Japan’s Response to Trump 2.0: Sustaining U.S. Ties, Strengthening International Partnerships

This commentary is part of a report from the CSIS Geopolitics and Foreign Policy Department entitled Navigating Disruption: Ally and Partner Responses to U.S. Foreign Policy.

Introduction

Although U.S.-Japan relations under the second Trump administration started on a positive note with the February summit between President Donald Trump and Prime Minister Ishiba Shigeru, the subsequent months have been full of challenges. Negotiations over new U.S. tariffs have dominated the headlines, and there are also questions about the future of the U.S.-Japan alliance. Thus far, Tokyo has responded with a dual strategy of sustaining close ties with the United States while also bolstering relationships with other like-minded countries. However, Japanese leaders are facing increasing pressure both at home and abroad, and there is evidence of growing strains in U.S.-Japan relations.

Moving forward, it is important for the United States and Japan to prevent national political and economic imperatives from derailing mutually beneficial bilateral cooperation. While asking Japan to contribute more on the economic and security fronts, the United States should also articulate a positive vision for strategic cooperation with Japan, offering pathways for collaboration and demonstrating sensitivity to the increasingly fluid political situation in Japan. This will help to ensure that Washington and Tokyo can continue to jointly address intensifying security threats and other challenges, even as domestic priorities increasingly demand leaders’ attention in both countries.

Trump Administration Policies

Since the beginning of the second Trump administration in January 2025, U.S. tariff policies have had the greatest impact on Japan. The United States is Japan’s top export market. The March 26 U.S. announcement of 25 percent tariffs on automobiles and auto parts targeted an industry that constitutes about 21.5 percent of Japan’s total exports and employs roughly 8.3 percent of its workforce. When combined with the 25 percent reciprocal tariff rate separately proposed by the Trump administration, these tariff policies were estimated by some to have the potential to reduce Japan’s total GDP by as much as 0.7–0.8 percent—a significant threat to a country whose annual real GDP growth rate is only around 0.5 percent. Consequently, tariff negotiations were a high priority for Tokyo, and the United States and Japan announced an agreement on July 22 that promised the United States up to $550 billion in Japanese investment and improved market access for U.S. producers, while also providing Japan with some relief in the form of reduced 15 percent rates on reciprocal and automobile tariffs.

The deal was hailed as a significant political victory on both sides, but several major concerns about implementation caused frictions for weeks after the initial announcement, until several new documents were concluded on September 4. First, Japan’s 15 percent reciprocal tariff rate was initially incorrectly implemented, resulting in higher tariffs being charged until an executive order (EO) corrected the matter. Second, the Trump administration did not reduce its original 25 percent tariff on Japanese automobiles to the agreed-upon 15 percent until the September 4 EO, a delay that cost Japanese car companies an estimated $20 million per day and generated much anxiety about whether the United States would fulfill its commitment. Third, the initial announcement raised major questions about the promised $550 billion from Japan, so a memorandum of understanding clarified that investments must be made before the end of Trump’s second term and that the president and a U.S. investment committee would play an active role in selecting projects, with the stipulation that higher tariffs could be imposed if Japan declines to provide funding. Although these new documents resolved some of the ambiguities that had caused tensions in U.S.-Japan relations, they also made it clear that the two countries will continue to negotiate over trade and investment issues in the coming months.

On the security front, Tokyo has been partially encouraged by statements from the White House and the Department of Defense that reaffirm the importance of the U.S.-Japan alliance, as well as by continued U.S. participation in the Quad and trilateral U.S.-Japan-ROK meetings. However, Tokyo is concerned about impending demands from Washington for increased burden sharing and defense spending. After decades of having an informal defense spending limit of 1 percent of GDP, Japan has already embarked upon a historic increase in defense spending to 2 percent of GDP by 2027. Although recent reports indicate that the U.S. government would like Japan to further increase defense spending, this will be difficult considering Japan’s long-term economic challenges related to rising healthcare and pension costs in an aging society and short-term challenges related to inflation, the weak yen, and the negative impacts of U.S. tariffs.

Beyond the bilateral context, decisions by the United States to cut back on foreign aid and other types of global engagement have also impacted Japan indirectly. Tokyo is concerned about the consequences of decreased U.S. engagement on the wider security environment, particularly at a time when threats from China, Russia, and North Korea are intensifying. There are also broader concerns that decreased U.S. investment in soft-power initiatives will increase the relative influence of China in Southeast Asia and other parts of the world in ways that threaten Japanese interests.

