Japan-U.S. Relations: Issues for Congress
Congressional research reportJan 6, 2023
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Japan-U.S. Relations: Issues for Congress
Updated January 6, 2023
Congressional Research Service
https://crsreports.congress.gov
RL33436
Japan-U.S. Relations: Issues for Congress
Summary
Japan is a significant partner of the United States in a number of foreign policy areas, including
addressing regional security concerns, which range from hedging against Chinese military
modernization to countering threats from North Korea. The U.S.-Japan military alliance, formed
in 1952, grants the U.S. military the right to base U.S. troops—currently around 54,000 strong—
and other military assets on Japanese territory, undergirding the “forward deployment” of U.S.
troops in East Asia. In return, the United States pledges to help defend Japan. The two countries
collaborate through multiple bilateral and multilateral institutions on issues such as science and
technology, global health, energy, and agriculture.
In the past several years, congressional interest in U.S. relations with Japan has centered on the
strength of the U.S.-Japan alliance and particularly on how the governments of Japan and the
United States coordinate their China strategies. In the 118th Congress, legislation has the potential
to re-shape U.S. policy with Taiwan, which in turn has the potential to create a policy gap
between the United States and Japan. In the event of a military contingency that engages the
United States, U.S. bases in Japan would almost certainly be heavily involved. Another element
of congressional activity on Japan is the encouragement of greater coordination among U.S. allies
in the Indo-Pacific and particularly in the often-troubled relationship between Japan and South
Korea. Congressional engagement with Japan has grown in the past decade, evident in frequent
travel to the country and the interest in the bipartisan U.S.-Japan Congressional Caucus with over
100 Members.
Under the President Joe Biden and Prime Minister Fumio Kishida Administrations, the two
countries have reaffirmed the U.S.-Japan alliance as a centerpiece of their respective Indo-Pacific
strategies. Biden has emphasized rejuvenating bilateral alliances to deal with issues like North
Korean denuclearization as well as China’s maritime assertiveness, human rights violations, and
attempts to set new economic rules and norms through its growing outward investment. Both
capitals view China’s policies and practices as a threat to stability in the region, and have
coordinated policies on initiatives like the Quadrilateral Security Dialogue—known as the
“Quad.” In the wake of Russia’s invasion of Ukraine, Japan imposed harsh sanctions and other
financial restrictions on Russia. Japanese leaders are increasingly public about their concern with
Taiwan’s security as linked to Japan’s own security and have moved to substantially increase
their defense spending to respond to the changing strategic landscape.
Over the past decade, U.S.-Japan defense cooperation has improved and evolved in response to
security challenges, such as the North Korean missile threat and the confrontation between Japan
and China over disputed islands. Despite these advances, Japan’s government has indicated a goal
of developing a more autonomous defense posture that is less reliant on U.S. protection. As Japan
ramps up defense spending, Japanese policymakers are weighing to what extent they should
devote resources to indigenous development or rather to focus on initiatives that deepen U.S.Japan joint capabilities.
In the aftermath of the assassination of former Prime Minister Shinzo Abe in July 2022, Japanese
politics remain dominated by the Liberal Democratic Party (LDP) and its smaller coalition
partner Komeito. According to public opinion polls, Kishida’s political standing is weak due to
dissatisfaction with his government’s handling of inflation, a weak yen, and a scandal involving
the Unification Church and fellow LDP members. Despite this lack of popularity, Kishida appears
poised to remain in his position at least through next year given the weak opposition and internal
problems within the LDP. Japan is to host the 2023 G-7 in Hiroshima, Kishida’s hometown.
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Japan-U.S. Relations: Issues for Congress
Japan is the United States’ fourth-largest overall trading partner and Japanese firms are the
second-largest source of foreign direct investment in the United States. Tensions in the trade
relationship increased under the Trump Administration, particularly over its efforts to reduce the
bilateral U.S. trade deficit, such as in motor vehicles, which account for roughly one-third of
Japan’s annual exports to the United States. A limited bilateral trade agreement went into effect in
January 2020 that includes some tariff cuts and digital trade commitments by both sides. Japan is
likely to be an important partner in the U.S.-led Indo-Pacific Economic Framework for
Prosperity, although Japanese leaders have expressed disappointment that the United States has
not indicated it will seek to join the Comprehensive and Progressive Trans-Pacific Partnership
regional trade pact, previously known as the Trans-Pacific Partnership.
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Contents
Developments in 2022 ..................................................................................................................... 1
U.S.-Japan Strategy Aligns, with Converging Views on China and Russia .............................. 1
Japan Expands Its Defense Posture ........................................................................................... 2
Japan’s Transformational Defense Documents ......................................................................... 2
Kishida’s Public Approval Sinks after Abe Assassination ........................................................ 4
A Thaw in Japan-South Korea Tensions ................................................................................... 5
Economic Recovery from COVID-19....................................................................................... 5
U.S.-Japan Renewal of Regional Economic Engagement ........................................................ 6
Congressional Role in U.S.-Japan Relations ................................................................................... 7
Overview of U.S.-Japan Relations .................................................................................................. 8
Biden Administration Policy ..................................................................................................... 9
U.S. and Japanese Policy on China ......................................................................................... 10
The Role of Taiwan ........................................................................................................... 10
U.S. World War II–Era Prisoners of War (POWs) .................................................................. 12
U.S.-Japan Alliance Issues ............................................................................................................ 13
Mutual Defense Guidelines ..................................................................................................... 16
Collective Self-Defense .......................................................................................................... 16
Realignment of the U.S. Military Presence on Okinawa ........................................................ 16
Burden-Sharing Issues ............................................................................................................ 18
Host Nation Support ......................................................................................................... 18
Additional Japanese Contributions ................................................................................... 19
Extended Deterrence ............................................................................................................... 20
Ballistic Missile Defense and Strike Capabilities ............................................................. 21
Japan’s Foreign Policy .................................................................................................................. 22
Japan-China Sovereignty Dispute over the Senkaku Islands in the East China Sea ............... 22
The Quad Signals Broader Approach ...................................................................................... 23
Japan and the Korean Peninsula .............................................................................................. 24
Japan-South Korea Relations ............................................................................................ 24
Comfort Women Issue ...................................................................................................... 26
Japan’s North Korea Policy .............................................................................................. 26
Relations with Southeast Asia ................................................................................................. 27
Economic Issues ............................................................................................................................ 28
Overview of the Bilateral Economic Relationship .................................................................. 28
Japan’s Domestic Economy: Seeking Growth amid Challenges ............................................ 29
U.S. Tariffs Modified Under the Biden Administration .......................................................... 35
U.S.-Japan Trade Negotiations ................................................................................................ 36
Energy and Climate Issues ............................................................................................................ 38
Energy ..................................................................................................................................... 38
Nuclear Energy ................................................................................................................. 39
Natural Gas ....................................................................................................................... 40
Climate Change ....................................................................................................................... 41
Japanese Politics ............................................................................................................................ 42
The LDP Coalition’s Control over the Diet ............................................................................ 42
Japan’s Main Opposition Parties ............................................................................................. 44
Popular Views on Japan’s Security ................................................................................... 44
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Japan’s Demographic Challenge ............................................................................................. 45
Figures
Figure 1. Map of Japan .................................................................................................................. 14
Figure 2. Map of Major U.S. Military Facilities in Japan ............................................................. 15
Figure 3. GDP Growth: Japan and United States .......................................................................... 30
Figure 4. Consumer Price Index: Japan ......................................................................................... 34
Figure 5. Labor Force Participation Rate: Japan ........................................................................... 34
Figure 6. Party Affiliation in the Japanese Diet (Parliament) ........................................................ 43
Contacts
Author Information........................................................................................................................ 46
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T
his report contains two main parts: a section describing recent events and a longer
background section on key elements of the U.S.-Japan relationship.
Developments in 2022
U.S.-Japan Strategy Aligns, with Converging Views on China and
Russia
In 2022, the U.S.-Japan relationship continued to expand, building on early indications by the
Biden Administration and its Japanese counterparts that the U.S.-Japan alliance is a centerpiece of
the two countries’ Indo-Pacific strategies. Tokyo’s and Washington’s strategic priorities appear
increasingly aligned in responding to China’s rising military and economic power. Beyond the
region, the two countries are working in tandem to respond to global challenges, including at the
United Nations, where Japan will occupy a non-permanent seat on the Security Council in 2023
and 2024. Multiple high-level visits, including by President Biden in May 2022, have reinforced
the tight bilateral ties.
Japan’s reaction to Russia’s invasion of Ukraine is emblematic of this trend toward alignment.
Japan’s sanctions against Russia for its annexation of Crimea in 2014 were arguably milder than
those adopted by its Group of 7 (G-7) partners, a response that analysts attribute to Japan’s
pursuit of energy cooperation with Russia and then-Prime Minister Shinzo Abe’s drive to forge a
strategic partnership with Russia.1 In contrast, Prime Minister Fumio Kishida’s government
responded to Russia’s invasion of Ukraine with alacrity, arguing that Russia’s war on Ukraine has
implications for Japan’s security because of the war’s potential to usher in an international system
where the “rule of force” replaces the “rule of law.”2 Japan has adopted most of the sanctions and
other penalties against Russia employed by the United States and Europe, provided humanitarian
and material support for Ukraine despite Russia’s threats to curtail energy supplies, and worked
to rally international support for Ukraine.3 Japan’s membership in the G-7 has provided a venue
for coordination with the United States and major European countries. Japan holds the presidency
of the G-7 in 2023 and plans to host the leaders’ summit in May 2023 in Kishida’s hometown of
Hiroshima.
Congress has debated expanding ties with Taiwan through legislation and, together with the
executive branch, is focused on possible threats to the island from the People’s Republic of China
(China, or PRC). Japan’s government shares the concern that China may attempt to take military
action against Taiwan in the coming years. After then-Speaker of the House Nancy Pelosi visited
Taiwan in August 2022, China’s military, the People’s Liberation Army (PLA), launched
unprecedented large-scale military exercises near Taiwan.4 During one phase of the exercises,
1 Tobias Harris and Haneul Lee, “How Japan and South Korea Can Contribute to an International Response to a
Russian Invasion of Ukraine,” Center for American Progress, February 17, 2022.
2 Japanese Ministry of Foreign Affairs, “Sanction Measures Following the Launch of Military Actions by Russia in
Ukraine (Statement by Foreign Minister HAYASHI Yoshimasa),” February 25, 2022; Japanese Prime Minister’s
Office, “Address by Prime Minister Kishida at the Seventy-Seventh Session of the United Nations General Assembly,”
September 20, 2022.
3 Japanese Prime Minister’s Office, “Japan Stands with Ukraine,” September 26, 2022; “Kishida Denounces Russia,
N.Korea at ASEAN Plus Three Meeting,” NHK, November 12, 2022.
4 CSIS ChinaPower, “Tracking the Fourth Taiwan Strait Crisis,” updated August 31, 2022.
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several short-range ballistic missiles China test-launched splashed down in Japan’s exclusive
economic zone. China’s actions appeared to underscore for many Japanese the impression that
Taiwan’s security is linked to Japan’s security.5 In response to China’s actions, U.S. Secretary of
Defense Lloyd Austin and his Japanese counterpart, Yasukazu Hamada, met in September 2022
and condemned China’s “coercive actions,” calling them “provocative, destabilizing and
unprecedented.”6
Japan Expands Its Defense Posture
As perceived threats from North Korea and China have grown more acute, Japan’s government
has reconsidered national security. With the LDP and its smaller coalition party Komeito in firm
control of the Diet (Japan’s parliament), Kishida theoretically has the power to loosen some of
Japan’s long-held restrictions on its military posture, particularly if he gains Komeito’s support
for these changes. (For background on the restrictions on Japan’s offensive capabilities, see
“Collective Self Defense” below.) After seeing the aggression of Russia’s invasion of Ukraine—
and possibly fearing that Chinese President Xi Jinping could attempt a similar attack on Taiwan—
over half of the Japanese public appeared to shift in favor of spending more on Japan’s defense.7
The U.S. government has long supported Japan investing more in its defense and reinforcing
deterrence against Chinese threats.8
In addition, Japan has expanded its security cooperation with other countries, with the
encouragement of the U.S. government. In early 2022, Japan concluded a Reciprocal Access
Agreement with Australia, allowing the Australian military and the Japanese Self-Defense Forces
(SDF) to conduct joint defense and humanitarian operations. In May, a similar agreement was
signed with the United Kingdom, further expanding Japan’s network of formal defense
relationships. Japan has also continued outreach with India’s military forces to encompass
defense technology and equipment cooperation as well as regular naval exercises to improve
interoperability.9 Although these relationships are not as developed or formalized as the treaty
alliance with the United States, these burgeoning arrangements indicate efforts by Japan to
diversify its defense partnerships and—potentially—lessen its dependence on the United States
for its security.
Japan’s Transformational Defense Documents
On December 16, 2022, the government of Japan released a trio of much-anticipated security
documents: the National Security Strategy (NSS), the National Defense Strategy, and the Defense
Buildup Program. Taken together, these documents provide a blueprint that could fundamentally
5 According to the United Nations Convention on the Law of the Sea, coastal states are entitled to an “exclusive
economic zone” extending no further than 200 nautical miles in which it enjoys sovereign rights to explore and exploit
living and nonliving resources, among other things. U.N. Convention on the Law of the Sea, Part V: Exclusive
Economic Zone. See also “Yomiuri-Gallup Survey Shows Awareness of China, Russia Threats,” Japan News,
December 22, 2022.
6 “Japan and U.S. Plan Joint Research on Defending Against Hypersonic Weapons,” Japan Times, September 15, 2022.
7 “Yomiuri Public Opinion Poll: 51% Agree to Increase Defense Spending,” Yomiuri News, December 4, 2022.
8 See, for example, The White House, “Joint Press Conference with President Obama and Prime Minister Abe of
Japan,” April 24, 2014, https://obamawhitehouse.archives.gov/the-press-office/2014/04/24/joint-press-conferencepresident-obama-and-prime-minister-abe-japan, and “Trump Urges Japan to Buy More U.S. Military Equipment,” Wall
Street Journal, November 7, 2017.
9 “Japan India Maritime Exercise (JIMEX) 2022 Concludes, Demonstrating Continued Commitment to Co-Operation
to Balance China,” Jane’s Country Risk Daily Report, September 23, 2022.
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reshape Japan’s approach to defending itself and to its security relationship with the United
States. The NSS describes China as an “unprecedented strategic challenge,” a tougher
characterization than the 2013 iteration of the NSS, which called China “an issue of concern to
the international community.”10 A top U.S. official hailed the documents as “bold and historic”11
and praised Tokyo’s pledged investments that would enhance deterrence in the region. A
spokesperson for China’s Ministry of Foreign Affairs commented on Japan’s security documents,
saying: “Hyping up the ‘China threat’ to find an excuse for its military build-up is doomed to
fail.”12
Japan’s determination to develop a “counter-strike” capability is arguably among the most
consequential of the policies unveiled in the documents. This capability would allow Japan to
conduct missile strikes against missile-related sites within an adversary’s territory under certain
conditions. Japan currently does not possess the missiles necessary to carry out such strikes and
therefore relies on U.S. strike capabilities or its ballistic missile defense system to deter or defeat
adversary strikes. Due to Japan’s constitutional limitation of acting only in self-defense, the
government has stipulated that Japanese forces are not permitted to conducts pre-emptive attacks,
though it has left vague what it defines as pre-emptive. Press reports indicate that Japan is
considering acquiring the U.S.-made Tomahawk cruise missile as well as upgrading its own
missiles to achieve this goal.13
Japan’s Defense Buildup Program outlines plans to increase Japan’s defense expenditures to 2%
of its national gross domestic product (GDP), in line with NATO standards, by the latter part of
the decade. Post-war Japan has generally limited defense spending to 1% of its GDP. If this
increase were to take effect, Japan’s defense budget would become the third-largest in the world
after the United States and China. Questions remain about how Japan will reach this threshold,
which may involve counting the Coast Guard and other costs not currently considered part of the
defense budget as defense expenditures. Whether or not Japan’s government meets the 2% goal,
the country is poised to devote considerably more of its national budget to defense in a significant
departure from its previous post-war practices.
