Trans-Pacific View

The US, Japan, and Trade: What Trump Can Learn From the 1990s

As the Clinton administration learned, pushing Japan away over trade issues risks causing chaos in Asia.

The US, Japan, and Trade: What Trump Can Learn From the 1990s
Credit: Facebook/ Prime Minister’s Office of Japan

As U.S. President Donald Trump’s summit with Japan’s Prime Minister Shinzo Abe approaches, the Trump administration should reflect on the risk of allowing the U.S.-Japan alliance to fall into disrepair over disputes about trade and host-nation support. In particular, the president should consider the early experience of the Clinton administration in Asia.

President Bill Clinton initially took a hardline approach on the U.S. trade deficit with Japan and prioritized extracting economic concessions from Tokyo. Before long, the United States found itself struggling to repair a strained, weakened alliance at the moment it needed this partnership most, with crises breaking out on the Korean peninsula and in the Taiwan Strait. With present day Asia increasingly on edge facing mounting threats from North Korea and China, the current administration would be well-advised to learn from the Clinton administration’s early mistakes and reinforce rather than undermine its alliance with Japan.

The President’s Position: “It’s a Very Unfair Situation.”

Although many members of Trump’s administration – including Defense Secretary James Mattis and Secretary of State Rex Tillerson – emphasize the need for a strong alliances around the world, Trump has long been critical of the U.S.-Japan alliance.  In particular, the president argues that Japan is free-riding on American beneficence, and should foot the entire bill for U.S. forces stationed in Japan while opening its market to U.S. exports and addressing its trade surplus with the United States.  He expressed these convictions 30 years ago in a full-page ad in the Washington Post and the New York Times criticizing Japan for “taking advantage of the United States” because the United States was obligated to defend Japan “for free” while Japan “managed to maintain a weak yen against a strong dollar.”

Trump maintains these views today.  Throughout his 2016 campaign, the future president castigated Japan, claiming that the United States is “getting absolutely crushed on trade” with its longstanding ally while “losing a fortune” by basing U.S. forces in Japan (although Japan is one of the leading providers of host-nation support among the United States’ many allies).  More recently, Trump claimed that U.S. relations with Japan are unfair, accusing Tokyo of manipulating the yen and using non-tariff barriers to undermine U.S. auto exports.

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To address these imbalances, the president has promised to ramp up pressure on Japan. He has gone as far as to suggest that he would renegotiate the U.S.-Japan Security Treaty, or even dissolve the alliance and withdraw U.S. troops if his demands are not met. These comments have set Japan – and other U.S. allies – on edge. Mattis’ recent diplomatic outreach to Tokyo and Seoul may prove insufficient to offset the damage these threats will do to U.S. security partnerships in the region.

What will be the consequences if the president doubles down on this hardline approach to imbalances in the U.S.-Japan relationship and prioritizes economics over military cooperation? History offers a useful guide.  There are parallels between the Trump administration’s proposed approach and the stance taken by the Clinton administration in its first term. Unfortunately, the travails of the Clinton administration’s attempts to correct economic imbalances in the U.S.-Japan alliance suggest that the current administration’s proposed policy may do considerably more harm than good.

Hard Lessons From the Past: The Clinton Administration

The Clinton administration came to office in 1993 with one overriding objective: economic growth (“it’s the economy stupid!” as the famous slogan went). One of its top priorities abroad was to reduce the U.S. trade deficit with Japan. The Cold War was over and some members of the administration believed that Washington, freed from its life-or-death struggle with the Soviet Union, could afford to play hardball with allies like Japan that had benefited from American largesse in the past. Clinton’s decision to announce the economic component of his vision for a “New Pacific Community” in Tokyo prior to detailing the security component later in the week in Seoul highlighted this new set of priorities toward Japan.

