The U.S.-China trade dispute has heightened global uncertainty about international trade and its impact on the geopolitical balance of power. Experts are evaluating the Trump administration's use of tariffs and sanctions as tools of foreign policy, and multinational corporations, international financial institutions, and even governments are recalibrating to their effect on markets.
As international economics and geopolitics become more explicitly intertwined, Japan has been increasingly visible and active in global affairs. Prime Minister Shinzo Abe's diplomacy in the Middle East and strengthened ties with Russia and India are the most obvious signs of this shift. But perhaps more significantly, Japan's overseas investment has provided an alternative to Chinese development financing.
Antagonism between the United States and China puts Japan in a unique position. In the Japan-U.S. trade talks, to begin in full after Japan's Upper House election in July, American negotiators will likely raise the need to change Japan's global investment strategy in order to meet the growing challenge from China.