Prime Minister Shinzo Abe might have got exactly what he wanted in his summit with U.S. President Donald Trump. Abe’s three-day visit to the United States, the first since the inauguration of the Trump administration, was marked by friendly overtones and included two nights of dinners in a row and golfing in Palm Beach, Florida, where the president hosted the Japanese leader at his winter estate. Trump gave assurances to Abe over the bilateral security alliance while remaining silent over his earlier aggressive criticism of Japan over trade and currency issues.
But if Trump had merely tamed his protectionist pitch to play up his friendly rapport with Abe, those issues may have just been set aside to be taken up later in the “bilateral dialogue framework” that the two leaders agreed to create to discuss trade and investment matters. A close aide to Abe reportedly said the two leaders confirmed that the trade disputes of the 1980s were a “thing of the past.” But Trump’s remarks before the meeting had been enough to raise the specter of the bitter trade friction between the two countries. It’s not clear whether Abe succeeded in changing the minds of the U.S. president during the talks. The government needs to hold Japan’s ground in the upcoming dialogue.
Concern over Trump’s remarks during his election campaign last year urging Japan along with South Korea to pay more for the cost of security alliances with the U.S. — which put his commitment to the alliances in doubt — may have already been alleviated when U.S. Defense Secretary James Mattis, visiting Tokyo a week earlier, called Japan’s host-nation support of the U.S. troops deployed in the country “a model of cost-sharing.” The two leaders affirmed that the Japan-U.S. alliance is “the cornerstone of peace and security” in the Asia-Pacific region. Just as Mattis did, Trump assured Abe that the bilateral security alliance covers the Senkaku Islands — an assurance that Abe’s administration had earlier sought from Trump’s predecessor Barack Obama to make sure the U.S. will stand behind Japan in the bitter territorial row with China over the islets in the East China Sea.
During the talks in Washington and in Palm Beach, Trump reportedly did not touch on the currency exchange issue and automobile trade. Instead, the two leaders agreed to establish the framework of bilateral dialogue, to be led by Deputy Prime Minister Taro Aso and Vice U.S. President Mike Pence, on three areas — macro economic policies on fiscal and monetary issues, economic cooperation in such fields as infrastructure investment and energy, and the bilateral trade framework. Abe also said the two governments will keep up close discussions between their finance chiefs over currency exchange policies.
Since taking office, Trump has made good on his campaign promise of pulling the U.S. out of the 12-nation Trans-Pacific Partnership free trade pact to instead seek bilateral trade deals that would benefit U.S. workers and industries along his “America First” policy. Officials said the president did not directly push for a free trade agreement with Japan in his talks with Abe. It remains to be seen whether that will be brought up in the course of the agreed bilateral dialogue.
What’s worrisome about Trump’s views on trade issues is that they may not be shaped by a correct understanding of the relevant facts. In singling out Japan — along with China — as countries that engage in trade practices that are “not fair” to American firms during his earlier talks with U.S. business leaders, the president reportedly claimed that countries such as Japan “charge a lot of tax” on U.S. products and said that “if they’re going to charge tax to our countries — if as an example, we sell a car into Japan and they do things to us that make it impossible to sell cars in Japan. … It’s not fair.” Separately, he effectively charged that Japan and China manipulate the exchange rates to drive their currencies lower against the dollar — on which he blamed the U.S. trade deficits.
During the talks, Abe is believed to have sought Trump’s understanding by emphasizing Japan’s contribution to job-creation in the U.S. through investments by Japanese firms. The situation has indeed changed a lot since the 1980s — in 2015, Japanese automakers produced 3.8 million vehicles in the U.S., which, combined with parts suppliers and dealerships, is said to have created 1.5 million jobs there. These are indeed points that need to be made. But it’s not clear whether Abe succeeded in correcting the U.S. president’s distorted views on trade issues. Their joint statement said the two leaders “emphasized that they remain fully committed to strengthening the economic relationships between their two countries and across the region, based on rules for free and fair trade.” It needs to be further ascertained that Japan and the U.S. are on the same page as they discuss economy and trade issues.