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Why Japan Should Get Ready for 'Trump Shocks'
Image Credit: Flickr/ Gage Skidmore

Why Japan Should Get Ready for 'Trump Shocks'

 
 

In 1971, President Richard Nixon undertook several actions that would later be known in Japan as the “Nixon Shocks.” The first shock came when the U.S. president suspended the convertibility of the dollar into gold, thus setting the conditions for a floating exchange rate system. The erosion of the Bretton Woods System forced other countries, such as Japan to take drastic actions to prevent their currencies from appreciating excessively against the dollar. The following year, Nixon unleashed another shock when he suddenly opened relations with mainland China. Japan was again caught off guard as its closest ally did not provide any advance warning. The credibility of the alliance was tested. The third shock came when, with little consultation, Nixon suddenly levied tariffs on textile imports, imposing large economic adjustments on Japan.

These three Nixon shocks demonstrated that when U.S. policy becomes unpredictable, the negative consequences for America’s closest allies can be significant. In the case of Japan, the three Nixon shocks forced Prime Minister Eisaku Sato, current Prime Minister Abe Shinzo Abe’s great-uncle, from office.

Weeks before his inauguration, Trump had already taken several unexpected actions that one cannot help but call “Trump Shocks.” However, the Trump Shocks may prove more destabilizing than the Nixon Shocks that rearranged the post-WWII world order. Nixon’s actions were surprising because they had a significant impact, but were shocking mostly due to how suddenly they came. Although Nixon cultivated a “mad-man” brinksmanship image during international crises, he was ultimately rational and therefore somewhat predictable. Trump, on the other hand, has been more extreme in cultivating an image of unpredictability — so much so that allies and rivals alike are not sure whether Trump is prone to be irrational and unstable. This has U.S. allies worrying and rivals preparing for the worst, preparations that increase the risk of unnecessary conflict. Additionally, Trump’s penchant for claiming he would make “great deals” with foreign leaders betrays a transactional approach that sees foreign relations as a series of distinct deals, an approach that undermines the relational dynamics that underpin U.S. alliances in East Asia.

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Trump’s recent declaration that he will withdraw the United States from the Trans-Pacific Partnership (TPP), pre-inauguration statements and actions that undermine the one China Policy, and criticisms of U.S. allies leave Japan scrambling to adjust to a United States that appears likely to pursue very different policies and become far less reliable. At the same time, this may embolden internal voices calling for less cooperation with the United States and more independent policies, thereby weakening alliance ties.

Post-WWII East Asia has been defined by the U.S.-led “hub and spoke” system where Japan, South Korea, Taiwan, and others rely on U.S. security guarantees. This model is built upon bilateral institutions, norms, regular Track I and II meetings, and alliances. Over the past half-decade, President Barack Obama had augmented U.S. commitments to the region with his “pivot to Asia.” In other words, the stability of East Asia has come to rely even more heavily on U.S. leadership.

Conversely, Trump’s success in the U.S. presidential election was built on anti-establishment, anti-institution, and anti-globalist rhetoric. Trump has stated that he intends to be unpredictable and desires to keep his plans secret so to not tip off rivals. Yet unpredictability does not necessarily provide security against rival powers and unnerves allies. During the Cold War, deterrence worked because the United States and USSR could count on the other making rational calculations in the context of a clear balance of power. Allies need reassurances that the United States is a dependable partner; otherwise, they fear abandonment and may pursue alternative security paths that ultimately undermine U.S. power.

This article analyzes several “Trump Shocks” and the implications for Japan. By undermining long-established norms and institutions, Trump severely hinders several of Abe’s domestic and foreign policy objectives and risks provoking undesirable behavior by Tokyo.

The Trans-Pacific Partnership

The Obama and Abe administrations saw TPP as a significant step toward a rule-based free trade region and a check on China’s increasing power in East Asia. Abe has exhausted much of his political capital on TPP, hoping that it would drive structural reform of the Japanese economy, the so-called third arrow of Abenomics. Abe’s ability to withstand opposition and have freer rein for other policies depends on if he can drag Japan out of two decades of low growth and deflation.

