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Echoes of 1980s trade war seen in Trump comments on Japan

by

Staff Writer

As a presidential candidate, Donald Trump surprised and angered many in Japan with comments about how unfair Japan’s trade policies were.

His Twitter comments threatening Toyota Motor Corp. with a border tax if they built a plant in Mexico and tried to sell their cars in the U.S. sparked heated and defensive rhetoric from Japan’s business leaders, politicians, and media.

But they also dredged up memories of three decades ago, when similar comments were heard in Washington and America’s industrial heartland, where Trump enjoys strong support.

The 1980s were a time when American business leaders and politicians believed Japan would soon surpass the U.S. economically due to its production methods and import barriers.

News about U.S.-Japan relations focused on trade friction. American access to the Japanese market for U.S. beef, oranges, tobacco, rice, telecommunications, autos and auto parts became major political issues that spawned tough negotiations and angry rhetoric on both sides.

In Washington, this became a top priority for then-President Ronald Reagan’s administration. In 1984, at the end of Reagan’s first term, the U.S. Trade Representative office wrote a memorandum on America’s trade policy with Japan going into the second term, warning trade relations with Tokyo were deteriorating rapidly and that Reagan’s first term had seen little progress.

“In light of the absence of substantial new U.S. sales, and the rapid escalation of our bilateral trade deficit, it is not unreasonable to ask if we have wasted four years. Some progress has been made. Yet it is equally true that the situation is worsening daily, and will, in all likelihood, reach a flash point in 1985. Something has to change — soon,” the memorandum said.

By the early 1980s, America’s so-called Rust Belt in particular was in deep trouble. Steelworkers were being laid off due to higher quality, lower-priced, Japanese steel. Japanese autos were selling well, stoking fears that Japan was putting America out of business.

Books like “Japan as Number One” by Harvard University’s Ezra Vogel worried Americans in industrial cities like Pittsburgh, Cleveland, Detroit and Chicago, which feared they could no longer compete.

The 1986 film “Gung Ho,” about an American car plant taken over by Japanese management, was a comedy about cross-cultural working styles. But it struck a nervous chord with American workers who wondered if the future was Japan, even as Japan came under increased criticism from American industry to open its domestic market to all manner of American goods.

The extremely warm personal relationship between Reagan and then-Prime Minister Yasuhiro Nakasone, dubbed the “Ron-Yasu” relationship and held up by many older politicians in Japan today as the ideal relationship between the leaders of both countries, did nothing to ease the tense atmosphere over trade relations.

“The ‘Ron-Yasu’ relationship, while creating the umbrella under which officials pursued issues, also had the unfortunate result of leading Japanese officials to operate from the belief that it sheltered Japan from ‘excessive’ U.S. actions,” the memorandum added.

Between 1979 and 1984, America’s trade deficit with Japan expanded from $9.1 billion to nearly $37 billion.

The Reagan administration was advised to take a tough stance toward Japan on a variety of trade issues during its second term. One area of leverage the U.S. had, the report said, was Section 301 of a 1974 trade act that authorized the president to take all appropriate actions, including retaliation, against a foreign government that violates an international trade agreement judged to be unjustified, unreasonable, discriminatory, or burdens and restricts U.S. commerce.

“Ultimate retaliatory action we are contemplating should be made known to the Japanese at the outset. It should take the form of trade barriers against goods which Japan considers important,” the report advised.

The big question, though, is whether Trump will stop issuing the 1980s-style comments now that he is president in 2017. Richard Dasher, director of the U.S.-Asia Technology Management Center at Stanford University, said that tough talk from Trump toward Japan might continue but not translate into actual policy.

“I think that Trump is likely to continue to make off-the-cuff remarks that sound like a 1980s mindset, but that may not be how policy is executed,” Dasher said. “We may also be watching Trump’s approach toward negotiation. He may be using threats in the press from time to time in order to start from a more advantageous position when actual negotiations begin.”

Back in the 1980s in Japan, there had long been anger, opposition, confusion, puzzlement and even some sympathy toward U.S. demands for Tokyo to open its markets.

Japanese magazine interviews on how some felt were translated into English and made available by the Central Intelligence Agency. In a May 1982 interview in Shokun magazine, Liberal Democratic Party Lower House member Masumi Ezaki warned that the kind of U.S. criticism then, which echoes in Trump’s recent criticism, was going too far.

“It may be easy to make Japan a scapegoat and put more and more pressure on us,” he was reported as saying. “It will lead to a harsh reaction from Japan if (the U.S.) does not give us credit for the good job we have done but go on making statements that unless ‘something dramatic’ is done, this problem cannot be solved and protection and reciprocity laws will be passed.”

Japanese anger would eventually lead to a book by Shintaro Ishihara and Sony co-founder Akio Morita entitled “The Japan That Can Say ‘No,’ ” which called for Japan to stop saying ‘yes’ to the U.S. all the time, especially on trade issues. Due to the controversial reception in the U.S., Morita would eventually distance himself from the work.

Such tensions, now over three decades old, might seem like ancient history to younger Japanese and Americans today.

Ken Moskowitz, an adjunct professor of political science at Temple University Japan, said while some important differences have emerged over the years, some things have remained the same.

“The Japan of the 1980s was a confident, some would say an overweening, trade colossus. Today, we’ve passed through the bubble, the stock market collapse, and ‘Japan passing’ to a period of tepid growth and doubts about Japan’s economic strength,” he said.

On the other hand, he added that structural problems inhibiting Japan’s trade and economic power, low birth rates, opposition to immigration, and barriers to credit and applying innovation, which plagued Japan in the 1980s, remain problematic today.

This is the first of a five-part series on Japan’s efforts to assess the policies of U.S. President Donald Trump.