These documents frame a number of strategic challenges facing Japan, and Japanese
policymakers face a phalanx of decisions about how to address them. To increase the defense
budget, the Japanese government must decide whether to raise taxes, cut other government
spending, and/or go further into debt.14 Will public sentiment supporting Japan’s more assertive
security posture remain durable? Does Japan purchase U.S. military hardware or invest more
heavily in its domestic industry? Defense experts question whether Japan’s defense industry can
produce cutting-edge technology yet caution that Japan may need to upgrade its information
security in order to receive U.S. weapons systems.15 Key to all of these considerations is the
10 Ministry of Foreign Affairs, “National Security Strategy,” December 16, 2022, https://www.mofa.go.jp/fp/nsp/
page1we_000081.html.
11
“Statement by National Security Advisor Jake Sullivan on Japan’s Historic National Security Strategy,” White House
Briefing Room, December 16, 2022.
12 PRC Ministry Foreign Affairs, “Foreign Ministry Spokesperson Wang Wenbin’s Regular Press Conference on
December 16, 2022,” December 16, 2022.
13 “Japan to Buy Tomahawk Missiles in Defense Buildup Amid Fears of War,” Washington Post, December 12, 2022.
14 The Japanese government debt-to-GDP ratio is already the largest in the world. See “Overview of the Bilateral
Economic Relationship.”
15 Motoko Rich and Hikari Hida, “Surrounded by Threats, Japan Rethinks Decades of Military Dependency,” New York
Times, November 14, 2022.
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extent to which Japan seeks to develop more self-sufficiency while simultaneously keeping the
U.S. alliance strong.
Kishida’s Public Approval Sinks after Abe Assassination
In the summer and early fall of 2022, Japan’s political situation continued to be colored by the
after-effects of the July 2022 assassination of former Prime Minister Abe. Abe, 67 at the time of
his murder, was postwar Japan’s longest serving prime minister and arguably continued to be
Japan’s most powerful politician. Since Abe’s death, Kishida’s public approval ratings have fallen
significantly, dipping below his disapproval ratings for the first time since he assumed the
premiership in October 2021.16 If this trend continues, it could destabilize Japanese politics and
complicate Kishida’s ability to wield influence within his LDP and with its smaller coalition
partner, the Komeito party. Kishida may then have less political clout, willingness, and/or time to
push through Japan’s Diet the controversial policies on his agenda, such as significantly
expanding Japan’s defense spending, backing a return to more full-scale use of nuclear power,
and implementing his “new capitalism” economic agenda.17 Kishida’s term as LDP president runs
until 2024, and parliamentary elections do not need to be held until 2025, potentially giving him
time to recover his political standing.
Pollsters and political analysts identify three principal causes for Kishida’s difficulties: discontent
with the government’s response to rising prices, significant public opposition to the government
holding and financing a state funeral for Abe, and his response to revelations in the wake of Abe’s
assassination of the extent of the LDP’s ties to the Unification Church (see the text box below).18
In an apparent effort to remove political appointees with the closest links to the church, Kishida
reshuffled his cabinet in August. However, evidence subsequently surfaced that many of the
newly appointed cabinet ministers and vice-ministers had ties to the church, and an internal LDP
survey revealed that nearly half the LDP’s Diet members have had dealings with the church, such
as receiving political donations or attending church functions.19 In a four-week period in the fall
of 2022, three members of Kishida’s new cabinet resigned due to a variety of scandals.
The July 2022 Assassination of Shinzo Abe
On July 8, a gunman assassinated former Japanese Prime Minister Shinzo Abe, postwar Japan’s longest serving
prime minister and arguably its most powerful politician. Abe was campaigning in the central Japanese city of Nara
when he was shot from behind by a 41-year-old Japanese male who used a homemade gun. The shooting stunned
Japan, where gun violence is virtually non-existent and restrictions on gun ownership are among the strictest in
the world. From 2017 to 2021, Japan’s National Policy Agency recorded 60 total shootings and 14 shooting
deaths.20
16 See, for instance, “Kishida Cabinet Approval Slips Below 30 Pct for 1st Time, Jiji Poll,” Jiji Press, October 13, 2022;
“Support for Kishida Down Further to 35% amid Unification Church Row,” Kyodo News, October 9, 2022;
“Disapproval of Kishida Cabinet Surpasses Approval Rating for 1 st time, Yomiuri Poll,” Japan News, October 3, 2022;
“Approval Rate for Kishida Cabinet Falls to Record Low of 37%,” Asahi Shimbun, November 14, 2022.
17 “The Fallout from Abe Shinzo’s Murder Could Unseat His Successor,” The Economist, September 26, 2022.
18 For example, see Chie Morifuji, “Kishida Cabinet Approval Rating Takes a Hit from Rising Prices, Unification
Church Issue and Abe State Funeral,” Japan News, October 3, 2022.
19 “LDP Lawmaker’s Newly Uncovered Links to Unification Church Take Total to 180,” Jiji Press, October 1, 2022.
20 Ellen Francis et al., “What Are Japan’s Gun Laws? Abe Killing Shocks Nation with Few Shootings,” Washington
Post, July 8, 2022.
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Abe’s assassin claimed to be motivated by Abe’s ties to the Unification Church, a Korea-based religious group with
reportedly about 60,000 members in Japan.21 The gunman reportedly told police that his mother had made large
donations to the church, bankrupting his family. For decades, Abe and other members of the LDP held political
connections to the church, which many Japanese media outlets describe as a “cult,” and which has been accused of
pressuring members to make large financial contributions and/or purchases of “spiritual goods.” 22
A Thaw in Japan-South Korea Tensions
Japan–South Korea relations are perennially fraught because of a territorial dispute and sensitive
historical issues stemming from Japan’s colonization of the Korean Peninsula from 1910 to 1945.
Beginning in 2018, a series of actions and retaliatory countermeasures by both governments
involving trade, security, and history-related controversies caused South Korea–Japan relations to
plummet, eroding U.S. –South Korea–Japan policy coordination. Relations have shown signs of
improvement since the conservative Yoon Suk-yeol became president of South Korea in May
2022. Yoon, who has said he is seeking to increase alignment with the United States on many
Indo-Pacific policies, has placed a priority on improving relations with Japan. With
encouragement from the Biden Administration, Tokyo and Seoul have taken a number of steps to
restore a positive relationship, including holding three trilateral heads-of-state meetings (the first
since 2017) in 2022 in June, September, and November. Following North Korea’s flurry of
missile tests in 2022, the United States, Japan, and South Korea have resumed public trilateral
military exercises, including a first-ever trilateral ballistic missile defense naval exercise in
October 2022. In their November summit, Biden, Kishida, and Yoon issued a joint statement
declaring their intent to “share DPRK missile warning data in real time.”23
While relations appear to be improving, it is unclear how the two governments might resolve the
thorniest historical issues in order to deepen trust and whether Japan’s leaders will reciprocate the
efforts being made by the Yoon government. (See Japan–South Korea Relations section below for
more details.) Since the mid-2010s, many public opinion polls have shown that over 40% of
Japanese respondents and over half of South Korean respondents have poor impressions of the
other country, though these negative ratings appear to have fallen between 2021 and 2022.24
Making concessions to South Korea is reportedly particularly unpopular among many LDP
conservatives, constraining Kishida’s options.25
Economic Recovery from COVID-19
Relative to other developed economies, Japan has lagged behind in its economic recovery from
the COVID-19 pandemic.26 Japan’s GDP increased in 2021 by 1.7% after decreasing by 4.5% in
2020, but the economy contracted in the third quarter of 2022, raising some concerns over
21 “Strings Pulled: Dissecting Japan’s Unification Church Problem,” Nikkei Asia, September 7, 2022.
22 Kana Inagaki et al., “Killing of Shinzo Abe Shines Spotlight on Politicians’ Links with Moonies,” Financial Times,
July 11, 2022; Michelle Ye Hee Lee and Julia Mio Inuma, “As World Gathers to Honor Abe, Japan Grapples with
Church’s Influence,” Washington Post, September 26, 2022. The church’s official name is the Family Federation for
World Peace and Unification.
23 The White House, “Phnom Penh Statement on Trilateral Partnership for the Indo-Pacific,” November 13, 2022.
24 See, for instance, “Will Improved Public Sentiment in Japan and South Korea Lead to Better Relations Between the
Two Countries?,” Genron NPO, September 12, 2022.
25 Daniel Sneider, “N Korea Tests Put Seoul and Tokyo on a Narrow Bridge,” Asia Times, October 14, 2022.
26 Leika Kihara and Tetsushi Kajimoto, “Japan’s Economy Stages Modest Bounce from COVID Jolt, Global Outlook
Darkens,” Reuters, August 15, 2022.
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sustained recovery.27 The government remains focused on economic recovery and is providing
continued fiscal and monetary support. In late October 2022, the Kishida government announced
a new package of economic measures worth ¥39 trillion ($264 billion), building on past stimulus
for economic relief from rising food and energy prices in the fallout from Russia’s invasion of
Ukraine.28 The Bank of Japan (BoJ), unlike other central banks, remains committed to
maintaining a loose monetary policy, taking actions to prevent interest rate increases. Ultra-low
interest rates—the BoJ’s policy rate is set at minus 0.1%—have placed downward pressure on the
yen, which fell to a historic low against the U.S. dollar in October 2022.29 Japanese officials have
historically lauded a weak yen (which makes Japan’s exports cheaper and imports more
expensive), but the effect on import costs is also of increasing concern to many observers given
the already high costs of imported energy and other commodities and Japan’s recent economic
contraction.30 The weak yen, which boosts spending power of foreigners, supports Kishida’s
pledge to revive Japan’s tourism industry, with a goal of increasing foreign tourists’ total
spending to more than 5 trillion yen ($35 billion) annually.31 To this end, on October 11, 2022, the
Japanese government ended pandemic-related visa and other border restrictions on international
travelers. Some critics had described these measures as overly strict.32 Despite some signs of
recovery since 2020, experts suggest the Japanese economy faces major headwinds in the near
term due to a resurgence in COVID-19 cases, rising costs of imported goods, and the economic
slowdown in the United States and other trading partners.33
U.S.-Japan Renewal of Regional Economic Engagement
In May 2022, Japan joined 13 other countries as an inaugural negotiating partner in the U.S.-led
Indo-Pacific Economic Framework for Prosperity (IPEF) initiative. IPEF appears to be the Biden
Administration’s response to urging—from policymakers, stakeholders, and U.S. allies such as
Japan—for the United States to advance a trade agenda in what many consider the world’s most
dynamic economic region.34 IPEF will not take the form of a traditional comprehensive U.S. Free
Trade Agreement (FTA) but instead is focused on four separate “pillars” covering trade, supply
chains, infrastructure and decarbonization, and tax and anti-corruption. At their ministerial in
September 2022, IPEF members announced the negotiating objectives for each pillar. Japan and
most countries (all except for India) opted to participate in all four pillars.35 Unlike typical U.S.
27 International Monetary Fund (IMF), “World Economic Outlook Update: Gloomy and More Uncertain,” July 2022,
https://www.imf.org/en/Publications/WEO/Issues/2022/07/26/world-economic-outlook-update-july-2022; Erica
Yokoyama and Yoshiaki Nohara, “Japan’s Economic Recovery Slammed Back into Reverse by Weak Yen,”
Bloomberg, November 14, 2022.
28 “Japan Enacts $21bn Extra Budget to Tackle Surging Prices,” Nikkei Asia, May 31, 2022; Kazuaki Nagata, “Kishida
Cabinet Approves Fresh ¥39 Trillion Stimulus Package,” Japan Times, October 28, 2022.
29 For more on these developments and the mechanisms of their impact, see “BoJ’s Kuroda Hints at Tweak to UltraLow Interest Rates as Future Option,” Reuters, November 2, 2022.
30 “Japan’s Monetary Policymakers Are Sticking to Their Guns,” The Economist, September 29, 2022.
31
“Japan’s Kishida Pins Hopes on Foreign Tourists to Revive Economy,” Nikkei Asia, October 3, 2022.
32 Trevor Incerti and Hikaru Yamagishi, “How Japan Got the Pandemic Right—and Wrong,” The Diplomat, October
14, 2022.
33 Kana Inagaki, “Japan Economy Accelerates After Covid Restrictions Eased,” Financial Times, August 14, 2022; Ben
Dooley and Hisako Ueno, “Japan Bounces Back to Economic Growth as Coronavirus Fears Recede,” New York Times,
August 14, 2022.
34 See, for example, Asia Society, “A Conversation with Kurt Campbell,” virtual event, June 22, 2021.
35 Office of the U.S. Trade Representative (USTR), “United States and Indo-Pacific Economic Framework Partners
Announce Negotiation Objectives,” press release, September 9, 2022.
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FTAs, IPEF will not cover tariffs and some other market access provisions. Japan and other IPEF
partner countries have generally welcomed renewed U.S. engagement via the framework but also
voiced various concerns and hopes for the agreement.36
Many observers argue that since President Donald Trump withdrew the United States from the
proposed Trans-Pacific Partnership (TPP) in 2017, the United States has failed to present a robust
alternative economic strategy in the region.37 Some Members of Congress and other stakeholders
have expressed support for IPEF as an opportunity for the United States to take a leading role in
establishing updated trade and economic rules in partnership with Japan and key partners in the
region. At the same time, others have raised concerns over the initiative’s potential lack of
substantive commitments, including on market access, the binding nature (or lack thereof) of any
commitments reached, and overall ambition to effectively deepen economic linkages.38 The Biden
Administration has suggested IPEF is to take the form of executive agreements, precluding a role
for Congress in approving the future agreements.39 Some Members have raised concerns over this
approach and the perceived lack of consultation with Congress, emphasizing the need for a
greater congressional role.40 The leaders of Japan and some trading partners have urged the Biden
Administration to consider joining the 11-nation Comprehensive and Progressive Agreement for
Trans-Pacific Partnership (CPTPP), which Japan helped form after U.S. withdrawal from the TPP.
Previously, the Trump and Abe Administrations negotiated two limited bilateral trade deals,
which took effect in 2020, liberalizing some agricultural and industrial goods trade and
establishing rules on digital trade.
Congressional Role in U.S.-Japan Relations
Prior to the late 2010s, congressional engagement on Japan tended to focus on trade-related
issues, concerns about the pace of base realignment on Okinawa, and Japan’s treatment of
history-related disputes with South Korea. (See “Comfort Women Issue” section below.) As
China’s rise re-shaped security outlooks, Congress focused more on the strength of U.S. defense
partnerships in the Indo-Pacific as part of its oversight responsibility. In 2014, the bipartisan U.S.Japan Congressional Caucus was formed, with over 100 Members joining the group. In 2015,
Congress invited then-Prime Minister Abe to address a joint meeting of Congress—the first time
a Japanese leader did so—and Abe outlined a more forceful role for Japan in the alliance. After
Abe was assassinated in 2022, both chambers of Congress passed resolutions honoring his
commitment to the alliance and praising his vision for a free and open Indo-Pacific.
