineral-sourcing
as an urgent challenge. Such a conflict could involve U.S.
requirements. Some Members of Congress have criticized
and Japanese military personnel and assets in Japan,
the lack of congressional involvement in the agreement and
especially in Okinawa. China is Japan’s top trading partner,
Japan’s designation as an FTA partner. IRA provisions
accounting in 2023 for 20% of Japan’s total goods trade.
were motivated in part by U.S. policymakers’ concerns over
(The U.S. share was 15%.)
U.S. dependence on China for EV batteries and key EV
components (e.g., processed critical minerals).
Southeast Asia and the Pacific Islands. For decades,
Japan has cultivated friendly relations with Southeast Asian
Figure 1. Top U.S. Trade Partners, 2023
countries, providing aid and earning broadly positive
responses from regional leaders. Japan has launched several
initiatives to build partner countries’ maritime capabilities.
Japan’s approach generally complements U.S. policy; both
the United States and Japan are pursuing strong relations
with the Philippines and Vietnam in particular and have
launched initiatives to cooperate on infrastructure projects
in Southeast Asia and the Pacific Islands.

Source: CRS; data from Bureau of Economic Analysis.
South Korea. In August 2023, Biden hosted Prime
Japan participates in the 14-country, U.S.-led Indo-Pacific
Minister Kishida and South Korean President Yoon Suk-
Economic Framework for Prosperity (IPEF), an economic
yeol at Camp David for the first-ever summit meeting
initiative that includes trade issues, such as digital trade,
between the leaders of the United States, Japan, and South
trade facilitation, labor, and the environment, but not tariff
Korea. The three leaders announced several initiatives for a
“new era of trilateral partnership,” including pl
liberalization or other market access provisions. IPEF also
edges to
addresses issues not typically covered in FTAs, like supply
convene trilateral meetings at high levels (including an
annual leaders’ meeting), expand trilateral military
chain resiliency. As of May 2024, IPEF partners have
concluded several agreements, but trade-specific
exercises, and abide by a “commitment to consult” on
discussions have stalled over key issues like digital trade.
regional conflicts and challenges. The three countries in
Some observers have expressed concerns about the level of
May 2024 announced that they are considering the
U.S. economic engagement in the Indo-Pacific. Some
establishment of a secretariat-like coordinating body.
Members of Congress and partners like Japan have called
Historically, trilateral cooperation has been constrained by
for the United States to join the 11-nation Comprehensive
Japan-South Korea tensions regarding a territorial dispute
and Progressive Agreement for Trans-Pacific Partnership
and sensitive historical issues stemming from Japan’s
(CPTPP), which Japan helped form after U.S. withdrawal
colonization of the Korean Peninsula from 1910 to 1945. In
from the proposed Trans-Pacific Partnership (TPP).
2023, Yoon and Kishida forged a bilateral rapprochement
that has enabled the unprecedented trilateral cooperation.
In December 2023, Japan’s Nippon Steel Corporation, the
Some observers question whether this high level of
world’s 4th-largest steel producer in 2022, announced it had
cooperation will outlast the current leaders and withstand
reached an agreement to acquire the U.S. Steel Corporation,
possible flare-ups in Japan-South Korea relations.
the 27th-largest steel producer. The United Steelworkers
labor union and some Members of Congress have criticized
Russia and Ukraine. Kishida’s government responded to
Russia’s invasion of Ukraine forcefully, viewing Russia’s
the proposed sale and urged the Biden Administration to
review any potential national security implications of the
aggression as a threat to the international rules-based order,
transaction through the interagency Committee on Foreign
and drew potential parallels with PRC claims over Taiwan.
Investment in the United States (CFIUS). Nippon Steel
Japan has adopted most of the sanctions and other penalties
indicated that the deal has been submitted to CFIUS for
against Russia employed by the United States and Europe,
review. In a March 2024 statement, President Biden
and provided humanitarian and material support for
Ukraine despite Russia’s thre
asserted “it is vital for [U.S. Steel] to remain an American
ats to curtail energy supplies.
steel company that is domestically owned and operated.”
Economic and Trade Issues
In 2023, Japan was the sixth-largest U.S. trading partner
Mark E. Manyin, Coordinator, Specialist in Asian Affairs
based on total goods and services trade (Figure 1). Japan is
Caitlin Campbell, Analyst in Asian Affairs
the top source of foreign direct investment in the United
Cathleen D. Cimino-Isaacs, Specialist in International
States. The United States and Japan have two limited trade
Trade and Finance
deals, which took effect in 2020, liberalizing some goods
Kyla H. Kitamura, Analyst in International Trade and
trade and establishing rules on digital trade.
Finance
Cooperation on supply chain resiliency and diversification
has been a key economic priority for the U.S. and Japanese
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U.S.-Japan Relations

IF10199


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https://crsreports.congress.gov | IF10199 · VERSION 38 · UPDATED

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