Ten days after his election shocked the world, U.S. President Donald Trump was tickled that a major world leader rushed to his gilded Manhattan tower. For Prime Minister Shinzo Abe, it seemed a home run. Being the first to congratulate Trump would give Tokyo a privileged place in the geopolitical pecking order. For Trump, it was public relations gold as Abe gushed about America’s new “trustworthy leader.”
Fast forward 78 days, and the Trump-Abe bromance looks shaky. Shortly after the Nov. 17 Trump Tower visit, Trump pulled the rug out from under Abe’s reform drive by killing the Trans-Pacific Partnership. Next, Trump slammed Japan Inc. icon Toyota in a Twitter rant. Now, he seems to be accusing Tokyo of being every bit the currency manipulator as Beijing. As Beijing and Tokyo devalue, Trump says, “we sit there like a bunch of dummies.”
Is the Trump-Abe alliance doomed? While it’s early days, it’s time to challenge the conventional wisdom that Trump and Abe will build the “trustworthy” relationship Japan craves.
Australia’s Malcolm Turnbull might have some thoughts on the subject. A testy phone call last Sunday with the leader of another bedrock American ally seems a piece of an emerging Trumpism: a president willing to troll Washington’s friends in favor of frenemies like Vladimir Putin.
In their discussion about refugees, Trump reportedly accused Canberra of trying to send America the “next Boston bombers.” In a tweet Thursday, Trump doubled down on dissing Canberra, saying he’d study a “dumb” deal it made with predecessor Barack Obama. Seriously? Whether Trump is actively aiming to alienate trusted friends is anyone’s guess — that includes currency traders, who dumped the dollar yesterday. The U.S.-Japan alliance could be an intriguing bellwether.
Abe’s first blunder was style. A quick perusal of “Art of the Deal,” Trump’s 1987 best-seller, might’ve saved Abe from giving away his negotiating position. His New York drop-by communicated that Japan is desperate for Trump’s approval and that he can name his price. Trump, believe me, will recall Nov. 17 early and often when negotiating a free trade agreement, what level the yen should trade at, the bill he expects Tokyo to pay for America’s security umbrella and what he wants Abe to do to advance U.S. interests in Asia.
It should be clear, by now, that Trump “doesn’t value relationships — he values strength and winning,” Jeremy Shapiro, a former senior State Department official, told the New York Times. “If you rush to the White House to offer a weak hand of friendship, you guarantee exploitation.”
U.K. Prime Minister Theresa May wasn’t happy, for example, to learn hours after visiting the White House that Trump signed a de facto Muslim ban. “You can show up at his doorstep and hold his hand so he doesn’t fall down a ramp,” Shapiro said, “but that doesn’t mean a few hours later when he’s signing an order he thinks at all about how it affects you, your politics or your citizens.”
The risk of getting similarly trumped should inform Abe’s dealings with this White House. Just 14 days into Trump’s presidency, it appears his “America First” mantra really means “America Alone.” This zero-sum-game imperative runs directly afoul of Japan’s interests, including its efforts to fuel export growth. Australia too, as it mulls how to work with a U.S. leader who literally doesn’t know what he doesn’t know about America’s closest relationships.
Tokyo’s balancing act is a particularly precarious one. As nuclear North Korea perfects its intercontinental missiles and China lays claims to Asian seas, Washington’s security blanket has never been more vital. That puts Abe in a deeply subordinate position as the negotiator-in-chief gets transactional with Tokyo. So subordinate, in fact, that when Abe hits the Florida links with Trump next week, he will reportedly pledge public funds via the Government Pension Investment Fund to invest in his America. Will Trump be returning the favor? “Looks like Japanese are going to pay for that wall — with their pension funds!” quips Temple University’s Jeff Kingston. So, the faster Abe disavows himself of the idea he’ll get a better deal with Trump than 15 Asian nations with which Tokyo is negotiating the Regional Comprehensive Economic Partnership the better.
The best thing Abe can do is get serious about structural reforms to increase competitiveness, spur greater innovation, loosen labor markets, cut government bureaucracy, modernize education and empower women. In four-plus years, Abenomics has put a few singles on the score board, but no homeruns. The Bank of Japan’s epic easing gave companies a nice sugar high, but only bold deregulation can turn Japan into a global growth engine. Nothing animates Trump more than winning. Why not morph deflationary Japan into a winning economy that provides America with a tailwind to offset China’s headwinds?
Abe worked hard to raise Japan’s voice on the global stage, but he’s gone about it the wrong way. He’s traveled the globe and held myriad summits — many with Trump pal Putin, who’s just stringing Abe along. Nothing would boost Japan’s clout faster than making its economy great again. The process must start at home, not in a gilded tower 11,000 km away. It’s clear Abe is a sucker for bromance. The catch is to avoid making suckers out of 127 million Japanese.
Based in Tokyo, William Pesek is executive editor of Barron’s Asia.