When Congress grew concerned about the state of U.S. alliances in Asia under the Trump
Administration—specifically with Japan and South Korea—it passed the Asia Reassurance
Initiative Act (P.L. 115-409) in late 2018. The law asserted congressional prerogatives, authorized
36 Tobias Harris and Trevor Sutton, “Biden’s Economic Plan Leaves Asian Leaders Wanting More,” Foreign Policy,
May 27, 2022; Matthew P. Goodman and Aidan Arasasingham, Regional Perspectives on the Indo-Pacific Economic
Framework, Center for Strategic and International Studies, April 2022.
37 See, for example, Daniel W. Drezner, “The Policy Gap in the Indo-Pacific,” Washington Post, January 12, 2022.
38 See U.S. Congress, House Committee on Ways and Means, Biden Administration’s 2022 Trade Policy Agenda,
hearing, 117th Cong., 2nd sess., March 30, 2022; and U.S. Congress, Senate Committee on Finance, The President’s
2022 Trade Policy Agenda, hearing, 117th Cong., 2nd sess., March 31, 2022. See also Robert Atkinson, “Biden’s IndoPacific Framework Is a Paradigm Shift,” Foreign Policy, July 1, 2022; and Is the IPEF Glass Half Full or Glass Half
Empty, United States Studies Centre, August 2022.
39 White House, “On-the-Record Press Call on the Launch of the Indo-Pacific Economic Framework,” May 23, 2022.
40 See various comments in U.S. Congress, House Committee on Ways and Means, Biden Administration’s 2022 Trade
Policy Agenda, hearing, 117th Cong., 2nd sess., March 30, 2022; and U.S. Congress, Senate Committee on Finance, The
President’s 2022 Trade Policy Agenda, hearing, 117th Cong., 2nd sess., March 31, 2022.
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more spending, and directed the executive branch to develop a more strategic and long-term
strategy in Asia. The act provides an example of how Congress conducts oversight of U.S. foreign
policy.
More recently, congressional interest in U.S. relations with Japan has centered on the strength of
the U.S.-Japan alliance and particularly on how Japan and the United States coordinate their
China strategies. Members’ concern about China’s ability to forcefully seize Taiwan has led to the
introduction of legislation that has the potential to re-shape U.S. policy with Taiwan, which in
turn could create a policy gap between the United States and Japan. Japan has not committed to
help Taiwan defend itself. (See “The Role of Taiwan” section below.) In the event of a military
contingency that engages the United States, U.S. bases in Japan would likely be involved, and
Japan could become a target for Chinese strikes. Congress may consider consulting with Japanese
interlocutors as they chart a course for U.S. legislation relating to Taiwan.
Congressional interest in U.S. security policy in the Indo-Pacific has also led some Members to
encourage greater coordination among U.S. allies in the region. In the past, Congress had passed
resolutions that encourage greater trilateral cooperation among the United States, South Korea,
and Japan, underscoring the value of the two allies working together.41 During official travel and
other engagement with Japanese and South Korean officials, some Members have emphasized
this importance to Japanese and South Korean officials. Some Members have engaged in trilateral
legislative exchanges, which could be expanded in order to encourage more coordination.
Annual authorization and appropriations bills—including the National Defense Authorization Act
(NDAA), State Department-Foreign Operations Appropriations bills, Military ConstructionVeterans Affairs (VA) Appropriations bills, and any hearings surrounding these measures—
provide opportunities for congressional involvement in and oversight of U.S.-Japan relations,
particularly on issues related to the U.S.-Japan alliance. The FY2023 NDAA (P.L. 117-263, as
amended), for example, included a sense of Congress provision (§1265) stating that the United
States should “further the comparative advantage of the United States in strategic competition”
with China in part by “enhancing cooperation with Japan … including by developing advanced
military capabilities, fostering interoperability across all domains, and improving sharing of
information and intelligence.”
Overview of U.S.-Japan Relations
Forged in the wake of Japan’s defeat in World War II, the U.S.-Japan relationship has transformed
dramatically, with the two former adversaries becoming close allies over the course of seven
decades. After the United States occupied the archipelago from 1945 to 1952, the U.S. Senate
ratified the Treaty of Peace with Japan in March 1952.42 As the confrontation with the Soviet
Union developed, the United States increasingly came to view Japan as a strategic bulwark in the
Pacific. In the post–Cold War period, the relationship endured as Japan embraced international
institutions and practices promoted by the United States. As North Korean threats emerged and
41 For example, in February 2019, when South Korea–Japan relations were entering a particularly tense phase, a
bipartisan, bicameral group of lawmakers, including the chairmen and ranking members of the House Foreign Affairs
Committee and Senate Foreign Relations Committee, co-sponsored a resolution (H.Res. 127 and S.Res. 67 in the 116th
Congress) affirming the importance of Japan–South Korea–U.S. trilateral cooperation.
42 “Japanese Treaty, Security Pact,” CQ Almanac, 1952, https://library.cqpress.com/cqalmanac/document.php?id=
cqal52-1381087.
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China rose economically and militarily, both countries found an imperative to maintain and
modernize the bilateral alliance.
The U.S.-Japan relationship is broad and deep-seated. Globally, the two countries cooperate on
scores of non-traditional security issues through multilateral fora and international institutions,
from nuclear nonproliferation to global health to disaster relief to climate change. The U.S.-Japan
relationship has enjoyed broad support from Congress43 as well as strong public support among
both populations, according to opinion polls.44 As challenges to the international rules-based
order have developed, Japan and the United States have made efforts to strengthen their military
cooperation. Under the Japanese constitution—drafted by U.S. officials during the American
occupation—Japan has limitations on its ability to expand its military capability.45 As threat
perceptions have intensified, however, Japan has made significant changes to how it interprets
legal constraints. U.S. and Japanese defense officials say that the two allies are working more
closely together than ever before.46
Despite these strengths, difficult issues remain. The challenges and threats from China and North
Korea have grown sharper over the past several years: North Korea has accelerated its nuclear
weapon and missile capabilities dramatically since 2016, and China’s economic strength and
military capabilities have grown significantly in the past decade. Japanese leaders expressed
dismay when the United States withdrew from the TPP in 2017. Trump’s apparent skepticism of
the value of the alliance with Japan may have exacerbated the Japanese defense establishment’s
long-standing fears of U.S. abandonment. Many analysts in Japan have indicated worry that U.S.
commitment to the alliance could be impermanent, dependent on who is elected to the U.S.
presidency.47 In addition, Japanese concerns about what Joseph Nye calls the “relative decline” of
U.S. power and presence in the region have risen.48 In the United States, voices have emerged
calling on Japan to contribute more resources to its own defense.49
Biden Administration Policy
The Biden Administration has sought to elevate the U.S.-Japan alliance as a centerpiece of the
U.S. strategy in the Indo-Pacific and embraced an approach to the region that dovetails well with
Japan’s vision. Biden has emphasized the Quadrilateral Security Dialogue—known as the
43 See, for example, S.Res. 706, A resolution Remembering Former Prime Minister of Japan Shinzo Abe, 117 th Cong.
(2021-2022), and H.Res. 349, Reaffirming the Vital Role of the United States-Japan Alliance in Promoting Peace,
Stability, and Prosperity in the Indo-Pacific Region and Beyond, 116th Cong. (2019-2020).
44 “International Public Opinion of the U.S. Remains Positive,” Pew Research Center, June 22, 2022.
45 Article 9 of the Japanese constitution outlaws war as a “sovereign right” of Japan and stipulates that “land, sea, and
air forces, as well as other war potential, will never be maintained.” The constitution has never been amended. Any
attempt to change the constitution would require formidable political and procedural hurdles. A constitutional revision
requires a two-thirds vote in each Diet chamber followed by approval in a nationwide referendum. Furthermore, any
constitutional changes passed by the Diet must also be approved by a majority in a nationwide referendum, and many
opinion polls show the Japanese public to be skeptical about the need for a revision, particularly of Article 9.
46 U.S. Department of State, “Secretary Antony J. Blinken Remarks at the Virtual 2022 U.S.-Japan Security
Consultative Committee Meeting with Defense Secretary Lloyd Austin, Japanese Foreign Minister Hayashi Yoshimasa,
and Japanese Defense Minister Kishi Nobuo,” January 6, 2022.
47 Michael M. Bosack, “Ameliorating the Alliance Dilemma in an Age of Gray-Zone Conflict—Lessons Learned from
the U.S.-Japan Alliance,” Naval War College Review, autumn 2020.
4848 Joseph S. Nye Jr, “The Future of American Power: Dominance and Decline in Perspective,” Council on Foreign
Relations, November/December 2010.
49 Michael D. Swaine, Jessica J. Lee and Rachel Esplin Odell, Toward an Inclusive and Balanced Regional Order: A
New U.S. Strategy in East Asia, Quincy Institute, January 11, 2021, pp. 46-47.
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“Quad”—with Japan, India, and Australia. Biden, like Trump before him, has affirmed that
Article 5 of the mutual defense treaty applies to the Senkaku Islands, a territory claimed by both
Japan and China. The Biden Administration included this pledge in its National Security
Strategy.50 In December 2021, the two governments announced a new five-year cost-sharing
agreement that raised Japanese contributions by around 7% to defray the costs of the U.S.
military presence in Japan. During the Trump Administration, as the previous agreement
approached its expiration, the United States reportedly requested that Japan pay $8 billion
annually, compared to the roughly $2.5 billion it now pays.51 By concluding an agreement that
continued Japan’s approximate contribution from years past, the Biden Administration appeared
to signal its support of long-standing U.S. alliances.
U.S. and Japanese Policy on China
Leaders of Japan and the United States share a fundamental and profound concern about China’s
role in the Indo-Pacific. Both governments have expressed distrust of Beijing’s intentions and
indicated that they see China’s rising power and influence as detrimental to their national
security. This shared strategic vision tethers the two countries and propels closer cooperation.
Japan’s proximity to China heightens its concern, particularly because of China’s expansive
maritime claims and regular military activities near Japan’s southwestern islands. Apparently
driven by its apprehension, Japan has developed stronger and more integrated defense relations
with Australia and India—also U.S. partners—that facilitate military engagement through the
Quad and other cooperative activities such as the annual Malabar naval exercises among the four
countries. These multilateral efforts, which the Obama, Trump, and Biden Administrations
encouraged, reinforce U.S.-Japan alliance cohesion and cement the focus on pushing back on
China’s increased power.
Differences remain, however, in how the U.S. and Japanese governments respond to threats posed
by China. Most fundamentally, Japan and China are uniquely bound by their proximity, requiring
the Japanese government to manage relations with its larger and more powerful neighbor in ways
the United States need not. Japanese leaders have asserted that they seek to stabilize Japan’s
relationship with China as an important trading partner.52 Before the disruption of the pandemic,
the Japanese government was preparing to welcome Chinese President Xi for an official state
visit in the spring of 2020, an example of Japan’s outreach to China before relations soured in the
subsequent years.
The Role of Taiwan
Since 1972, Japan has had “unofficial” relations with Taiwan, the democratic and self-governed
island east of mainland China over which the PRC claims sovereignty.53 As with the United
States, the lack of formal ties belies the depth and breadth of the Japan-Taiwan relationship. The
50
The White House, National Security Strategy, October 2022, p. 38.
51 “U.S. Demanded Japan Pay $8 bil. Annually for Troops: Bolton,” Kyodo News, June 22, 2020.
52 Mireya Solis, “China, Japan, and the Art of Economic Statecraft,” Brookings Institution, February 2020; and Eli
Lake, “The U.S. Talks Tough Before a Meeting with China,” Bloomberg Opinion, March 17, 2021.
53 Since 1972, Japan has diplomatically recognized the PRC but has not taken a position on Beijing’s claim to Taiwan.
The 1972 normalization communique between Japan and the PRC states that the government of Japan recognizes the
PRC as “the sole legal government of China,” and “fully understands and respects” the PRC position on Taiwan
without recognizing or affirming that position. Adam P. Liff, “Japan, Taiwan, and the ‘One China’ Framework after 50
Years,” China Quarterly, 2022, p. 9.
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two countries are each other’s third-largest trading partners.54 People-to-people ties are robust:
Taiwan is a top tourism destination for Japanese visitors, and vice versa. The two sides maintain
de facto embassies (the Taipei Economic and Cultural Representative Office in Japan, in Tokyo,
and the Japan-Taiwan Exchange Association, in Taipei) and have found creative ways to conduct
quasi-diplomacy, including through their respective ruling parties and groups such as the JapanROC Diet Members’ Consultative Council.55 In 2013, Taiwan and Japan concluded an agreement
governing reciprocal fishing rights in disputed areas of the East China Sea and have explored
possible future cooperation between their coast guards. Unlike those of the United States, Japan’s
unofficial ties with Taiwan do not extend to military cooperation.56
Japan’s 2021 defense white paper stated that “stabilizing the situation surrounding Taiwan is
important … for Japan’s security” and that “it is necessary that we pay close attention to the
[cross-Strait] situation with a sense of crisis more than ever before.”57 Some observers caution
that if China were to occupy Taiwan, it could project power deeper into the Western Pacific and
more easily coerce Japan and other U.S. allies in the region.58 Particularly since 2020, some
Japanese politicians have drawn links between Taiwan’s security and that of Japan. Former Prime
Minister Abe cultivated closer ties with Taiwan throughout his career and, after stepping down in
2020, took an even more explicitly pro-Taiwan position, arguing that the United States should
abandon its long-standing policy of “strategic ambiguity” and “make clear that it will defend
Taiwan against any attempted Chinese invasion.”59
A cross-Strait military conflict—particularly if it involved the United States—would carry a range
of implications for Japan. Beyond massive long-term economic and geopolitical ramifications,
PRC operations against Taiwan would likely involve military combat operations close to Japan’s
southwest island chain. A PRC blockade of Taiwan could affect Japan’s trade and sea lines of
communication. The PRC could also launch strikes against U.S. (and/or Japanese) bases in Japan
in an effort to cripple the U.S. military’s ability to come to Taiwan’s aid.
Should the United States come to Taiwan’s defense in the event of a PRC attack, some experts
argue that the U.S. military’s prompt and effective response would hinge on access to U.S. troops,
weapons systems, and materiel based in Japan, particularly in Okinawa.60 The SDF has a range of
capabilities—including but not limited to missile defense; intelligence, surveillance, and
reconnaissance; anti-submarine warfare; logistics support; and humanitarian assistance and
54 Trade Data Monitor, accessed at https://www.tradedatamonitor.com/.
55 Liff, “Japan, Taiwan, and the ‘One China’ Framework,” p. 11; Lawrence Chung, “Landmark Japan-Taiwan Ruling
Party Talks Yield Agreement on Coastguard Drills,” South China Morning Post, August 27, 2021.
56 Although some Japanese lawmakers have raised the prospect of establishing defense ties with Taiwan through
legislation similar to the United States’ Taiwan Relations Act (P.L. 96-8), these proposals have not attracted
widespread support. Masahiro Matsumara, “Taiwan-Japan Military Ties Possible,” Taipei Times, May 21, 2022; Adam
P. Liff, “A ‘Taiwan Relations Act’ for Japan?,” Wilson Center, February 25, 2021.
57 Japan Ministry of Defense, Defense of Japan 2021, p. 92.
58 See, for example, David Sacks, “Enhancing U.S.-Japan Coordination for a Taiwan Conflict,” Council on Foreign
Relations, January 2022.
59 Shinzo Abe, “Op-Ed: The U.S. Must Make Clear to the World It Will Defend Taiwan Against Chinese Invasion,”
Los Angeles Times, April 12, 2022.
60 Sheila A. Smith, “The United States, Japan, and Taiwan: What Has Russia’s Aggression Changed?,” Asia Policy,
vol. 17 no. 2 (April 2022), p. 72; Sacks, “Enhancing U.S.-Japan Coordination for a Taiwan Conflict,” p. 10.