Following Trump’s victory, Abe quickly scrambled to meet Trump, hoping to “build trust” with the president-elect and keep his TPP hopes alive. Abe has gone all in with TPP and Japan has already ratified the trade pact. Abe apparently held out hope that Trump will change his mind and come back to the negotiating table, even though he declared his intention to withdraw even after winning the presidency. Trump’s recent renunciation of this massive trade deal represents the first Trump shock Abe has had to endure, a shock that has left him politically damaged, although not yet in danger of losing power.

Trump has also begun criticizing Japanese business practices, a practice looking increasingly like extortion. In a tweet, Trump threatened Toyota with a “big border tax” for cars it plans to import from Mexico. This has created an anxiety-ridden and unstable environment, making it far harder for Abe to cajole corporate Japan into supporting the domestic structural reforms Japan needs, especially in the wake of TPP’s demise. Moreover, in place of TPP Japan might be tempted to throw its backing behind rival China-led regional free trade talks, thereby further eroding U.S. regional leadership.

Taiwan

Following his victory, numerous world leaders called Trump to offer congratulations and to get a sense of the unexpected winner. Trump’s call with Taiwanese President Tsai Ing-wen in particular had a significant impact on Japan and East Asia. Trump downplayed his conversation with Tsai, yet the action was unprecedented as it was the first call between a U.S. president-elect and a Taiwanese president since diplomatic relations were severed in 1979. Following criticism, Trump doubled-down and tweeted that the United States sells billions of dollars in military equipment to Taiwan, implying that therefore the call was justified. Trump is correct; the United States does sell billions in military hardware, a result of the 1979 Taiwan Relations Act, but Trump essentially exposed Washington’s unspoken policy of supporting Taipei despite its public support of the “one China” Policy.

Beijing has responded with strong displeasure and by engaging in provocative behavior, such as seizing a U.S. Navy drone and bragging about recently installed anti-aircraft weapons on the disputed Spratly Islands in the South China Sea. In the Global Times, a party-run newspaper, a recent editorial stated that “mainland China should display its resolution to recover Taiwan by force.”

Trump has responded by criticizing China’s security and economic policies and stating that the United States should not be bound by the one China policy. However, Trump has done so in ways that are deeply disturbing for U.S. allies, especially Japan. During an interview on Fox News on December 11, Trump revealed just how transactional his foreign policy in East Asia is: “I don’t know why we have to be bound by a ‘one China’ policy unless we make a deal with China having to do with other things, including trade.” On one hand, Trump is signaling that he is willing to risk destabilizing regional security with a shift on Taiwan policy as a bargaining tactic over trade. On the other hand, Trump also appears to be signaling that given the right deal from China he would be willing to trade away traditional U.S. policies, a signal particularly unsettling for Japan and Abe, who has essentially put all of Japan’s security eggs in the American basket. Japan has little margin for hedging in case the United States becomes an unreliable ally, which seems increasingly likely under Trump.

The most dangerous aspect of Trump’s musings about possibly ending Washington’s one China policy is that China might pessimistically conclude that this is in fact what he intends to do, up to and including recognizing Taiwan as an independent state, even if this is actually just Trump’s bargaining tactic. This is dangerous because Beijing has consistently identified Taiwan as a core national interest. Trump’s threats over Taiwan might drive China to extreme measures and risks, including a sudden invasion of Taiwan. Although the United States maintains overall air and naval dominance in East Asia, China’s steady implementation of a high-tech anti-access/area denial strategy is attenuating U.S. military dominance, and in the Taiwan Straits, China is already consolidating local military dominance. In this environment, especially as it is perceived from Beijing, the risk that Trump’s brinksmanship might trigger an otherwise avoidable conflict, the first direct great power war since 1945, cannot be lightly dismissed.