Clinton quickly began working on the U.S.-Japan Framework for New Economic Partnership in an attempt to facilitate aggressive new negotiations with Japan over its trade imbalances. But this attempt did not get far. American trade representatives demanded quotas on sensitive U.S. products, particularly autos. Japanese negotiators dug in their heels. By 1995, after years of caustic feuding over trade, the allies stood on the brink of a trade war with relations frayed and security cooperation neglected. Faced with intractable opposition from the Japanese, the Clinton administration had little choice but to compromise, discarding most of their initial demands.

As the alliance was battered by these trade disputes, chaos erupted throughout Asia. On the Korean peninsula, North Korea threatened to leave the Non-Proliferation Treaty and began reprocessing plutonium. The crisis escalated, preventive strikes were considered, and Northeast Asia stood on edge. Yet as tensions roiled in Northeast Asia, the U.S.-Japan alliance, languishing from neglect amid the trade spat, was ill prepared to respond. While the general consensus was that the United States would need Japan’s support in a Korean contingency – its bases, its ports, its airfields, its logistics support, and possibly its combat forces –  the alliance was not prepared to provide this support. As the US ambassador to Japan put it, the incident highlighted critical “fault lines” in the alliance. The United States managed to resolve the North Korea crisis temporarily through the Agreed Framework, but it was clear the neglected U.S.-Japan security alliance was in dire need of an upgrade.

As tensions in Korea eased, another crisis erupted in the Taiwan Strait that similarly caught the alliance flat-footed. After a visit by Taiwanese President Chen Shui-bian to the United States, China retaliated with a massive and bellicose display of Chinese military might in the Taiwan Strait. The United States, committed to peace in the strait under the Taiwan Relations Act, was able to resolve the crisis with a reciprocal show of force, sailing two U.S. carrier battle groups through the East China Sea. Nonetheless, the U.S.-Japan alliance was left shaken and uncertain. Could the United States count on Japan’s support in a potential contingency in Taiwan? Would Japan allow U.S. forces operating out of Okinawa to assist Taiwan in the event of a Chinese attack? Was the alliance well-suited to confront a more assertive and powerful China? Neither ally could answer these questions with a high degree of confidence. The emphasis on feuds over auto exports and the consequent neglect of security had left both allies unprepared for the challenges of a new and changing Asia-Pacific.

Through careful statecraft, the Clinton administration was able to reverse the early setbacks of its strategy in Asia. Later diplomacy emphasized Washington’s need for a strong, secure partnership with Tokyo and its other regional allies. The Nye Initiative and the subsequent revision of the U.S.-Japan Guidelines for Defense Cooperation provided a much needed reorientation in U.S. Asia policy, helping to cement the U.S.-Japan alliance as the lynchpin for regional security and stability for years to come.

The United States Can’t Go It Alone

Trump must heed the lessons of the Clinton administration if the United States is to secure its interests in Asia. Now is not the time to focus on fiscal and economic imbalances with Japan to the detriment of security ties. Tensions are rising again on the Korean peninsula, with North Korea closing in on the ability to strike the U.S. homeland. The Taiwan Strait, after a long reprieve, is once again a source of potential instability. Meanwhile, China continues to militarize the South China Sea, pressing its expansive claims more forcefully in defiance of international law.

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The United States cannot cope with these challenges alone. It cannot accomplish its core objectives without help from its allies, particularly in Tokyo, Seoul, and Canberra.  It relies on the bases and facilities they offer, the forces and logistical support they can provide, and their assistance in preventive diplomacy and crisis management. Undermining U.S. ties with any of these allies would significantly undercut the United States’ ability to deter aggression and, if worst comes to worst, wage war in the region.

Mattis once wrote that there should be “no greater friend, no worse enemy” than a U.S. Marine. The United States must endeavor to make this its national slogan on the world stage. Washington cannot throw allies – particularly Japan – to the wolves over pittances.  The stability of Asia, as well as U.S. honor and security, hangs in the balance.

Erik French is a PhD Candidate in Political Science at the Maxwell School, an Adjunct Instructor for American University’s School of International Service, and a junior fellow with the International Policy Scholars Consortium.  He is a Young Leader and former SPF Fellow with the Center for Strategic and International Studies Pacific Forum.  His research interests include strategic studies and U.S. foreign policy.