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disaster relief—that could feasibly augment a U.S. response.61 Some experts have called for more
vigorous alliance planning for potential cross-Strait conflict scenarios.62
Fundamental to Japan’s involvement in a potential cross-Strait conflict are domestic legal and
political considerations. Although Japan over the past decade has enhanced its military
capabilities and the legal powers to deploy them, legal and political barriers would confront a
Japanese leader who seeks to work in tandem with U.S. military forces.63 Navigating the
constraining constitutional requirements for Japan to respond militarily could be particularly
challenging in the absence of a direct PRC attack against Japan. Under Japanese law, crafted to
abide by the constitution, such scenarios would require the alliance to conduct “prior
consultation” whereby Japan grants the United States “the use of facilities and areas in Japan as
bases for military combat operations to be undertaken from Japan.” Further, whether the
government of Japan deems such a scenario an “important influence situation” or “survivalthreatening situation” would dictate Japan’s legal options to respond.64
U.S. World War II–Era Prisoners of War (POWs)
For decades, U.S. soldiers who were held captive by Imperial Japan during World War II have
sought official apologies from the Japanese government for their treatment. A number of
Members of Congress have supported these campaigns. The brutal conditions of Japanese POW
camps have been widely documented.65 In May 2009, the Japanese Ambassador to the United
States attended the last convention of the American Defenders of Bataan and Corregidor to
deliver a cabinet-approved apology for their suffering and abuse. In 2010, with the support and
encouragement of the Obama Administration, the Japanese government financed a
Japanese/American POW Friendship Program for former American POWs and their immediate
family members to visit Japan, receive an apology from the sitting Foreign Minister and other
Japanese Cabinet members, and travel to the sites of their POW camps. Annual trips were held
from 2010 to 2018.66
In 2011, Congress introduced several resolutions that thanked the government of Japan for its
apology and for arranging the visitation program.67 The resolutions also encouraged the Japanese
government to do more for the U.S. POWs, including by continuing and expanding the visitation
programs as well as its World War II education efforts. They also called for Japanese companies
to apologize for their or their predecessor firms’ use of un- or inadequately compensated forced
61 Sacks, “Enhancing U.S.-Japan Coordination for a Taiwan Conflict,” p. 10.
62 See, for example, Sacks, “Enhancing U.S.-Japan Coordination for a Taiwan Conflict.”
63 Adam Liff, “The U.S.-Japan Alliance and Taiwan,” Asia Policy, vol. 17, no. 3 (July 2022).
64 Mirna Galic, “Japan’s Authorities in a Taiwan Contingency: Providing Needed Clarity,” War on the Rocks, October
6, 2021.
65 By various estimates, approximately 40% of prisoners held in the Japanese camps died in captivity, compared to 1%3% of the U.S. prisoners in Nazi Germany’s POW camps. Thousands more died in transit to the camps, most
notoriously in the 1942 “Bataan Death March,” in which the Imperial Japanese military force-marched almost 80,000
starving, sick, and injured Filipino and U.S. troops over 60 miles to prison camps in the Philippines. For more
information, see CRS Report RL30606, U.S. Prisoners of War and Civilian American Citizens Captured and Interned
by Japan in World War II: The Issue of Compensation by Japan, by Gary Reynolds (out of print; available to
congressional clients from the coauthors of this report).
66 Since the mid-1990s, Japan has run similar programs for the POWs of other Allied countries.
67 S.Res. 333 (Feinstein) was introduced and passed by unanimous consent on November 17, 2011. H.Res. 324 (Honda)
and H.Res. 333 (Honda) were introduced on June 22, 2011, and June 24, 2011, respectively, and referred to the House
Foreign Affairs Subcommittee on Asia and the Pacific.
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laborers during the war. In July 2015, Mitsubishi Materials Corporation (a member of the
Mitsubishi Group) became the first major Japanese company to apologize to U.S. POWs on
behalf of its predecessor firm, which ran several POW camps that incarcerated over 1,000
Americans.68
Japan Country Data
Population: 124,214,766 (2022 est.)
Percentage of Population over 65: 29.18% (male 16,034,973/female 20,592,496) (2020 est.)
Life Expectancy: 85 years
Area: 377,915 sq km (slightly smaller than California)
Per Capita Real GDP: $41,400(2019 est.)
Primary Export Partners: United States 19%, China 18%, South Korea 6%, Thailand 6% (2019)
Primary Import Partners: China 23%, U.S. 11%, Australia 6%(2019)
Source: CIA, The World Factbook, May 2022.
U.S.-Japan Alliance Issues
The U.S.-Japan alliance has long been an anchor of the U.S. security role in Asia. The alliance’s
foundational documents69 give the U.S. military the right to base U.S. troops and other military
assets on Japanese territory, undergirding the “forward deployment” of U.S. troops in East Asia.
In return, the United States pledges to protect Japan’s security. The U.S.-Japan alliance was
originally constructed as a fundamentally asymmetric arrangement—in the 1950s and 1960s, the
United States assumed most of the responsibility for Japan’s defense. Over the decades, however,
this partnership has shifted toward more equality as Japan’s military capabilities and policies
have evolved. About 54,000 U.S. troops are stationed in Japan and have the exclusive use of
approximately 85 facilities (see Figure 2). The U.S. security guarantee to Japan includes
extended deterrence, known colloquially as the U.S. “nuclear umbrella.”
Since the early 2000s, the United States and Japan have improved the operational capability of
the alliance as a combined force, despite political and legal constraints. Even before the Kishida
government announced plans to raise defense spending close to 2% of GDP, the Abe
administration’s record-high 2019 defense budget had exceeded Japan’s decades-long unofficial
cap on defense spending of 1% of GDP. Further, Japan’s major strategic documents reflect a new
attention to operational readiness and flexibility. In 2014, the Diet passed a law permitting the
SDF to engage in collective self-defense. (See the “Collective Self-Defense” section below.)
Unlike 25 years ago, the SDF is now active in overseas missions, including efforts in the 2000s to
support U.S.-led coalition operations in Afghanistan and the reconstruction of Iraq. Japanese
military contributions to global operations like counter-piracy patrols relieve some of the burden
on the U.S. military to manage security challenges. Due to the increased co-location of U.S. and
Japanese command facilities, coordination and communication have become more integrated in
the past 15 years. The joint response to the 2011 tsunami and earthquake in Japan demonstrated
the interoperability—and limitations—of the two militaries. The United States and Japan have
steadily enhanced bilateral cooperation in many other aspects of the alliance, such as ballistic
missile defense, cybersecurity, and military use of space.
68 “Mitsubishi Materials Apologizes for Using US Prisoners of War as Slave Labor,” The Guardian, July 19, 2015.
69 See “Treaty of Mutual Security and Cooperation Between Japan and the United States of America,” Japan Ministry
of Foreign Affairs, https://www.mofa.go.jp/region/n-america/us/q&a/ref/1.html.
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Figure 1. Map of Japan
Source: Map Resources. Adapted by CRS.
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Figure 2. Map of Major U.S. Military Facilities in Japan
Source: Map Resources. Adapted by CRS.
Notes: MCAS is the abbreviation for Marine Corps Air Station. NAF is Naval Air Facility.
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Mutual Defense Guidelines
In April 2015, the United States and Japan announced the revision of their bilateral defense
guidelines. First codified in 1978 and later updated in 1997, the guidelines outline how the U.S.
and Japanese militaries will interact in peacetime and in war, as the basic framework for defense
cooperation based on a division of labor. The revised guidelines account for developments in
military technology, improvements in interoperability of the U.S. and Japanese militaries, and the
complex nature of security threats in the 21st century. For example, the 2015 revision addressed
bilateral cooperation on cybersecurity, the use of space for defense purposes, and ballistic missile
defense, none of which were mentioned in the 1997 guidelines. The revised guidelines also laid
out a framework for bilateral, whole-of-government cooperation in defending Japan’s outlying
islands and expanded the scope of U.S.-Japan security cooperation to include defense of sea lanes
and, potentially, Japanese contributions to U.S. military operations outside East Asia.
The revised bilateral defense guidelines also sought to improve alliance coordination. The
guidelines established a standing Alliance Coordination Mechanism (ACM), which involves
participants from all relevant agencies in the U.S. and Japanese governments, as the main body
for coordinating a bilateral response to any contingency. The ACM provides a platform for
peacetime planning as well as for contingency and crisis situations. This mechanism removed
obstacles that had inhibited alliance coordination in the past, though one study in 2016 questioned
whether it is capable of effectively coordinating alliance actions in a military conflict.70
Collective Self-Defense
Perhaps the most symbolically significant—and controversial—security reform Japan has
undertaken over the past 30 years was a set of moves in 2014-2015 allowing Japan’s potential
participation in collective self-defense. Under the U.N. Charter, collective self-defense is the right
to defend another country that has been attacked by an aggressor.71 Former Prime Minister Abe
pushed to adjust a highly asymmetric aspect of the alliance: the inability of Japan to defend U.S.
forces or territory under attack. Article 9 of the Japanese constitution renounces the use of force
as a means of settling international disputes. However, Japan has interpreted Article 9 to mean
that it can maintain a military for national defense purposes and, since 1991, has allowed the SDF
to participate in noncombat roles overseas in a number of U.N. peacekeeping missions and in the
U.S.-led coalition in Iraq. The Abe government expanded that interpretation and in 2015 passed a
security legislation package that provides a legal framework for new SDF missions. The removal
of the blanket prohibition on collective self-defense enables Japan to engage more in cooperative
security activities, like noncombat logistical operations and defense of distant sea lanes, and to be
more effective in other areas, like U.N. peacekeeping operations.
Realignment of the U.S. Military Presence on Okinawa
Due to the legacy of the U.S. occupation and the island’s key strategic location, Okinawa hosts a
disproportionate share of the U.S. military presence in Japan. (The westernmost point of the
Ryukyu Island Chain, of which Okinawa is a part, is less than 70 miles from the coast of Taiwan.)
70 Center for Strategic and International Studies, Asia-Pacific Rebalance 2025: Capabilities, Presence, and
Partnerships, January 2016, p. 58.
71 Article 51 of the U.N. Charter provides that member nations may exercise the rights of both individual and collective
self-defense if an armed attack occurs. Article 9 of the Japanese constitution, drafted by U.S. officials during the postwar occupation, outlaws war as a “sovereign right” of Japan and prohibits “the right of belligerency,” stipulating that
“land, sea, and air forces, as well as other war potential, will never be maintained.”
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About 25% of all facilities used by U.S. Forces Japan (USFJ) and over half of USFJ military
personnel are located in the prefecture, which comprises less than 1% of Japan’s total land area.
Many native Okinawans reportedly resent the large U.S. military presence, reflecting in part the
island’s tumultuous history and complex relationships with “mainland” Japan and with the United
States. Although Okinawans’ views are far from monolithic, many Okinawans—including those
who largely support the U.S.-Japan alliance—express concerns about the burden of hosting
foreign troops, particularly about issues like crime, safety, environmental degradation, and
noise.72 As a result, the sustainability of the U.S. military presence in Okinawa remains a critical
challenge for the alliance.73
In 1996, the alliance established a Special Action Committee on Okinawa, which mandated the
return to Okinawa of thousands of acres of land used by the U.S. military since World War II.
Subsequent bilateral negotiations aimed at addressing local resistance culminated in the 2006
U.S.-Japan Roadmap for Realignment, in which United States agreed to remove roughly 8,000
marines from Okinawa to Guam by 2014. Congressional concerns over the scope and cost of the
Guam realignment, as well as broader U.S. government concerns about Guam’s preparedness, led
to later revisions that adjusted the number of personnel and dependents to be relocated.
The central—and most controversial—task of the realignment on Okinawa is to move Marine
Corps Air Station (MCAS) Futenma from crowded Ginowan City to Camp Schwab in Nago
City’s less congested Henoko area. The encroachment of residential areas around the Futenma
base over the decades has raised the risks of a fatal aircraft accident. Most Okinawans oppose the
construction of a new U.S. base for a mix of political, environmental, and quality-of-life reasons,
and demand the Futenma Replacement Facility be moved outside Okinawa.74 In February 2019,
Okinawa held a nonbinding referendum on the relocation of the U.S. base. About 72% of those
who voted opposed the construction of the new base.75
The relocation of MCAS Futenma is frequently challenged by local politicians and activists and is
also beset by construction delays.76 In three successive elections, most recently in September
2022, Okinawan citizens have elected governors who ran on platforms opposed to the relocation
plan and who employed a variety of political and legal strategies to prevent or delay construction
of the base. In the months before the 2022 gubernatorial election, however, LDP-backed
candidates who were more friendly to the relocation scored upset victories, raising the prospect
that politics could be shifting in the prefecture. In the October 2021 parliamentary elections, two
ruling LDP candidates for Okinawa’s seats defeated the anti-base All Okinawa party, and two
more LDP candidates secured proportional representation seats. In January and February 2022
mayoral races on Okinawa—including in the city adjacent to Camp Schwab—incumbent
candidates backed by the central government also won re-election over the All Okinawa
72
“Nearly 80% of Japanese Think Okinawa’s Base-Hosting Burden Unfair,” Kyodo News, May 5, 2022.
73 For more information and analysis, see CRS Report R42645, The U.S. Military Presence in Okinawa and the
Futenma Base Controversy, by Emma Chanlett-Avery and Ian E. Rinehart.
74 “Okinawa’s Vocal Anti-US Military Base Movement,” The Interpreter, Lowy Institute, February 17, 2022.
75 Linda Sieg, “Japan to Push Ahead with U.S. Base Relocation Despite Okinawa Referendum Result,” Reuters,
February 24, 2019, at https://www.reuters.com/article/us-japan-okinawa/japan-to-push-ahead-with-u-s-base-relocationdespite-okinawa-referendum-result-idUSKCN1QE06Q.
76 “Okinawa and Japanese Government Locked in Hostile Battle over US Base Relocation,” The Diplomat, December
21, 2019.
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candidates.77 Some commentators attribute the results to rising concern about China’s threat
among younger Okinawan voters.78
Burden-Sharing Issues
Calculating how much Tokyo pays to defray the cost of hosting the U.S. military presence in
Japan is difficult and depends heavily on how the contributions are counted. Further, the two
governments present estimates based on different data depending on the political aims of the
mathematical exercise. Because of the skepticism among some Japanese about paying the U.S.
military, for example, the Japanese government may use different baselines in justifying its
contributions to the alliance when arguing for its budget in the Diet. Other questions make it
challenging to assess the value and costs of the U.S. military presence in Japan. Is the value to the
United States determined strictly on activities that provide for the defense of Japan, in a narrow
sense? Or is the system of American bases in Japan valuable because it enables the United States
to more quickly, easily, and cheaply disperse U.S. power in the Western Pacific? U.S. defense
officials often cite the strategic advantage of forward-deploying the most advanced American
military capabilities in the Asia-Pacific at a far lower cost than stationing troops on U.S. soil.
Determining the percentage of overall U.S. costs that Japan pays is even more complicated.
According to DOD’s 2004 Statistical Compendium on Allied Contributions to the Common
Defense (the last year for which the report was required), Japan provided 74.5% of the U.S.
stationing cost.79 In January 2017, Japan’s Defense Minister provided data that set the Japanese
portion of the total cost for U.S. forces stationed in Japan at over 86%.80 Other estimates from
various media reports are in the 40-50% range. Many analysts concur that there is no
authoritative, widely shared view on an accurate figure that captures the percentage that Japan
shoulders.