Responses from Japan

To some extent, the policies of the second Trump administration echo the dynamics that Japan experienced during the first Trump administration, when Tokyo was pressured to negotiate two bilateral trade agreements and contribute more to defense burden sharing. Throughout both administrations, Japan has responded in a broadly similar manner. Tokyo is pursuing a dual strategy of sustaining a close relationship with the United States while also strategically strengthening partnerships with other countries to stabilize the international environment and fill diplomatic gaps left by changes in U.S. policy. However, due to increasing domestic political instability, questions remain about the extent to which Japan will be able to play a more significant international leadership role.

Sustaining Close Ties with the United States

Japan’s high priority on maintaining close ties with the United States has been clear from the beginning of the second Trump administration. For example, Prime Minister Ishiba was one of the first world leaders to meet with Trump after his inauguration. Similarly, after Trump’s April 2 “Liberation Day” announcement of tariff hikes, Japan was one of the first countries to begin talks with the United States, with lead Japanese negotiator Akazawa Ryosei traveling to Washington on an almost weekly basis.

The intense pace of meetings on tariff and investment issues has received the most attention over the past nine months, but U.S.-Japan alliance cooperation has also been sustained during this period. The United States and Japan are continuing plans to upgrade U.S. Forces Japan to a joint force headquarters, which will modernize its command and control architecture and improve coordination. Joint militaryexercises and bilateral discussions on deterrence and other issues have continued.

However, the second Trump administration’s economic policies and relatively more unilateral tone toward U.S. allies have prompted more visible frustration from Tokyo than during the first Trump administration. For example, in June, Japan canceled the annual 2+2 Ministerial Dialogue of top Japanese and U.S. diplomats and defense chiefs, which was widely interpreted as a reaction to U.S. demands for an increase in Japanese defense spending. In an unusually critical public statement, Onodera Itsunori, chairman of the Policy Research Council of the Liberal Democratic Party (LDP), described Trump’s July 7 tariff notification letter to Japan as “very disrespectful to an ally.” Perceptions of U.S. unreliability have also stimulated debate about whether Japan should become more independent. For example, amid tense tariff negotiations in July, Ishiba said, “We need to make more efforts to become less dependent on the U.S. It would be a problem if we came to regret that they were telling us to do what they say because of that dependence.”

Public opinion also reflects growing concerns about the United States. For example, an annual poll by the Yomiuri Shimbun conducted in June showed that only 22 percent of Japanese respondents somewhat or greatly trust the United States—the lowest figure since the poll was first conducted in 2000. And according to an Asahi Shimbunpoll, 77 percent of Japanese respondents do not think that the United States would defend Japan in a crisis.

Strengthening International Partnerships

At the same time as it has sought to maintain close ties with the United States, Japan has also strengthened its relationships with other key partner countries to attempt to stabilize and strengthen its strategic position. Japan has continued to engage in minilateral dialogues and initiatives with other U.S. allies and partners in the Indo-Pacific. This has been done with direct U.S. involvement in some cases, such as in trilateral meetings with South Korea and the Philippines, as well as with Australia and India as part of the Quad.

In addition to these U.S.-inclusive engagements, Japan has separately cultivated its bilateral ties with other U.S. allies in the Indo-Pacific. Tokyo has engaged positively with South Korean President Lee Jae Myung since he took office in June, including two leaders summits in August and September. Ishiba and Philippine President Ferdinand Marcos Jr. announced in April that they had started talks on a potential information security agreement and an acquisition and cross-servicing agreement, building on the reciprocal access agreement (RAA) between the two countries that entered into force this September. Japan and Australia are continuing to deepen ties through more frequent joint exercises under their own RAA, and at a recent 2+2 meeting, they announced plans for closer cooperation in areas such as economic security and advanced capabilities. In August, Japan’s Mitsubishi Heavy Industries was selected for a $6.5 billion deal to build warships for the Royal Australian Navy, Japan’s most consequential defense sale to date.

Elsewhere in the Indo-Pacific and around the world, Japan has pursued closer relationships with other countries that have been shaken by recent changes in U.S. foreign policy. Ishiba visited Vietnam in April, and the two countries signed cooperation deals on semiconductors and energy. In August, amid worsening U.S.-India ties, Japan and India released a joint vision for increased cooperation in areas such as economy, economic security, mobility, environment, technology and innovation, and health. The same month, the Tokyo International Conference on African Development gathered leaders from 49 African countries to discuss economic cooperation, and Ishiba announced several initiatives to encourage Japanese companies to move into the African market.