U.S. Alliances in East Asia

During the presidential campaign Trump regularly criticized allies, stating, “We defend countries. They do not pay us. But they should be paying us, because we are providing a tremendous service.” Trump accused both Japan and South Korea of freeriding and suggested that the United States could withdraw from both states if they did not give more host-nation support.

Trump’s comments wildly misrepresented the contributions of Japan and South Korea, who now annually pay $1.6 billion and $866 million respectively as host nations for U.S. troops. What was more problematic was that Trump showed a complete lack of understanding for the importance of the alliances, their historical underpinnings, and the region’s critical role in U.S. global strategy. Japanese leaders are reacting negatively. Shigeru Ishiba, an LDP heavyweight and possible future prime minister, remarked: “Japan can’t just sit back and do what it’s told to do by the United States.” Without a clear indication that Trump will continue the Asia pivot, Japan may consider shocking actions of its own.

For Abe, Trump’s ambivalence toward the region is problematic for his own foreign policy ambitions. Abe has sought to normalize Japanese security policy in order to pursue his “proactive peace” doctrine. However, a more assertive Japanese security policy is still dependent on a U.S. security guarantee, as the alliance offsets the need for Tokyo to invest in offensive military capabilities that could fuel a regionally destabilizing arms race and alienate other U.S. allies such as South Korea. Thanks to the U.S. alliance, Japanese normalization efforts even under Abe have been limited to less controversial international security efforts. Abe cannot afford to pursue normalization policies alone. Additionally, Trump’s talk of pulling U.S. forces from the region may further invigorate anti-base activists who are pushing for the removal of the U.S. Marine Corps airbase from Okinawa, rather than its relocation. Indeed, soon after Trump’s election the anti-base governor of Okinawa expressed hope that Trump would remove the Futenma base from the prefecture altogether, anathema for Abe and his policies.

A related problem is that Trump’s unpredictability and seeming opposition for opposition’s sake to many existing U.S. policies may embolden U.S. allies. In the case of Japan, the danger is that Abe and his fellow conservatives will give into nationalist temptation and constituencies by resuming high-level visits to the Yasukuni Shrine, which East Asian critics claim glorifies Japan’s militarist past, confident that the Trump administration will not oppose such visits. An early indicator is that Japan’s defense minister, Tomomi Inada, upon returning from a joint Japan-U.S. ceremony commemorating U.S. sailors killed on the USS Arizona during Japan’s attack on Pearl Harbor, immediately visited Yasukuni.

Implications   

In a few short weeks and in a handful of messages of only 140 characters, Trump, even before taking office, had world leaders scrambling to figure out what is in store for U.S. foreign policy, especially in East Asia. What makes the Trump Shocks even more unpredictable is that the signals he sends are mixed. In some cases, either Trump or his transition team walks back statements, whereas in others, such Taiwan, he doubles down. Thanks to the confusion, U.S. security guarantees no longer look reliable.

Japanese are already concerned that U.S.-Japan relations will deteriorate. During the post-war period, Japan feared either abandonment or entrapment by the United States. In the Trump era, Japan needs to choose: appease Trump’s unpredictable demands to reduce abandonment worries and maintain overwhelming dependence on the United States, or else return to the policy briefly pursued at the end of the last decade by former Prime Minister Yukio Hatoyama, namely reducing Japan’s dependence on the U.S. alliance by improving relations with China. This strategy has recently been tried by some other U.S. allies, most notably the Philippines and Thailand.

If Trump pushes Japan in this direction the first casualty will probably be Abe himself, who is too closely associated with strengthening the U.S.-Japan alliance, just as his great-uncle, Prime Minister Sato, became a casualty of Nixon’s sudden and radical shift in China policy. If this happens, the United States will lose a Japanese leader dedicated to strengthening U.S.-Japan security cooperation and may find itself with a Japan that is more distant and less cooperative.

Tom Le is an Assistant Professor of Politics and International Relations at Pomona College. 

Paul Midford is a Professor of Political Science at the Norwegian University of Science and Technology (NTNU), and a visiting researcher at Pomona College

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