Host Nation Support
One component of Japan’s contribution is the Japanese government’s payment of $1.7 billion$2.1 billion per year (depending on the yen-to-dollar exchange rate) to offset the direct cost of
stationing U.S. forces in Japan. These contributions are provided both in-kind and in cash.81 For
at least the past decade, the United States has spent $1.9 billion-$2.5 billion per year on nonpersonnel costs on top of the Japanese contribution, according to the DOD comptroller.82
77 “All Okinawa’s Political Fall in Spotlight After Ishigaki Election,” Asahi News, February 28, 2022.
78 See, for example, “In Japan’s Okinawa, Ruling Party’s Tough China Stance Helps Win Young Voters,” Reuters,
October 31, 2021.
79 “2004 Statistical Compendium on Allied Contributions to the Common Defense.” See https://apps.dtic.mil/sti/
citations/ADA475431.
80 “How Much Does Japan Pay to Host U.S. Forces? Depends on Who You Ask,” Japan Times. January 31, 2017.
81 Michael J. Lostumbo et al., “Host-Nation Support and U.S. Payments to Other Countries,” in Overseas Basing of
U.S. Military Forces: An Assessment of Relative Costs and Strategic Benefits, 131-66. RAND Corporation, 2013, at
http://www.jstor.org/stable/10.7249/j.ctt2tt915.15.
82 Office of the Under Secretary of Defense, Comptroller, Operation and Maintenance Overview: Fiscal Year 2019
Budget Estimates, March 2018, pp. 200-203; Office of the Under Secretary of Defense, Comptroller, Operation and
Maintenance Overview: Fiscal Year 2017 Budget Estimates, February 2016, pp. 225-228; Office of the Under
Secretary of Defense, Comptroller, Operation and Maintenance Overview: Fiscal Year 2015 Budget Estimates, March
2014, pp. 192-195.
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Japanese host nation support is composed of two funding sources: Special Measures Agreements
(SMAs) and the Facilities Improvement Program (FIP). Each SMA is a bilateral agreement,
generally covering five years, which obligates Japan to pay a certain amount for utility and labor
costs of U.S. bases and for relocating training exercises away from populated areas. Although
negotiations for the SMAs are always contentious, tensions surrounding burden-sharing talks
during the Trump Administration spiked. As the deal neared expiration in late 2020, the Trump
Administration reportedly requested a multifold increase. According to former National Security
Advisor John Bolton, President Trump demanded that Japan increase its contribution to $8 billion
per year.83 Shortly after Biden assumed the presidency, the two sides agreed to extend the existing
agreement for an additional year. In December 2021, a new agreement committed Japan to pay
roughly 7% more than it had in the past: The average annual expenditures for host nation support
over 2022-2026 is approximately ¥211.0 billion (roughly $1.5 billion in current exchange rates).84
Additional Japanese Contributions
In addition to host nation support, which offsets costs that the U.S. government would otherwise
have to pay, Japan subsidizes or compensates base-hosting communities. These are not costs that
would be necessarily passed on to the United States, but U.S. and Japanese alliance managers
argue that the U.S. bases would not be sustainable without these payments to areas affected by the
U.S. military presence. Based on its obligations defined in the U.S.-Japan Mutual Security Treaty,
Japan also pays the cost of relocating U.S. bases within Japan and rent to any landowners of U.S.
military facilities in Japan. Japan pays for the majority of the costs associated with three of the
largest international military base construction projects since World War II: the Futenma
Replacement Facility in Okinawa (Japan provides $12.1 billion), construction at the Marine
Corps Air Station Iwakuni (Japan pays 94% of the $4.8 billion), and construction of facilities on
Guam to support the move of 4,800 marines from Okinawa (Japan pays $3.1 billion, about a third
of the cost of construction).85
Japan is also a major purchaser of U.S. defense equipment. Japan is the third-largest recipient of
overall U.S. Foreign Military Sales delivered in the past five decades.86 The United States
accounted for 94% of Japan’s arms imports from 2010 to 2020, according to estimates from the
Stockholm International Peace Research Institute.87 Recent major acquisitions include Lockheed
Martin F-35 Joint Strike Fighters, Boeing KC-46 Tankers, Lockheed Martin and General
Dynamics Aegis weapons systems, Northrup Grumman E-2D Hawkeye airborne early warning
aircraft, General Dynamics Advanced Amphibious Assault Vehicles, and Boeing/Bell MV-22
Ospreys.
83
John Bolton, The Room Where It Happened (New York: Simon and Schuster, 2020), Chapter 11.
84 Special Measures Agreement (SMA) and Related Measures, Japan Ministry of Foreign Affairs, December 21, 2021,
https://www.mofa.go.jp/press/release/press4e_003074.html.
85 Figures provided by U.S. officials at the Office of the Secretary of Defense, January 2017.
86 These figures do not account for Direct Commercial Sales, information about which is not publicly available. U.S.
Defense Security Cooperation Agency, DSCA Historical Sales Book, FY2020 Edition.
87 Stockholm International Peace Research Institute, “Importer/Exporter TIV Tables,” at http://armstrade.sipri.org/
armstrade/page/values.php. SIPRI’s methodology for calculating the value of arms transfers is available at
https://www.sipri.org/databases/armstransfers/sources-and-methods/.
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Extended Deterrence
The growing concerns in Tokyo about North Korean nuclear weapons development and China’s
modernization of its nuclear arsenal in the 2000s garnered renewed attention to the U.S. policy of
extended deterrence, commonly known as the “nuclear umbrella.” The United States and Japan
initiated the bilateral Extended Deterrence Dialogue in 2010, perhaps recognizing that Japanese
confidence in the credibility of U.S. extended deterrence was critical to its effectiveness, as some
analysts have argued.88 The dialogue is a forum for the United States to assure its ally and for
both sides to exchange assessments of the strategic environment. The Japanese government
welcomed the 2018 and 2022 Nuclear Posture Reviews.89
Japanese leaders have repeatedly rejected the idea of developing their own nuclear weapons
arsenal. Although Japan is a ratified signatory to the Treaty on the Non-Proliferation of Nuclear
Weapons, and Japanese public opinion is largely antinuclear, a lack of confidence in the U.S.
security guarantee could lead Tokyo to reconsider its own status as a nonnuclear weapons state.
Then-candidate Trump in 2016 stated that he was open to Japan (and South Korea) developing its
own nuclear arsenal to counter the North Korean nuclear threat.90 Proponents of Japan developing
nuclear weapons argue that this would deter Chinese aggression and allow the United States to
use its own capabilities elsewhere, essentially freeing up U.S. assets.91 Other analysts have argued
that Japan would face negative consequences if it were to develop its own nuclear weapons,
including significant budgetary costs, reduced international standing in the campaign to
denuclearize North Korea, and the possible imposition of economic sanctions that would be
triggered by leaving the global nonproliferation regime.92 Some commentators also warn about
potentially encouraging South Korea and/or Taiwan to develop nuclear weapons capability and
triggering a counterreaction by China, which might create instability that could lessen Japan’s
economic and diplomatic influence in the region.93 For the United States, analysts have noted that
encouraging Japan to develop nuclear weapons could mean diminished U.S. influence in Asia, the
unraveling of the U.S. alliance system, and the possibility of creating a destabilizing nuclear arms
race in Asia.94
88 Brad Roberts, “Extended Deterrence and Strategic Stability in Northeast Asia,” National Institute of Defense Studies
(Japan), Visiting Scholar Paper Series, No. 1, August 9, 2013.
89 Japan Ministry of Foreign Affairs, “Release of the U.S. Nuclear Posture Review (NPR) (Statement by Foreign
Minister Hayashi Yoshimasa),” October 28, 2022; Japan Ministry of Foreign Affairs, “The Release of the U.S. Nuclear
Posture Review (NPR) (Statement by Foreign Minister Taro Kono),” February 3, 2018, https://www.mofa.go.jp/press/
release/press4e_001893.html.
90 For example, Trump stated, “And, would I rather have North Korea have [nuclear weapons] with Japan sitting there
having them also? You may very well be better off if that’s the case. In other words, where Japan is defending itself
against North Korea, which is a real problem.” “Transcript: Donald Trump Expounds on His Foreign Policy Views,”
New York Times, March 26, 2016.
91 Anders Corr, “Japan: Go Nuclear Now,” Forbes, January 31, 2017.
92 See, for example, Nobumasa Akiyama and Kenta Horio, “Can Japan Remain Committed to Nonproliferation?,”
Washington Quarterly, Spring 2013; and “The U.S. Doesn’t Need to Worry about Japan (or Any Other Ally) Going
Nuclear,” The Diplomat, February 5, 2021.
93 Brendan Taylor and H. D. P. Envall, “A Nuclear Arms Race in Northeast Asia?,” Australia National University
College of Asia and the Pacific, Summer 2017-2018.
94 See, for example, Robert Manning, “Trump’s ‘Sopranos’ Worldview Would Undo Asian Alliances,” New Atlanticist
blog post, March 29, 2016.
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Ballistic Missile Defense and Strike Capabilities
Japan also plays an active role in extended deterrence through its ballistic missile defense (BMD)
capabilities, which it began to pursue in 2003, largely in response to the growing ballistic missile
threat from North Korea. Whereas prior to the introduction of BMD Japan was entirely reliant on
the U.S. nuclear deterrent, it now actively contributes to extended deterrence,95 and many analysts
see U.S.-Japan efforts on BMD as the most robust aspect of bilateral security cooperation. DOD’s
2019 Missile Defense Review stated that “Japan is one of our strongest missile defense
partners.”96 Japan and the United States both deploy land- and sea-based missile defense systems
in Japan.97
In an about-face that was reportedly unanticipated by U.S. and Japanese observers, Japan
announced in June 2020 that it would suspend a high-profile plan to purchase from the United
States two Aegis Ashore ballistic missile defense batteries. The plan had been announced in 2017
as North Korea ramped up nuclear and ballistic missile testing, and alliance officials had touted
the move as a central component of Japan’s defense against North Korea.98 Aegis Ashore would
have provided a new layer of defense against incoming North Korean ballistic missiles for Japan
and U.S. forces stationed there and could have afforded the U.S. military the flexibility to deploy
its own Aegis ships now defending Japan to other parts of the region, including the South China
Sea, Philippine Sea, and Indian Ocean.99
The 2020 Aegis Ashore reversal intensified a decades-long debate over whether Japan should
acquire strike capabilities. Although Japan is pursuing other missile systems for defensive
purposes, it currently does not have the ability to conduct missile strikes on enemy territory. In
August 2020, shortly before Abe announced his resignation, the LDP called on the Japanese
government to consider acquiring this capability.100 Kishida has reportedly said that it is an
“option,” and many observers expect this provision to be included in the upcoming defense policy
documents.101 Movement toward adopting a strike mission reflects aspirations by some Japanese
to achieve greater strategic autonomy and could mark a departure from the long-standing division
of labor in the alliance with the United States as the “spear” and Japan as the “shield.”102
95 Japan Ministry of Defense, National Defense Program Guidelines for FY 2019 and Beyond, December 18, 2018, p. 8
(provisional translation); Sugio Takahashi, Ballistic Missile Defense in Japan: Deterrence and Military
Transformation, Institut Français des Relations Internationales, December 2012, pp. 20-22.
96 U.S. Department of Defense, 2019 Missile Defense Review, January 17, 2019, p. 67; Thomas Karako, “Shield of the
Pacific: Japan as a Giant Aegis Destroyer,” Center for Strategic and International Studies, May 23, 2018.
97 Japan Ministry of Defense, Defense of Japan 2018, White Paper, August 2018, p. 324.
98 Mike Yeo, “Japan Suspends Aegis Ashore Deployment, Pointing to Cost and Technical Issues,” Defense News, June
15, 2020, https://www.defensenews.com/global/asia-pacific/2020/06/15/japan-suspends-aegis-ashore-deploymentpointing-to-cost-and-technical-issues/.
99 Jeffrey W. Hornung, “Is Japan’s Interest in Strike Capabilities a Good Idea?” War on the Rocks, July 17, 2020,
https://warontherocks.com/2020/07/is-japans-interest-in-strike-capabilities-a-good-idea/.
100 Chieko Tsuneoka, “Japan Edges Toward Military Pre-Emptive Strike Option,” Wall Street Journal, July 31, 2020,
https://www.wsj.com/articles/japan-edges-toward-military-pre-emptive-strike-option-11596195100.
101 “Japan Eyes Using Enemy Base Strike Capability with U.S.,” Kyodo News, November 26, 2022.
102 Sheila Smith, Japan Rearmed (Cambridge, MA: Harvard University Press, 2019), p. 125; Yuki Tatsumi, “Japan
Eyes ‘Counter-Attack’ Capability Against North Korea Missile Threat,” The Diplomat, March 31, 2017; Michael
Bosack, “The LDP Weighs in on Japan’s Defense Posture,” Tokyo Review, March 29, 2018,
https://www.tokyoreview.net/2018/03/the-ldp-weighs-in-on-japans-defense-posture/.
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Japan’s Foreign Policy
Japan’s foreign policy is broadly shaped by its security alliance with the United States and by its
concern about China’s military and economic power. Abe and his two successors have moved to
diversify Japan’s international network of relations to pursue its interests.
Japan-China Sovereignty Dispute over the Senkaku Islands in the
East China Sea
Japan, China, and Taiwan claim a group of uninhabited land features103 in the East China Sea
known as the Senkaku Islands in Japan, Diaoyu in China, and Diaoyutai in Taiwan. The eight
small, uninhabited land features are administered by Japan but also claimed by China and Taiwan.
The Senkakus dispute has simmered for decades and first became a major source of discord in
China-Japan relations in 2010. Tensions have spiked multiple times since then, and although
Beijing and Tokyo have renewed efforts to deescalate tensions and avoid clashes, the dispute has
remained potential kindling for a major flare-up in an increasingly uneasy bilateral relationship.
Starting in the fall of 2012, in the wake of another intensification of the dispute, China began
regularly deploying maritime law enforcement ships near the islands and stepped up what it
called “routine” patrols to assert jurisdiction in “China’s territorial waters.”104 The number of
Chinese vessels entering the territorial seas105 surrounding the islands from 2013 through August
2022 ranged from zero to 24 per month (and averaged 8.3 per month). While the average number
of Chinese vessels entering the territorial sea was fairly consistent during that time frame, the
average number of vessels entering the contiguous zone—a zone extending an additional 12
nautical miles out from the outer edge of the territorial sea—increased markedly beginning in
mid-2019.106 Most of these patrols appear to be conducted by the China Coast Guard, which has
been instrumental in advancing China’s interests in disputed waters in the East and South China
Seas.107
China-Japan tensions have played out in the air domain near the Senkakus as well. The
government of Japan reported that scrambles by Japan Air Self Defense Force aircraft against
“Chinese aircraft” increased eightfold between FY2010 (96 scrambles) and FY2016 (851
scrambles). The average number of scrambles from FY2017 to FY2020 was 568.108
103 Although the disputed territory commonly is referred to as “islands,” it is unclear if any of the features would meet
the definition of island under international law.
104 “Chinese Ships Continue Patrol Around Diaoyu Island,” China Daily, October 28, 2012.
105 According to the United Nations Convention on the Law of the Sea, coastal states are entitled to a “territorial sea,” a
12-nautical-mile area extending from the low-water line along a coast. The sovereignty of a coastal state extends to this
territorial sea. U.N. Convention on the Law of the Sea, Part II: Territorial Sea and Contiguous Zone.
106 Japan Times, “Japan Braces for Moves in East China Sea after China Coast Guard law,” February 1, 2021,
https://www.japantimes.co.jp/news/2021/02/01/national/japan-china-coast-guard-law-senkakus/; Japan Ministry of
Foreign Affairs, “Trends in Chinese Government and Other Vessels in the Waters Surrounding the Senkaku Islands,
and Japan’s Response—Records of Intrusions of Chinese Government and Other Vessels into Japan’s Territorial Sea,”
updated September 9, 2022, https://www.mofa.go.jp/region/page23e_000021.html.
