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Home»Finance»Tariff Talks an Opportunity to Reinvigorate the Japan-US Alliance
Finance

Tariff Talks an Opportunity to Reinvigorate the Japan-US Alliance

April 17, 2025No Comments6 Mins Read
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Tariff Talks an Opportunity to Reinvigorate the Japan-US Alliance
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Last week, U.S. President Donald Trump signaled a shift in his approach to tariffs, pausing his “reciprocal” tariffs for a 90-day period to seek a negotiated path to rebalance trade while doubling down on tariffs on China and maintaining a 10 percent universal tariff on all other trading partners. 

This suggested a “pivot” that could recalibrate U.S. trade strategy in ways that reverberate across the Indo-Pacific. While much remains unknown about how the pause, negotiations, and China-targeted trade war will play out, one implication should be clear: at a time of global economic uncertainty, shifting geopolitical alignments, and increasing strategic competition, the United States must double down on its most vital alliances in Asia – starting with the partnership with Japan.

Japan’s Economic Revitalization Minister Akazawa Ryosei arrived in Washington, D.C. on April 16 for talks this week with U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer. Japanese Chief Cabinet Secretary Hayashi Yoshimasa said the trip aimed to “build a relationship of trust” and seek a pathway forward. While the 24 percent “reciprocal” tariffs announced for Japan have been paused, the 10 percent remains in addition to a 25 percent tariff on cars, auto parts, steel and aluminum exports from Japan.

Japan is more than a longtime ally — it is a linchpin of U.S. Indo-Pacific strategy. A strong Japan-U.S. alliance is indispensable for peace and prosperity in Asia, and the two countries are bound by shared democratic values, mutual defense commitments, deep economic integration, and a common vision for a free and open region. But with Trump’s pivot on tariffs raising fresh questions about the future direction of U.S. trade policy, now is the moment to expand — not just preserve — the alliance with Tokyo across military, diplomatic, and economic dimensions.

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The recent visit by Secretary of Defense Pete Hegseth to Japan underscored the growing urgency and opportunity to deepen security cooperation. The trip resulted in meaningful progress on interoperability, regional deterrence, and defense technology collaboration. Notably, Japan reaffirmed its commitment to increasing defense spending — part of a broader strategic realignment that includes acquiring counterstrike capabilities and modernizing its Self-Defense Forces. The U.S., for its part, reaffirmed its ironclad commitment to Japan’s defense under Article 5 of the mutual security treaty, including over the contested Senkaku Islands, which are claimed by China as the Diaoyu Islands.

These developments are essential, but they’re only a starting point. The next steps must include a deeper integration of command-and-control structures, joint military exercises that reflect real-world contingencies (particularly involving Taiwan), and the co-development of next-generation defense technologies, from AI-enabled systems to space-based capabilities. As China grows more assertive, and as North Korea accelerates its nuclear and missile programs deterrence must be made more credible, visible, and tightly coordinated.

At the same time, economic collaboration with Japan must also be reinvigorated. The second Trump administration’s imposition of universal tariffs has created uncertainty for American workers and businesses and for the country’s allies. While the intention may be laudable – to rebalance trade and strengthen the U.S. economy – the risk remains that broad tariffs, especially if poorly targeted, could undermine the very economic partnerships that are essential to compete with China in an era where geoeconomic competition is as fiercely contested – and perhaps more so – than geostrategic competition.

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The U.S. and Japan should approach this moment as a chance to forge a new economic compact — one that balances national security with economic dynamism and the synergistic opportunities across a range of new and emergent technologies. It’s a chance to update the alliance for a new era of strategic competition, including cooperation on digital trade standards, critical minerals, semiconductor supply chains, and mutual protections for strategic industries. The goal should be to counter China’s economic coercion not just with protectionism, but with trusted, rules-based collaboration between allies.

Indeed, Tokyo has been consistent in its willingness to deepen its economic ties with the United States. Consider the proposed U.S. Steel-Nippon Steel acquisition, which unfortunately turned into political football as opposed to an opportunity to demonstrate what collaborative investments and an allied approach to a stronger defense industrial base can look like. While national security concerns must be taken seriously, Japan is not a strategic rival — it is one of the United States’ closest allies. An investment from an ally that injects capital and competitiveness into U.S. industry, safeguarding jobs and revitalizing domestic production, is precisely the sort of result that the administration should be driving for. And now it seems like the Trump administration is now on the right path, so long as the tariff rollercoaster does not complicate the moment, with the Committee on Foreign Investment on United States (CFIUS) re-examining the transaction. 

Diplomatically, the alliance has rarely been better aligned. Japanese Prime Minister Ishiba Shigeru’s recent visit to the U.S. provided an opportunity to further institutionalize the partnership and deepen the shared approach to the Indo-Pacific, including through new trilateral dialogues with South Korea, a reinvigorated Quad, and deeper cooperation with Taipei and other like-minded democracies that can also serve to drive development diplomacy in Southeast Asia and the Pacific in the face of China’s new charm offensive in the region.

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The bottom line is this: While Trump’s tariff policy risked destabilizing Washington’s relationship with Tokyo, it now provides an opening to catalyze a smarter, alliance-driven economic strategy alongside deeper security and diplomatic cooperation. 

The choice is clear. Allies are friends, not foes. Alliances are not just military constructs, but economic and diplomatic force multipliers. Reinvigorated structures — both formal and informal — are necessary to  ensure the Japan-U.S. alliance thrives not just in response to a crisis, but as the foundation for regional stability. If U.S. policymakers are serious about reasserting American strength, they must work hand-in-hand with allies like Japan to meet the challenge of strategic competition with China, and to shape the rules of the road for this century. There is an opportunity to turn this moment of tariff uncertainty into a moment of alliance clarity. But only if Washington acts now — strategically, boldly, and in concert with its allies.

Alliance JapanUS Opportunity Reinvigorate talks Tariff
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