The Trump Administration and U.S.-Japan Relations
Presentation by Glen S. Fukushima
• U.S.-Japan relations expert Glen S. Fukushima talked about the future of the relations under the “unpredictable” Trump administration on May 4 at a presentation in Chicago hosted by the Japan America Society of Chicago.
• Fukushima, Senior Fellow at the Center for American
Progress, worked on U.S.-Japan and U.S.-China trade negotiations at the
Office of the U.S. Trade Representative (“USTR”) from 1985 to 1990. Following
this assignment, he gained 22 years of business experience in Japan, where
he served as Vice President of AT&T Japan and also President and CEO
of Airbus Japan. He also served two terms as President of the American
Chamber of Commerce in Japan.
Big Change from the Obama Administration
• In November 2009, then President Barack Obama visited
Tokyo and announced himself as
• These six priorities would have been the basis for the U.S. administration’s policy toward Asia if Clinton had won the 2016 election, Fukushima said.
Donald Trump’s View of Japan
• In 1987, Trump spent $100,000 and placed a full-page ad in the New York Times, Washington Post and Boston Globe. The ad criticized Japan on the following five counts: Japan is stealing American jobs; Japan only exports goods to the U.S.; Japan does not import anything from the U.S.; Japan manipulates currency; and Japan is free-riding on the U.S. on defense. Trump repeatedly made these accusations until his 2016 presidential campaign through interviews, comments and articles.
• Fukushima noted that Trump’s criticism is interesting
in that it is less about Japan but more about the U.S. government officials,
both the Democrats and Republicans. “Japanese are really smart, I really
respect them,” he often said. “Our government officials are so stupid
to have allowed Japan to take advantage of the U.S.”
Trump Administration’s Trade & Economic Policies
• Trump announced withdrawal from the Trans-Pacific Partnership
(“TPP”) three days after his inauguration on January 20. He also publicly
talked about withdrawal from the North American Free Trade Agreement (“NAFTA”)
but he now seems to be leaning toward renegotiating it. Regarding the
World Trade Organization (“WTO”), Trump once called it a needless, useless
organization, which caused a concern that he may withdraw the U.S. from
it. But the issue hasn’t come up recently.
• Of the tax issues, the border adjustment tax is particularly a “huge issue,” and there seems to be a strong support for it within some members of the Republican Party, led by House Speaker Paul Ryan. Meanwhile, the idea of introducing a 20% import tariff is a “very contingent issue” because of a strong opposition by the U.S. importers, according to Fukushima.
• Infrastructure investment is one of Trump’s major priorities promised during his campaign and is expected to provide investment opportunities to foreign businesses. Considering that there is a group of strong supporters of the Buy American Act (“BAA”)” in the White House, favoritism for “American companies” is expected in the area of trade and investment. However, this could be problematic because there are so many Japanese (and other foreign) companies investing in U.S. businesses, and clear qualifications of an “American company” have yet to be defined.
U.S.-Japan Relations under the Trump Administration
• Japanese Prime Minister Shinzo Abe arrived in Washington, D.C. on February 10 for a talk with Trump. Subsequently, Trump issued a statement affirming that the U.S.-Japan security relations are the “cornerstone” of the American policy in East Asia. This is the same expression used by the Obama administration, which indicates continuation of the security policy set forth by the previous administration.
• Fukushima said he had an impression that Trump wanted to focus on establishing security relationship with Japan during the meeting in Washington, D.C. and planned to negotiate on the economic aspects in Mar-a-Largo. But the unexpected missile launch by North Korea intervened, and it resulted in the joint statement affirming that the U.S. was “behind Japan 100%.” Overall, on the security side, there has not been any change between the U.S. and Japan, Fukushima added.
• Japan spent several months preparing for the Trump-Abe meeting, Fukushima said, and Abe came to Washington, D.C. with a well-crafted package of proposals. Many of them were proposals of Japanese investment in the U.S. that would result in creating American jobs. The Japanese government hoped this package of proposals was in line with Trump’s agenda of job creation, and would be sufficient to distract Trump from focusing on bilateral trade talks.
• Just before Vice President Mike Pence visited Japan in April for the first U.S.-Japan economic talks, the Trump administration released a statement saying that the upcoming talks would primarily be to set up a framework for subsequent discussions, thus thwarting expectations for a series of real trade negotiations.
• In contrast with the well-prepared Japan, the Trump administration has very few people in place to assume responsibility in forming economic policies in connection with Japan. To date, out of the 4,000 senior administrative positions to be filled, only about 1,000 have been confirmed. It is expected to take a few more months for the administration to fill all the required positions.
• What is sociologically interesting, Fukushima said,
is that the U.S. and Japan are two polar extremes when it comes to the
issue of administrative change. In Japan, bureaucracy is well preserved
irrespective of political changes. In contrast, in the U.S., change of
the administration requires a comprehensive change in its bureaucracy
as well. Considering this, it will be some months until the U.S.-Japan
economic talks actually begin, Fukushima predicted.
• According to Fukushima, the Japanese objectives during
the Pence visit were very clear: first, to make sure that investment proposals
Japan was making would be sufficient to satisfy the U.S.; second, to avoid
bilateral agreement; third, to avoid discussion on currency; and lastly,
to avoid linking national security to trade.
“Personnel is Policy”
• It seems that in the Trump administration, policies can change significantly depending on who assumes which position, Fukushima said. He explained the three groups of people in the Trump administration who have influence on the course of this administration.
• Business people. This group includes former business people with experience in the financial area, such as Secretary of the Treasury Steven Mnuchin, Commerce Secretary Wilber Ross, and Secretary of State Rex Tillerson. These are the people who favor a stable, predictable environment, low tax rate and deregulation, while leaning toward avoiding trade war.
• Military personnel. This group includes Defense Secretary James Mattis and National Security Advisor H.R. McMaster. They prefer stability and value continuity in alliance.
• Unpredictability. This group includes Senior Advisor
Steve Bannon and those who are close to him, such as National Economic
Council Director Gary Cohn, U.S. Trade Representative Robert Lighthizer
and National Trade Council Director Peter Navarro. There is also Jared
Kushner, the husband of Trump’s daughter Ivanka. Kushner “does everything,”
assuming the overall responsibility for preparing for the visits of several
foreign dignitaries to the White House.
The Trump Administration’s Unpredictability
• Fukushima listed several reasons why this administration
is so unpredictable. First, many senior government positions are still
unfilled, and we don’t know who will be responsible for what governmental
functions. The second reason is Trump’s management style, which is based
on personal bond and loyalty to him. He lets people around him make proposals,
but it’s himself who makes a decision in the end. That leads to uncertainty
whether responsible officials’ opinions will be reflected in the final
decision. The third is Trump’s inconsistency, as being proven by numerous
instances, including his comments and attitudes on NATO, Syria, NAFTA,
Terminal High Altitude Area Defense (“THAAD”), Janet Yellen, China policy,
• Before closing, Fukushima asked a question: What is
the priority in the “Trump doctrine”? By “Make America Great Again,” does
he mean to take us all back to the 1950s when the U.S. was the world’s
superpower? Will he work on long-term strategy and vision to achieve his
goals, or will he stick to his real estate developer’s negotiation tactics?
• In the financial area, Fukushima said it’s difficult
to make predictions at this point, with the administration being still
young. In terms of the U.S.-Japan security relationship, Fukushima doesn’t
think that there will be many changes in general.
Glen S. Fukushima