107 U.S. Department of Defense, Annual Report to Congress: Military and Security Developments Involving the
People’s Republic of China 2018, May 16, 2018, pp. 71-72; Ryan D. Martinson, “Echelon Defense: The Role of Sea
Power in Chinese Maritime Dispute Strategy,” U.S. Naval War College China Maritime Studies Institute, 2018, pp. 1617.
108 Japan Ministry of Defense, “China’s Activities in East China Sea, Pacific Ocean, and Sea of Japan,” updated
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These patrols exemplify how the dispute over the Senkakus has played out primarily in the “gray
zone,” defined by some as the ambiguous space between peace and conflict, with nonmilitary
actors such as coast guards, fishermen, and China’s maritime militia on the front lines.109 China’s
approach to the dispute (as well as its disputes in the South China Sea) appears to be aimed at
exploiting the gray zone to gradually consolidate its control and influence over contested space
without escalating to armed conflict.110 Japan has prioritized enhancing its ability to counter gray
zone activities in addition to strengthening its traditional military capabilities.111
Japan’s administration of the Senkakus is the basis of the U.S. treaty commitment to defend that
territory. U.S. administrations going back at least to the Nixon Administration have stated that the
United States takes no position on the territorial disputes. However, it has also been U.S. policy
since 1972 that the 1960 U.S.-Japan Security Treaty covers the Senkakus, because Article 5 of the
treaty stipulates that the United States is bound to protect “the territories under the Administration
of Japan,” and Japan administers the Senkakus.112 In its own attempt to address this perceived gap
between U.S. official neutrality on the sovereignty question and its support for Japan against
China’s attempts to change the status quo, Congress inserted in the FY2013 (P.L. 112-239) and
FY2018 National Defense Authorization Acts (H.R. 4310, P.L. 112-239) a resolution stating,
among other items, that “the unilateral action of a third party will not affect the United States’
acknowledgment of the administration of Japan over the Senkaku Islands.”113
China and Japan also dispute maritime rights in the East China Sea more broadly, with Japan
arguing for a “median line” equidistant from each country’s claimed territorial border dividing
the two countries’ exclusive economic zones in the East China Sea. China rejects Japan’s claimed
median line, arguing that it has maritime rights beyond this line.114
The Quad Signals Broader Approach
In 2017, the Trump Administration renewed an effort to develop the Quadrilateral Security
Dialogue, also known as “the Quad,” a coalition of Australia, India, Japan, and the United States
September 2021. Japan’s fiscal year begins on April 1 and ends on March 31 the following year.
109 For more on the gray zone concept, see Jonathan Wilkenfeld et al., “Escalation Management in the Gray Zone:
Shaping Decision Calculus: From Theory to Causal Understanding,” University of Maryland for the Minerva Research
Initiative, December 2021, p. 5; RAND Corporation, “Research Brief: A New Framework for Understanding and
Countering China’s Gray Zone Tactics,” 2022, p. 1; and Jake Harrington and Riley McCabe, “Detect and Understand:
Modernizing Intelligence for the Gray Zone,” Center for Strategic and International Studies, December 7, 2021, p. 2.
110 Patrick Cronin et al., “No Safe Harbor: Countering Aggression in the East China Sea,” Center for a New American
Security, March 2018; Adam P. Liff, “China’s Maritime Gray Zone Operations in the East China Sea and Japan’s
Response,” China’s Maritime Gray Zone Operations (Annapolis, MD: Naval Institute Press, 2019).
111 Japan Ministry of National Defense, “Three Pillars of Japan’s Defense,” Defense of Japan 2020.
112 Speaking in Japan in April 2014, President Obama stated that “Article 5 covers all territories under Japan’s
administration, including the Senkaku Islands,” in what is believed to be the first time a U.S. President publically stated
the U.S. position. The White House, “Joint Press Conference with President Obama and Prime Minister Abe of Japan,”
Akasaka Palace, Tokyo, Japan, April 24, 2014.
113 For more information, see CRS Report R42761, The Senkakus (Diaoyu/Diaoyutai) Dispute: U.S. Treaty
Obligations, by Mark E. Manyin; and CRS Report R42930, Maritime Territorial Disputes in East Asia: Issues for
Congress, by Ben Dolven, Mark E. Manyin, and Shirley A. Kan.
114 According to the United Nations Convention on the Law of the Sea, coastal states are entitled to an “exclusive
economic zone” extending no further than 200 nautical miles in which it enjoys sovereign rights to explore and exploit
living and nonliving resources, among other things. U.N. Convention on the Law of the Sea, Part V: Exclusive
Economic Zone; Japan Ministry of Foreign Affairs, “Japan’s Legal Position on the Development of Natural in the East
China Sea,” August 6, 2015, https://www.mofa.go.jp/a_o/c_m1/page3e_000358.html.
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that has adopted a common platform of protecting freedom of navigation and promoting
democratic values in the region. Abe was an early champion of the Quad during his first stint at
prime minister from 2006 to 2007. The Biden Administration has adopted the initiative,
convening a virtual leader-level meeting in March 2021. At this summit the leaders announced a
promise to jointly expand availability of COVID-19 vaccines and deliver up to a billion doses to
Southeast Asia and the broader Indo-Pacific by the end of 2022.115 This step, along with a plan to
reduce dependence on China’s near-monopoly on rare earth materials used in high-technology
products and to work together to strengthen the Paris Agreement, could usher in a new chapter in
cooperation.
Japan hosted the second-ever in-person Quad summit in May 2022 at which the four countries,
among other steps, announced a new Indo-Pacific Partnership for Maritime Domain Awareness.
The White House says the partnership aims to offer “a near-real-time, integrated, and costeffective maritime domain awareness picture” that will “transform the ability of partners in the
Pacific Islands, Southeast Asia, and the Indian Ocean region to fully monitor the waters on their
shores.”116 Questions remain about the durability of the arrangement if leadership shifts in
member countries, whether other countries will be brought into the Quad’s initiatives, and
particularly about India’s inconsistent enthusiasm for the grouping. Many Members of Congress
have been enthusiastic about the Quad.117
Japan has also worked steadily to build closer bilateral security ties with both Australia and
India.118 For the past decade Japan has deepened defense relations with Australia, and in 2020 the
two agreed to a Reciprocal Access Agreement (similar to a Status of Forces Agreement) to define
rules and procedures when troops are stationed temporarily in the other’s country for joint
exercises or disaster-relief activities. As another U.S. treaty ally, Australia uses similar practices
and equipment, which may make cooperation with Japan more accessible. Japan has inked an
Acquisition and Cross-servicing Agreement (the formal mechanism that allows a country to
acquire or provide logistic support, supplies, and services directly from/to another country) with
India, along with agreements concerning the protection of classified military information and
transfer of defense equipment and technology. Bilateral exercises with both countries have grown
in number and sophistication.
Japan and the Korean Peninsula
Japan-South Korea Relations
In the 21st century, Japan’s relationship with South Korea has fluctuated between troubled and
tentatively cooperative, depending on external circumstances and the leaders in power. The state
of relations is framed by the legacy of history, with current events causing the spike in tension.
Many Koreans hold strong grievances about Japan’s colonial rule over the peninsula (19101945), especially on the issue of Korean “comfort women” who were forced to provide sex to
Japanese soldiers in the World War II era.119 Relations often became bitter with Abe in power,
driven by South Korean criticism of Abe’s past statements on the two countries’ contentious
history and his affiliations with nationalist organizations, as well by Japanese frustration that
115 “Quad Leaders’ Joint Statement: ‘The Spirit of the Quad,’” The White House, March 12, 2021.
116 The White House, “FACT SHEET: Quad Leaders’ Tokyo Summit 2022,” May 23, 2022.
117 See, for example, “US Lawmakers and Experts Support Historic QUAD Leadership Summit,” Economic Times,
March 20, 2021.
118 Rod McGuirk, “Japan, Australia Upgrade Security Pact Against China,” Associated Press, October 22, 2022.
119 “South Korea and Japan: Resolving the Comfort Women Issue,” The Diplomat, September 10, 2020.
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South Korean governments were abandoning previously negotiated agreements intended to
address bilateral conflicts.
In addition to the comfort women issue (see below), the perennial issues of how Japan’s behavior
before and during World War II is depicted in Japanese school textbooks, and a territorial dispute
between Japan and South Korea, continue to periodically rile relations. Seoul has expressed
disapproval of some of the history textbooks approved by Japan’s Ministry of Education, which
South Koreans claim diminish or whitewash Japan’s colonial-era atrocities. A group of small
islands in the Sea of Japan, known as Dokdo in Korean and Takeshima in Japanese (the U.S.
government refers to them as the Liancourt Rocks), are administered by South Korea but claimed
by Japan. Japanese assertions of their claim in defense documents or by local prefectures
routinely spark official criticism and public outcry in South Korea.
Currently, one of the most salient bilateral issue is whether the South Korean Supreme Court
decides to liquidate the seized assets of Japanese companies that the court in 2018 ruled must
compensate South Koreans for forced labor during Japan’s occupation. Japan argues that the 1965
Japan–South Korea normalization agreement resolved situations such as compensating forced
laborers. According to press reports, the Yoon administration has established a consultative body
to seek ways to avoid the liquidation of the seized Mitsubishi Heavy and Nippon Steel
Corporation assets and has reportedly offered a proposal that involves compensating the victims
through an existing South Korean government fund plus statements of regret and voluntary
contributions from the Japanese corporations. However, it is unclear whether Yoon, who is
confronting relatively low public approval ratings, can manage the anticipated negative response
from South Korea’s opposition parties, which have a majority in South Korea’s parliament.120
Bitter relations between Japan and South Korea dim prospects for effective trilateral cooperation
with the United States, particularly in responding to North Korean threats. This became clear in
2019 when South Korea—in the midst of a trade dispute with Japan—threatened to withdraw
from a bilateral military intelligence sharing agreement with Japan, spurring U.S. officials to
intervene and convince Seoul to remain in the pact.121 From its initial weeks in office, the Biden
Administration has sought to “reinvigorate and modernize” both alliances, and senior
Administration officials have expressed hope that this effort will include more trilateral
cooperation.122 Washington, including Congress through various resolutions, has generally
encouraged closer ties between Tokyo and Seoul as two of its most important alliance partners.
The two countries have shared security concerns; developed economies; and a commitment to
open markets, international rules and norms, and regional stability. A poor relationship between
Seoul and Tokyo jeopardizes U.S. interests by complicating trilateral cooperation on North Korea
policy and on responding to China’s rise. In 2021 and 2022, the three countries convened a
number of trilateral meetings ranging from the working level to the heads-of-state level. In a
further sign that relations were beginning to normalize, in the fall of 2022, Kishida and Yoon held
two bilateral meetings, the first such meetings since 2019.
120 “Japan Says South Korea Working to Solve Wartime Labor Compensation Row,” Kyodo News, August 26, 2022;
Sneider, “N Korea Tests Put Seoul and Tokyo on a Narrow Bridge.” The fund that would be used under the proposal is
the Foundation for Victims of Forced Mobilization by Imperial Japan. It was created in 2014 and among its
contributors is the Korean steel company POSCO, which received Japanese economic aid under the set of agreements
by which Japan and South Korea normalized relations in 1965.
121 “Scrapped Intelligence Pact Draws United States into Deepening South Korea-Japan Dispute,” Reuters, August 29,
2019.
122 “Interim National Security Strategic Guidance,” The White House, March 2021.
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Comfort Women Issue
A perennial stumbling block to better Japan–South Korean relations involves the “comfort
women,” a literal translation of the Japanese euphemism referring to women who were forced to
provide sexual services for Japanese soldiers during the imperial military’s conquest and
colonization of several Asian countries in the 1930s and 1940s. In 2015, then-Prime Minister Abe
and then-President Park Geun-hye of South Korea concluded an agreement that included Abe
issuing a new apology from a Japanese premier and the provision of 1 billion yen (about $8.3
million) from the Japanese government to a new Korean foundation that supports surviving
victims.123 The two governments’ foreign ministers agreed that this long-standing bilateral rift
would be “finally and irreversibly resolved” pending the Japanese government’s implementation
of the agreement.124 Although the main elements of the agreement appeared to have been
implemented in 2016, the deal remained deeply unpopular with the South Korean public, and
former President Moon Jae-in disbanded the foundation established by the agreement in 2018.125
The comfort women issue has had visibility in the United States due in part to Korean-American
activist groups. These groups have pressed successfully for the erection of monuments in
California and New Jersey commemorating the victims, passage of a resolution on the issue by
the New York State Senate, the naming of a city street in the New York City borough of Queens
in honor of the victims, and approval to erect a memorial to the comfort women in San Francisco.
In 2007, the U.S. House of Representatives passed H.Res. 121 (110th Congress), calling on the
Japanese government to “formally acknowledge, apologize, and accept historical responsibility in
… an unequivocal manner” for forcing young women into military prostitution. The resolution
passed by voice vote and attracted 167 co-sponsors, driven in part by a June 2007 Washington
Post advertisement signed by several Japanese legislators—some of whom Kishida included in
his August 2022 cabinet—and academics rejecting the historical basis of the resolution.126
Japan’s North Korea Policy
Japan has employed a hardline policy toward North Korea, including a virtual embargo on all
bilateral trade, and has been a vocal proponent of efforts by United Nations to punish Pyongyang
for its human rights abuses and military provocations. Japan is directly threatened by North Korea
given the demonstrated capability of Pyongyang’s medium-range missiles. In October 2022,
North Korea test-launched a long-range ballistic missile that flew over northern Japan, the first
test to fly over Japanese territory in five years. North Korea has long-standing animosity toward
Japan for its colonialism of the Korean peninsula in the early 20th century. When multilateral
diplomacy with North Korea was more active, one of the potential elements of a broad deal was a
Japanese assistance package in recognition of the suffering caused during this period—along the
lines of the aid Japan negotiated when it normalized relations with South Korea in 1965—that
could be worth several billions of dollars.127 North Korea may also target U.S. bases in Japan in
the event of a conflict.
123 In contrast to past apologies from Japanese prime ministers that were made in their personal capacities, then-Foreign
Minister Fumio Kishida stated that Abe’s apology was issued in his capacity “as Prime Minister of Japan.”
124 South Korean and Japanese Foreign Ministries’ translations of the December 28, 2015, joint announcement.
125 “6 Months Later: The ‘Comfort Women’ Agreement,” The Diplomat, May 11, 2016.
126 Asia Policy Point, Kishida 2nd Cabinet Insights, accessed December 14, 2022.
127 For examples of how this package might be calculated, see CRS Report RS20526, North Korea-Japan Relations:
The Normalization Talks and the Compensation/Reparations Issue, updated September 12, 2002, by Mark Manyin (out
of print; available to congressional clients upon request).
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In addition to direct security concerns, Japan has prioritized addressing the long-standing issue of
Japanese citizens kidnapped in the 1970s and 1980s by North Korean agents. In 2002, then-North
Korean leader Kim Jong-il admitted to the abductions and returned five survivors, claiming that
the others had perished from natural causes. Japan’s government officially identifies 17
individuals as abductees and says that relations can never be normalized without resolution of this
issue.128
Coordination between Japan and the United States on North Korean policy has fluctuated
depending on the approach taken by different U.S. leaders. In general, when the United States has
engaged North Korea with diplomacy, Japanese leaders have expressed concern that the abductee
issue does not receive sufficient attention. Under the Trump Administration, Tokyo supported
Trump’s initial “maximum pressure” approach. When Trump turned to personal diplomacy with
Kim Jong-un in 2018 and 2019, Japanese officials expressed concern that the United States would
make a deal on long-range missiles that left Japan vulnerable. According to many analysts, some
Japanese are unconvinced that North Korea will give up its nuclear weapons or missiles and fear
that Tokyo’s interests vis-à-vis Pyongyang will be marginalized if U.S.–North Korea relations
warm.129 When the Six-Party Talks (established to deal with North Korea’s nuclear weapons
program and that included Japan, South Korea, North Korea, China, Russia, and the United
States) were active, U.S. officials identified Japan a key actor in a possible resolution of problems
on the Korean peninsula, but the multilateral format has been dormant since 2009.
