Commentary / Japan

The U.S. midterms and their implications

by Glen Fukushima

Tuesday’s U.S. midterm elections did not produce the “blue wave” that some had predicted, but the outcome is still a major victory for Democrats in several respects.

First, Democrats regained a majority in the House of Representatives for the first time in eight years. As a result, all the Republicans who currently chair the 27 House committees will be replaced by Democrats, and they will likely use their subpoena power to launch investigations of and demand materials from President Donald Trump and his team for the first time since the start of the administration two years ago.

Second, more than 100 women, the majority of them Democrats, will assume seats in the new Congress: the most in U.S. history. Given the many women who were motivated to run for office in reaction to the inauguration of the Trump presidency last year, further spurred by the confirmation of Brett Kavanaugh to the U.S. Supreme Court this year, this surge in the number of women legislators is not good news for the president.

Third, Democrats added seven state governors to their ranks (including Illinois, Kansas, Michigan and Wisconsin), creating a more favorable political environment for the Democratic Party as redistricting and other local procedures are taken as the presidential election of 2020 approaches.

Finally, the total national vote for Democratic candidates exceeded the vote for Republican candidates by nearly 8 percentage points, which augurs well for Democrats in 2020 if gerrymandering and voter suppression can be contained and if redistricting proceeds in a fair manner. This Democratic advantage was due in part to the jump in the turnout by women voters and by those voters aged 18 to 29. These millennials voted 67 percent for Democratic candidates.

Although Democrats had much to celebrate, Republicans could also claim victory in retaining their majority in the Senate. In addition to fighting off major Democratic challenges in such states as Texas and Tennessee, Republicans were successful in flipping from Democratic to Republican Senate seats in Indiana, Missouri and North Dakota. Republicans also succeeded in keeping their party in power in the governors’ mansions in Florida, Iowa and Ohio.

By increasing their Senate majority, Republicans strengthened their ability to support the president’s nominees to senior administration positions (Cabinet, deputy secretary, undersecretary and assistant secretary), ambassador and the federal judiciary (Supreme Court, circuit courts of appeal and district courts). More Republican senators will also assure the president that even if the majority Democratic House were to initiate impeachment proceedings, the two-thirds Senate vote necessary to convict will be harder to secure.

Given this higher hurdle, it’s unlikely that Democrats will initiate impeachment proceedings in early 2019. However, the House will likely launch several investigations of the president and his associates related to Russiagate (business ties to Russia as well as potential electoral collusion with Russia during the 2016 presidential campaign), conflicts of interest, obstruction of justice, taxes, etc. If these investigations, and the results of the investigation by special counsel Robert Mueller, uncover serious wrongdoing, the possibility of launching impeachment proceedings can’t be ruled out.

Media speculation in Japan immediately after the midterms was that, facing more resistance to his domestic policies from the majority Democratic House, the president will likely turn to foreign policy to score points and that Japan will be a prime target.

Indeed, in his news conference on Wednesday, Trump stated that Prime Minister Abe “is a very good friend of mine … but I tell him all the time that Japan does not treat the United States fairly on trade. They send in millions of cars at a very low tax. They don’t take our cars. And if they do, they have a massive tax on their cars … we have close to a $100 billion trade deficit with Japan. And Japan has treated us very unfairly.”

This reflects the view that Trump has had of Japan since the 1980s, when he started to excoriate Japan publicly for stealing U.S. jobs, exporting excessively, not buying U.S. products, manipulating its currency and free-riding on defense. The 1980s were a formative period in shaping his worldview of international trade and commerce, and Japan became for him the prime example of a country that took advantage of America, treated it unfairly, took away only benefits, and left America weaker and crippled. It’s as if his views of Japan from the bubble period of the 1980s has been frozen in time.

In recent years, however, Trump’s concerns about Japan have been overtaken by his alarm about China. This is because of China’s vast scale but also because in addition to the economic challenges China poses, it presents a challenge to American pre-eminence politically as well as militarily — something Japan did not do even at the height of its economic power in the 1980s. And this view of China has been reinforced not only by Trump’s advisers, including White House Counsel Peter Navarro, U.S. Trade Representatives Robert Lighthizer and Commerce Secretary Wilbur Ross, but by an increasing number of business executives and scholars who have in recent years become disenchanted by the anti-liberal and anti-democratic trends seen under the rule of Chinese President Xi Jinping.

Given the above, the midterms’ likely implication for Japan is that the Trump administration won’t have much time or resources to spend on Japan. It will have its hands full dealing with an aggressive House that will use its subpoena powers to investigate Trump and his associates in and outside the government for their alleged misdeeds.

To the extent the administration does focus on foreign economic policy, the primary target will be China, for the reasons cited above. Unlike in the ’80s, Japan’s role has been vastly overshadowed by China, about which the litany of American grievances is long — trade deficits, tariffs, nontariff barriers, currency manipulation, forced technology transfers, intellectual property theft, dumping, cyberattacks, subsidies to state-owned enterprises, etc. And these are only the complaints on economic issues.

This focus on China does not mean that the Trump administration will ignore Japan over the next two years. As Vice President Mike Pence mentioned in his Oct. 4 speech at the Hudson Institute, the U.S. wants to conclude a free trade agreement with Japan, although the administration is likely to delay pressing Japan on lowering tariffs on agricultural products until after the Upper House election next summer, to limit political damage to the Liberal Democratic Party.

And, based on what I experienced from my days in the Office of the U.S. Trade Representative in the 1980s, when Robert Lighthizer and U.S. Commerce Undersecretary Gilbert Kaplan were my colleagues, I would predict that on automobiles the preferred U.S. solution will be less on getting American cars into the Japanese market than on limiting Japanese cars imported into the U.S.

In conclusion, we can expect that the Trump administration will continue in its attempt to reduce the bilateral U.S. trade deficit with Japan; increase Japanese investment in the U.S.; increase access to Japan’s market for agricultural products, military equipment, casinos, services, etc.; and limit Japan’s exports to the U.S. of certain products, including autos. But given Japan’s value to the U.S. as a close political and security ally, it is highly unlikely that the two countries will engage in a trade war of the kind we are witnessing between the U.S. and China.

Glen S. Fukushima is a senior fellow at the Center for American Progress in Washington. He served as deputy assistant U.S. Trade Representative for Japan and China, and as president of the American Chamber of Commerce in Japan.