Japan has also continued bolstering ties with U.S. allies in Europe on both economic and security issues. Although Ishiba did not attend the July NATO summit, Tokyo has generally been on a trajectory of closer cooperation with NATO since the start of the war in Ukraine. The two sides agreed to step up defense industry cooperation in April, and Japan deployed its Air Self-Defense Force aircraft to Europe for the first time ever for defense exchanges in September. At the July Japan-EU summit, economic security and stabilizing the international trade order were key themes, and the parties agreed to launch a dialogue on defense industry cooperation and negotiations to facilitate the exchange of classified security information. In addition, Japan has engaged bilaterally with partners such as the United Kingdom, which signed an RAA with Japan in 2023. The two countries held their first economic 2+2 meeting in March, and they are also codeveloping a sixth-generation stealth fighter jet with Italy.

Notably, there is little evidence that Japan is seeking a fundamentally closer relationship with China, although ties have warmed since Ishiba took office in October 2024. High-level diplomatic exchanges have resumed, and economic links between the two countries remain strong. However, Tokyo continues to have serious concerns about China’s continuing military buildup, its aggressive behavior in the East and South China Seas, and its economic practices, as well as about China’s burgeoning cooperation with Russia and North Korea. In May, for example, Japan and China accused each other of violating airspace over the disputed Senkaku/Diaoyu Islands. Recent diplomatic activity between Tokyo and Beijing has focused mostly on promoting stability, easing tourist visa restrictions, and reducing tensions over issues such as China’s ban on Japanese seafood imports.

Demonstrating International Leadership?

The question for many observers is whether Japan will be able to play a leading international role, as it did when it spearheaded the creation of the Comprehensive and Progressive Trans-Pacific Partnership after the United States withdrew during the first Trump administration. Japan’s actions during that time were made possible by strong, stable domestic political leadership under former Prime Minister Abe Shinzo, combined with a relative lack of populist, anti-globalization sentiment.

However, the current situation in Japan is very different. In July, the ruling LDP-Komeito coalition lost its majority in both houses of parliament for the first time in 70 years. Populist sentiment has begun to rise in Japan, and Japanese voters are deeply concerned about inflation and other economic issues that have been worsened by U.S. tariffs. In early September, Ishiba announced that he would resign as prime minister, leaving his successor in a difficult situation of having to revitalize a weakened LDP, address voters’ demands, and contend with a volatile foreign policy environment.

These factors suggest that it will be more challenging for Japan to play a prominent role in shaping international policy this time around. However, there are still opportunities for Tokyo to take the lead on important issues and build coalitions of like-minded countries to address mutual concerns. Many other countries are facing similar challenges to Japan, and this can be a source of shared interests rather than weakness.

Implications and Recommendations for the United States

Close relations with Japan are crucial to the security and prosperity of the United States. Despite the challenges of the past nine months, Japan has continued to behave like a responsible partner, accommodating U.S. demands where possible while also trying to protect its own national interests. However, recent changes in U.S. foreign policy have deepened Tokyo’s concerns about Washington’s reliability, and continued uncertainty over trade and other issues risks damaging mutual trust between the two allies. In this context, what can the U.S. government do to promote productive relations with Japan moving forward?

First, the U.S. government should avoid letting domestic economic imperatives derail important mutually beneficial cooperation with Japan on deterrence and other issues, and Washington should reassure Japan of its importance as an ally. Although the Trump administration has made it clear that U.S. economic prosperity is a top priority, that does not preclude it from working with Japan—in fact, close relations with Japan are necessary to ensure the international stability that underpins U.S. success.

Second, the United States should clarify its major strategic priorities beyond the recent focus on trade and offer paths forward for cooperation with Japan on security, economic security, and other issues. New U.S. strategic documents such as the National Defense Strategy may send important signals to Tokyo about how it can work with Washington to address concerns about China or engage in defense industrial base cooperation, for example. There is also much to be gained from building on existing cooperation with Japan on economic security issues. The planned $550 billion in Japanese investment in sectors such as semiconductors, pharmaceuticals, metals, critical minerals, shipbuilding, energy, AI, and quantum computing could catalyze deeper collaboration.

Third, U.S. leadership should be aware of the increasingly fluid and unstable political environment in Japan and exercise flexibility in negotiations. The LDP-Komeito coalition is in its weakest position in over a decade, and Japanese voters are demanding solutions to inflation and other economic problems that have been exacerbated by U.S. tariffs. During his first term, Trump displayed awareness of then–Prime Minister Abe’s domestic political challenges, even publicly commenting that he would wait until after a Japanese election to press Abe on bilateral trade negotiations. Demonstrating the same kind of sensitivity during this second Trump administration will help to ensure that Japanese leaders can build support at home to enable stronger cooperation with the United States.

Kristi Govella is senior adviser and Japan Chair at the Center for Strategic and International Studies (CSIS) in Washington, D.C., and associate professor of Japanese politics and international relations at the University of Oxford.