Relations with Southeast Asia
For decades, Japan has pursued productive relations with Southeast Asian countries, providing
generous official development assistance and earning broadly positive reviews from regional
leaders. In one 2020 survey, Southeast Asians rated Japan as the most trusted major power.130
With China’s rising influence, Tokyo has redoubled these efforts. Japanese officials frequently
visit the region, and the government has launched several initiatives that emphasize capacitybuilding in the security sphere. Japan’s approach generally complements U.S. policy toward
Southeast Asian countries, with both the United States and Japan pursuing strong relations with
Vietnam and the Philippines in particular. Japan has developed stronger relations with countries
such as Cambodia and Burma, in contrast to the United States, which has placed sanctions and
restrictions on interactions with their authoritarian regimes. Some scholars argue that by utilizing
their respective comparative advantages, the United States and Japan can coordinate for a
broader, more strategic joint approach to Southeast Asia.131 Under the Biden and Trump
Administrations, the United States and Japan have launched a number of initiatives to cooperate
on infrastructure projects, including many involving significant public-private partnerships, in
Southeast Asia.132
128 Japan Ministry of Foreign Affairs, “Abductions of Japanese Citizens by North Korea,” https://www.mofa.go.jp/
region/asia-paci/n_korea/abduction/index.html.
129 Robert King, “Japan and North Korea: Summitry, Missile Fears, and Abductions,” Center for Strategic and
International Affairs, June 19, 2019.
130 The State of Southeast Asia, 2020 Survey Report, ASEAN Studies Centre, https://www.iseas.edu.sg/images/pdf/
TheStateofSEASurveyReport_2020.pdf.
131 See, for example, Kei Koga, “Recalibrating U.S.-Japan Indo-Pacific Strategies Toward ASEAN,” Wilson Center,
October 2022.
132 See, for instance, The White House, “United States-Australia-Japan Joint Statement on Cooperation on
Telecommunications Financing,” October 15, 2022.
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Economic Issues
U.S. trade and economic ties with Japan are assessed by many experts and policymakers as highly
important to the U.S. national interest. By the most conventional method of measurement, the
United States and Japan are the world’s largest and third-largest economies (China is number
two), accounting for about 30% of the world’s GDP in 2021.133 Furthermore, their economies are
closely intertwined by two-way trade in goods and services and by investment in each other’s
economies.
Overview of the Bilateral Economic Relationship
Japan was the United States’ fifth-largest export market for goods and services (behind Canada,
Mexico, China, and the United Kingdom) and the fifth-largest source of U.S. imports (behind
China, Mexico, Canada, and Germany) in 2021. Japan accounted for 4% of total U.S. exports in
2021 ($112 billion) and 5% of total U.S. imports ($168 billion).134 The United States was Japan’s
second-largest goods export market and second-largest source of goods imports (after China) in
2021.135 Japan is also a major investor in the United States, accounting for more than 14% of the
stock of inward foreign direct investment in 2021 ($690 billion).136 U.S. affiliates of Japanese
multinational firms employed about 1 million U.S. workers in 2020 (latest available data).
The relative significance of the bilateral economic relationship for the United States has arguably
declined as other countries, including China, have become increasingly important global
economic actors.137 Some of this shift stems from structural changes in the global economic
landscape, including the growth of global supply chains. Data from the Organization for
Economic Cooperation and Development (OECD) suggest that even on a value-added basis,
which adjusts conventional trade data by attributing intermediate components of traded products
to their country of origin, Japan accounts for a declining share of U.S. import activity.138 At the
same time, U.S. import figures may underestimate the importance of Japan and Japanese
companies in U.S. consumption patterns since Japanese firms have invested heavily in exportoriented production facilities in Asia and around the world as well as directly in the United States.
U.S. trade with Japan has largely risen over the past few decades. Major economic events have
also influenced U.S.-Japan trade patterns in recent years, such as the global economic downturn
stemming from the 2008 financial crisis and the COVID-19 pandemic, which dampened both
U.S. exports and imports. The decline in the value of the Japanese yen since 2012—which hit
historic lows in 2022 and is tied to aggressive monetary stimulus in Japan as part of “Abenomics”
(described below)—likely affected both the value and quantity of trade as measured in yen.
133 Based on GDP (current US$) from World Bank, World Development Indicators.
134 For an overview of key figures in the economic relationship, see the Bureau of Economic Analysis’ country fact
sheet on Japan at https://apps.bea.gov/international/factsheet/.
135 Data from Japan Ministry of Finance, accessed through Trade Data Monitor on 10/03/2022.
136 U.S. Bureau of Economic Analysis, Balance of Payments and Direct Investment Position Data, https://apps.bea.gov/
iTable/index_MNC.cfm (accessed October 3, 2022).
137 Over the past decade, U.S. goods exports to the world grew by 18%, while exports to Japan grew by 12%. U.S.
goods imports from the world grew by 27%, while U.S. imports from Japan grew by 3%.
138 From 2005 to 2015 (the most recent trade in value added statistics available) U.S. imports from Japan on a valueadded basis declined from $172 billion to $149 billion, or from 9% to 6% of U.S. global value-added imports. During
the same period China’s share of U.S. imports on a value-added basis rose from 9% to 19%. OECD Trade in Value
Added Database (TiVA) at https://www.oecd.org/sti/ind/measuring-trade-in-value-added.htm.
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The Trump Administration’s trade policy largely focused on challenging “unfair” trading
practices, boosting U.S. import competition, and reducing bilateral trade deficits and strained U.S.
economic relations with Japan and other countries. U.S. and Japanese officials addressed some of
these concerns in limited trade agreements reached in 2019 (see below). The Biden
Administration emphasizes that while opening markets and reducing trade barriers remains
fundamental to its trade agenda, repairing U.S. partnerships and alliances is a major priority.139
Key issues in the bilateral trade relationship of ongoing U.S. attention and of priority for some
Members of Congress include concerns over market access for U.S. products such as autos and
agricultural goods and various nontariff barriers, which U.S. companies argue favor domestic
Japanese products.140 The United States has also prioritized renewed regional economic
engagement with its launch of the IPEF with Japan and 12 other trading partners. Japan has
welcomed U.S. engagement and analysts see it as a key partner for IPEF (see below). The
Japanese government, in addition to major auto producers the EU and South Korea, has recently
raised concerns over new requirements for electric vehicle (EV) tax credits in P.L. 117-169
(commonly referred to as the Inflation Reduction Act of 2022) and potential discriminatory
effects, which some observers see as potentially injecting some tension in the IPEF talks.141
Despite some renewed trade tensions, the major trend in U.S.-Japan bilateral economic relations
over the past two decades has largely been easing tension, in particular compared to the
contentious and frequent trade frictions at the fore of the bilateral relationship in the 1980s and
early 1990s. By contrast, increasing tension in the U.S.-China economic relationship, particularly
threats of decoupling, presents significant risks to Japan given its extensive economic ties with
both countries.
Japan’s Domestic Economy: Seeking Growth amid Challenges
In their first ever “Economic 2+2” meeting held in July 2022, U.S. and Japanese officials
emphasized the need to make their economies more competitive and resilient amid various risks
and uncertainties in the global economy.142 Prime Minister Kishida inherited a challenging
domestic economic landscape in the wake of COVID-19 and, more broadly, in building on the
legacy of Abe’s economic policies. Japan’s economy grew rapidly from the end of World War II
through the 1980s. However, since the collapse of an asset bubble in the early 1990s, the Japanese
government has struggled to end persistent deflation (decreasing prices) and weak economic
139 USTR, The 2021 Trade Policy Agenda and 2020 Annual Report, March 2021.
140 For more on Japanese trade barriers, see USTR, 2022 National Trade Estimate Report on Foreign Trade Barriers,
March 2022, pp. 287-304. For congressional views, see U.S. Congress, House Ways and Means Subcommittee on
Trade, U.S.-Japan Trade Agreements hearing, 116th Cong., 2nd sess., November 20, 2019.
141 These requirements include, namely, restrictions on the countries from which automakers can source critical
minerals/components and in which they can assemble EVs in order to qualify for the credits. As the Japanese
government commented, “However, the requirements of the EV tax credit, conditioning that the extraction, processing,
manufacture, or assembly of critical minerals or battery components should be done in North America or countries with
which the U.S. has a free trade agreement in effect, are not consistent with the U.S. and Japanese governments’ shared
policy to work with allies and like-minded partners to build resilient supply chains, and they in fact preclude Japanese
businesses from enjoying the benefit.” See Comments by the Government of Japan, Response to Internal Revenue
Service Request for Comments on Credits for Clean Vehicles (Notice 2022-26), November 4, 2022, available at
https://www.regulations.gov/comment/IRS-2022-0020-0689. Also see “Sources: Electric Vehicle Tax Credit Dispute
Could Affect IPEF Talks,” Inside U.S. Trade, November 9, 2022; and Satsuki Kaneko, “Japan Raises Concern over
U.S. Eligibility Rules on EV Subsidies,” Nikkei Asia, September 9, 2022. For more information on the IRA provisions,
see CRS Insight IN11996, Clean Vehicle Tax Credits in the Inflation Reduction Act of 2022, by Molly F. Sherlock.
142 U.S. Department of State, “Joint Statement of the U.S.-Japan Economic Policy Consultative Committee:
Strengthening Economic Security and the Rules-Based Order,” July 29, 2022.
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growth. For the past three decades Japan’s GDP growth has been below most advanced
economies, including the United States (see Figure 3).143
Figure 3. GDP Growth: Japan and United States
(10-Year Average of Annual % Change)
Source: World Economic Outlook database, October 2020.
Brief periods of recovery have continually been followed by devastating economic events,
including the Asian financial crisis in the late 1990s; the global financial crisis in the late 2000s;
and the earthquake, tsunami, and nuclear reactor meltdown in northeastern Japan in 2011. (For
more on Japan’s “triple disaster,” see the “Nuclear Energy” section below.)
Most recently, the global recession caused by the COVID-19 pandemic has been acutely felt in
Japan. International tourism, for example, had been a targeted growth sector in recent years
before the pandemic effectively halted such activities in 2020, including tourism related to the
Tokyo Olympics. Japan’s economy contracted by 4.5% in 2020 and grew 1.7% in 2021—a
relatively low rebound compared to other advanced economies.144 The economy underperformed
relative to expectations and contracted in the third quarter of 2022, raising further concerns over
sustained recovery.145 As such, the government remains focused on economic recovery from the
pandemic, with continued fiscal and monetary support.146 In October 2022, Kishida announced a
new package of economic measures worth ¥39 trillion ($264 billion), building on past stimulus
for economic relief from rising food and energy prices.147 The BoJ, unlike other central banks,
remains committed to loose monetary policy, taking actions to prevent interest rate increases.148
Japan’s ultra-low interest rates—the BoJ’s policy rate is set at minus 0.1%—have in turn put
downward pressure on the yen, which fell to historic lows against the dollar in the fall of 2022,
143 Due to Japan’s shrinking population, on a per capita basis, its economic growth looks more robust when compared
to countries with growing populations such as the United States.
144 IMF, World Economic Outlook Update, July 2022.
145 Erica Yokoyama and Yoshiaki Nohara, “Japan’s Economic Recovery Slammed Back into Reverse by Weak Yen,”
Bloomberg, November 14, 2022.
146 Eri Sugiara and Leo Lewis, “Japan’s Economy Expands 5.4% in Fourth Quarter after Covid Curbs Eased,”
Financial Times, February 15, 2022.
147 “Japan Enacts $21bn Extra Budget to Tackle Surging Prices,” Nikkei Asia, May 31, 2022; Daniel Leussink and
Kantaro Komiya, “Japan Planning New Economic Package in October After Near-Term Help,” Reuters, September 8,
2022.
148 Roula Khalaf et al., “Fumio Kishida Backs Bank of Japan’s Ultra-Loose Policy Despite Yen Plunge,” Financial
Times, October 11, 2022.
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prompting BoJ intervention for the first time since 1998. Japanese officials have historically
lauded a weak yen, which makes Japan’s exports cheaper and imports more expensive and
supports the Kishida government’s aim to boost tourism spending, but the weaker yen’s effect on
import costs is of increasing concern given soaring costs of imported energy and other
commodities.149
In addition to the effects of the pandemic, Japan faces a number of ongoing, long-term structural
economic challenges. Primary among these is a rapidly aging and shrinking population, which
among other difficulties places increasing strain on a heavily indebted government, as the
working age population declines relative to retirees.150 At 259% of GDP in 2020, the size of
Japan’s federal government’s gross debt relative to its economy was already the largest in the
world before it implemented massive fiscal stimulus in response to COVID-19.151 Attempting to
put Japan on a path of long-term fiscal sustainability without disrupting the economy in the shortterm has proven a difficult balancing act. Consumption tax increases in 2014 and in 2019 pushed
down domestic consumption, resulting in sizeable quarterly economic contractions. As a result,
Japan’s economy was already in the midst of contraction when the COVID-19 shutdowns took
effect.
Faced with a declining working-age population and an aversion to immigration, Japan’s future
economic growth depends on increasing labor productivity (the output of each individual
worker), which has grown slowly for the past several decades and declined relative to other major
economies.152 Although the causes of this decline are debated, many economists see Japan’s rigid
and bifurcated labor market as a significant impediment to improving productivity. The rigidity in
the system stems from the traditional Japanese employment model, a result of both cultural and
legal structures in which “salaryman” workers accept a grueling work schedule in exchange for
the benefit of long-term job security with pay strongly linked to seniority.153 Some experts have
argued that this “job-for-life” system potentially dampens productivity by lowering the incentive
to learn new skills during the course of a career and by impeding the dissemination of innovations
and best practices that would normally occur when workers change from one employer to
another.154 Businesses have made the employment system more flexible by expanding the group
of nonregular or temporary employees who garner less competitive salaries and face easier
dismissal than their salaryman counterparts. Since the 1980s, the share of nonregular workers in
the workforce has grown from 15% to nearly 40%, with women accounting for the bulk of the
growth.155 Instead of improving productivity, many analysts see this dual system as having
exacerbated the problem while adding to concerns over gender inequality.156 The Japanese
government has attempted to reform the system, including through legal measures to ensure that
149 “Japan’s Monetary Policymakers Are Sticking to Their Guns,” The Economist, September 29, 2022.
150 At 49% in 2021, Japan’s dependency ratio, the share of retirees to workers, is nearly twice that of the United States.
World Bank, World Development Indicators, https://data.worldbank.org/indicator/SP.POP.DPND.OL, accessed
October 17, 2022.
151 IMF, World Economic Outlook Database, April 2022, https://www.imf.org/en/Publications/WEO/weo-database/
2022/April/weo-report.
152 Martin Neil Baily, Barry Bosworth, and Siddhi Doshi, Productivity Comparisons: Lessons from Japan, the United
States, and Germany, Brookings Institution, January 2020.
153 Randall S. Jones and Haruki Seitani, Labour Market Reform in Japan to Cope with a Shrinking and Ageing
Population, OECD Economics Department Working Papers No. 1568, September 16, 2019.
154 McKinsey Global Institute, The Future of Japan; Reigniting Productivity and Growth, March 2015.
155 Andrew Gordon, “New and Enduring Dual Structures of Employment in Japan: The Rise of Non-Regular Labor,
1980s-2010s,” Social Science Japan Journal, vol. 20, no. 1 (February 10, 2017), pp. 9-36.
156 Ibid.
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nonregular workers receive “equal pay for equal work,” but enforcing such provisions has proven
a challenge.157 A related challenge, which may also help explain Japan’s sluggish wage growth
despite its tight labor market, is the disparity in productivity between firms, which is among the
highest in the OECD.158
Former Prime Minister Abe attempted to tackle a number of these domestic challenges through a
three-pronged economics program known as “Abenomics.” The program’s three components or
“arrows” consisted of expansionary monetary policy, flexible fiscal stimulus, and structural
reforms. The BoJ has deployed unprecedented levels of monetary stimulus, including quantitative
easing through massive purchases of government bonds and the use of negative interest rates to
encourage lending. Government spending under Abe was also largely stimulative, but some
observers argue that consumption tax increases in 2014 and 2019 put unnecessary strain on a still
weak economy.159 The Abe government also made some progress on structural reforms, including
in the energy and agriculture sectors and in corporate governance, and sought to spur productivity
by opening the Japanese marketplace to greater international competition, lowering tariff and
nontariff barriers through a series of trade agreements. Another key component focused on
“womenomics,” or boosting economic growth through policies to encourage the participation and
advancement of women in the workforce (see text box).160
157 Makiko Inoue and Ben Dooley, “A Job for Life, or Not? A Class Divide Deepens in Japan,” New York Times,
November 27, 2020.
158 OECD, Insights on Productivity and Business Dynamics: Japan, March 2020.
159 Mike Bird, “Japan’s Third Sales-Tax Blunder Must be Its Final Mistake,” Wall Street Journal, February 17, 2020.
160 See CRS Report R43668, “Womenomics” in Japan: In Brief, by Emma Chanlett-Avery and Rebecca M. Nelson.
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Mixed Success of “Womenomics”
A key component of the third arrow in Abe’s economic reform focused on “womenomics,” or boosting economic
growth through reforms and policies to encourage the participation and advancement of women in the
workforce.161 Japan lags behind many other high-income countries in gender equality and continues to underutilize
the potential of its female labor force. Women were also disproportionately affected by employment cuts in
response to the pandemic, as they are highly over-represented among Japan’s nonregular workers.162 To advance
“womenomics,” the government has proposed or implemented a number of policies, such as expanding the
availability of day care. Japan’s overall female participation rate in the labor force increased from 48% in 2012 to
53% in 2021.163
Despite some progress, a dearth of women in top management and government positions has left many
disappointed in the results.164 Japan’s position in the World Economic Forum’s national rankings of gender equality
remains low—116th out of 146 countries in 2022.165 Japan fared worse in political empowerment rankings (139 th),
reflecting the relatively low number of female legislators and high-ranking government officials. According to the
OECD, in 2021 women occupied 12.6% of board seats across major Japanese companies, compared to 29.7% in
the United States.166 Japan’s pay differential or gender wage gap at 22.1% was the third-highest in the OECD in
2021, which researchers attribute largely to lack of female leadership in the workplace.167 In May 2022, Prime
Minister Kishida announced plans to require large companies to disclose their gender wage gaps as part of efforts
to improve transparency and address disparities.168
Overall, the program appears to have had moderate success, primarily by halting deflation. Price
levels exceeded their previous 1998 peak for the first time in recent years (see Figure 4).169 In
addition, during Abe’s tenure the labor force participation rate increased as additional workers,
especially women, joined the labor force, despite a declining working age population (see Figure
5). In 2019, the unemployment rate fell to 2.4%, its lowest levels in more than 25 years, and
increased slightly to 2.8% since the pandemic.170 Some analysts also credit the program with
injecting optimism into Japan’s economy after its decades-long period of sluggish economic
growth coupled with its demographic challenges had given rise to a narrative of Japan as a nation
in decline.171
161 See CRS Report R43668, “Womenomics” in Japan: In Brief, by Emma Chanlett-Avery and Rebecca M. Nelson.
162 Japan’s labor survey found that 54% of women are employed as nonregular workers compared to 22% of men in
2021. Mari Ishibashi and Rei Nakafuji, “Women Bear Brunt of Japan’s Pandemic Job Losses,” Nikkei Asia, September
7, 2020. Statistics Bureau of Japan, Labor Force Survey, “2021 Yearly Average Results,” February 1, 2022,
https://www.stat.go.jp/english/data/roudou/results/annual/ft/index.html.
163 World Bank, World Development Indicators, https://data.worldbank.org/indicator/SL.TLF.CACT.FE.ZS.
164 Motoko Rich and Hisako Ueno, “Shinzo Abe Vowed Japan Would Help Women ‘Shine.’ They're Still Waiting,”
New York Times, September 13, 2020.
165 World Economic Forum, The Global Gender Gap Report 2022, July 13, 2022.
166 Eiki Hayashi and Kohei Yamada, “Japan Falls Behind on women in Boardrooms as Europe Makes Strides,” Nikkei
Asia, June 9, 2022.
167 OECD, OECD Data, https://data.oecd.org/earnwage/gender-wage-gap.htm; Kazuo Yamaguchi, “Japan’s Gender
Gap,” Finance and Development, March 2019.
168 Takashi Tsuji, “Japan to Make Big Companies Report Gender Pay Gaps,” Nikkei Asia, May 20, 2022.
169 Price level data from IMF, World Economic Outlook Database, October 2020.
170 Unemployment rate data from World Bank, World Development Indicators, https://data.worldbank.org/indicator/
SL.UEM.TOTL.ZS?locations=JP.
171 See, for example, “Abe Shinzo Has Left an Impressive Legacy,” Economist, September 3, 2020.
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Figure 4. Consumer Price Index: Japan
(index, 2010 = 100)
Source: International Monetary Fund,
International Financial Statistics.
Notes: Cost to the average consumer of acquiring
a basket of goods and services with index year set
to 2010.
Figure 5. Labor Force Participation
Rate: Japan
Source: World Bank, World Development
Indicators.
Notes: Annual percentage of population above
age 15 in the labor force.
Many analysts agree, however, that further structural reforms remain vital for Japan to maintain
its standard of living in the face of persistent demographic challenges.172 To mitigate these
challenges and enhance economic growth, the International Monetary Fund, for example, has
recommended prioritizing (1) labor market reforms aimed at increasing participation among
women, older workers, and foreigners, and reducing distortive effects of Japan’s two-tier labor
market system by providing more training for nonregular workers; (2) reforms to increase longterm productivity growth (such as deregulation aimed at facilitating expansion of higher
productivity small- and medium-sized enterprises and exit of poor-performing firms); and (3)
continued reduction of tariff and nontariff barriers.173 The COVID-19 pandemic in particular has
further highlighted the structural inequities in the Japanese labor market: Women, young, and
nonregular workers who remain overrepresented in vulnerable industries were hit particularly
hard.174
Prime Minister Kishida has pledged to correct for the perceived shortcomings of Abenomics with
a focus on a “new form of capitalism” aimed toward reducing social disparities and driving
broad-based growth in the economy.175 His plan calls for more investment in human capital and
expanded support of innovation and startups, as well as efforts to decarbonize the economy and
advance digitalization. While the response to the economic fallout from the COVID-19 pandemic
remains at the forefront, Kishida has emphasized economic priorities including supply chain
172 The IMF, for example, estimates that Japan could offset up to 60% of the expected slowdown in its GDP growth
resulting from its aging and shrinking population by continuing and deepening structural reforms. IMF, Japan: 2019
Article IV Consultation Staff Report, February 2020, p. 36.
173 Ibid.
174 Shinya Kotera and Jocen M. Schmittmann, The Japanese Labor Market During the COVID-19 Pandemic, IMF,
May 2022.
175 Kana Inagaki and Leo Lewis, “Fumio Kishida Pledges to Steer Japan Away from Abenomics,” Financial Times,
October 14, 2021; Yuko Takeo, “Japan’s Kishida Seeks Fresh Growth via ‘New Capitalism’ Plan,” Bloomberg, May
31, 2022.
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security (for which he created a new ministerial economic security post), improvements in the use
of digital technologies, and green growth.176
U.S. Tariffs Modified Under the Biden Administration
Unilateral tariff increases on several significant U.S. imports from Japan imposed during the
Trump Administration remain in place under the Biden Administration with some
modifications.177 In 2018, President Trump announced tariffs of 25% and 10% on certain U.S.
steel and aluminum imports, respectively.178 The tariffs, imposed under Section 232 of the Trade
Expansion Act of 1962 on the premise that such imports threaten U.S. national security, drew
criticism from Japan (the fifth-largest supplier of affected U.S. steel imports in 2020) given its
close security relationship with the United States. Japan did not retaliate against the tariff actions,
in contrast to other trading partners including the EU and China. Japan, however, appeared to be a
relatively significant beneficiary of the Department of Commerce’s product exclusion process,
which allowed U.S. importers to petition the government for tariff relief on individual products
from specific countries.179 Bilateral tensions heightened further when President Trump also
declared auto imports, including from Japan, a national security threat, but the U.S. government
ultimately refrained from imposing additional tariffs.180
The Biden Administration has expressed preference for multilateral solutions to the economic
issues the Trump Administration sought to address through its tariff actions, including
overcapacity in the global steel market, while acknowledging that tariffs are a legitimate and at
times necessary U.S. trade policy tool.181 In February 2022, the Biden Administration reached an
agreement with Japan to partly lift the Section 232 tariffs through a tariff-rate quota, which
exempts up to 1.25 million metric tons of Japanese steel annually from the 25% tariff.182
Japanese exports of washing machines and solar panels were also subject to additional temporary
U.S. safeguard tariffs imposed under Section 201 of the Trade Act of 1974 to address serious or
threatened serious injury from these imports to domestic industries. U.S. safeguards on large
washers are currently in effect through 2023. In February 2022, President Biden extended the
safeguard tariffs on solar products, with some product exclusions, for four years until 2026.183
176 Japan Cabinet Secretariat, “Policy Speech by Prime Minister Kishida Fumio to the 205 th Session of the Diet,”
October 8, 2021.
177 CRS Report R45529, Trump Administration Tariff Actions: Frequently Asked Questions, coordinated by Brock R.
Williams.
178 CRS Report R45249, Section 232 Investigations: Overview and Issues for Congress, coordinated by Rachel F. Fefer
and Vivian C. Jones.
179 According to analysis by the Mercatus Center, in 2019, more petitions for exemptions on imports from Japan were
filed and approved than for any other country. Mercatus Center, Investigating Product Exclusion Requests for Section
232 Tariffs: An Update, August 21, 2019, https://www.mercatus.org/investigating-section-232-an-update.
180 Trump White House, “Adjusting Imports of Automobiles and Automobile Parts into the United States,” May 17,
2019, https://trumpwhitehouse.archives.gov/presidential-actions/adjusting-imports-automobiles-automobile-partsunited-states/. President Trump directed USTR to seek a negotiated solution with Japan and appeared to use the threat
of potential tariffs as leverage in broader trade talks with Japan, which concluded in 2019.
181 U.S. Congress, Senate Finance Committee, Hearing to Consider the Nomination of Katherine C. Tai to be United
States Trade Representative, with the rank of Ambassador Extraordinary and Plenipotentiary: Questions for the Record
(“Nomination Hearing”), 117th Cong., 1st sess., February 25, 2021.
182 Department of Commerce, “Raimondo, Tai Statements on 232 Tariff Agreement with Japan,” press release,
February 7, 2022.
183 The White House, “A Proclamation to Continue Facilitating Positive Adjustment to Competition from Imports of
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U.S.-Japan Trade Negotiations
After facing potential Section 232 auto tariffs, Japan agreed to enter into negotiations with the
United States on a bilateral trade agreement. In October 2019, the United States and Japan signed
two agreements: the U.S.-Japan Trade Agreement (USJTA), which provides for limited tariff
reductions and quota expansions to improve market access, and the U.S.-Japan Digital Trade
Agreement. The agreements, which took effect in January 2020, without formal action by
Congress, constituted what the Trump and Abe Administrations described as “stage one” of a
broader U.S.-Japan trade agreement, but further talks did not materialize.
The USJTA commitments cover about 5% of bilateral trade. Under its provisions, the United
States is reducing tariffs on mostly industrial goods and certain Japanese niche agricultural
products. Japan is reducing or eliminating tariffs on about 600 agricultural tariff lines, such as
beef, pork, and cheese, and expanding preferential tariff-rate quotas (which permit access for a
specified quantity at a specified tariff rate). Opening Japan’s highly protected agriculture sector
(the fourth-largest U.S. agriculture market in 2021) and reaching parity with exporters from
Japan’s FTA partners were key drivers of the agreement for the United States.184 The USJTA does
not cover trade in motor vehicles, a driver of the U.S. bilateral trade deficit and long-standing
area of bilateral tension.185 The agreement on digital trade, an area in which the two countries
have broadly similar goals, largely reflects the digital trade rules in the 2020 U.S.-Mexico-Canada
Agreement.
The limited scope agreement was a significant shift in approach from recent U.S. FTAs, which
typically involve one comprehensive negotiation. The Trump Administration used delegated tariff
authorities in Trade Promotion Authority (TPA) to proclaim the tariff provisions, while treating
the digital trade agreement, which did not require changes to U.S. law, as an Executive
Agreement.186 Some Members of Congress and U.S. stakeholders raised questions regarding the
congressional role in approving trade agreements and urged second-stage talks to achieve a
comprehensive deal.187 Expeditious reduction of Japan’s agricultural tariffs, however, was widely
supported in Congress and by some U.S. agriculture stakeholders given growing concerns that
Japan’s other trade agreements disadvantage U.S. exports.188 At the same time, many industries
expressed concerns about the extent of USJTA’s new market access or lack of attention to other
key issues typically covered in comprehensive FTAs.
Certain Crystalline Silicon Photovoltaic Cells (Whether or Not Partially or Fully Assembled into Other Products),”
February 4, 2022.
184 Responses for Questions for the Record for Ambassador Robert Lighthizer, in U.S. Congress, Senate Committee on
Finance, The President’s 2019 Trade Policy Agenda and the United States-Mexico-Canada Agreement, hearings, 116th
Cong., 2nd sess., June 18, 2019, p. 25, https://www.finance.senate.gov/hearings/the-presidents-2019-trade-policyagenda-and-the-united-states-mexico-canada-agreement.
185 The Administration declined to take action on Section 232 tariffs on Japanese auto imports, which some analysts
link to Japan’s concessions in the USJTA, although the agreement itself is silent on the issue. See “Joint Statement of
the United States and Japan,” September 26, 2018, https://www.mofa.go.jp/mofaj/files/000405449.pdf.
186 TPA provides for the expedited consideration of trade agreement implementing legislation if the agreement makes
progress toward achieving negotiating objectives and the Administration adheres to certain notification and
consultation requirements. For more information, see CRS In Focus IF10038, Trade Promotion Authority (TPA), by
Cathleen D. Cimino-Isaacs and Christopher A. Casey.
187 U.S. Congress, House Ways and Means Subcommittee on Trade, U.S.-Japan Trade Agreements, hearings, 116th
Cong., 2nd sess., November 20, 2019.
188 “U.S. Business Groups Laud Initial U.S.-Japan Deal, Press for More Talks,” Inside U.S. Trade, September 26, 2019.
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Japan has continued to enter trade agreements with its other trading partners. Following U.S.
withdrawal from the TPP in 2017, Japan led efforts among the remaining 11 countries to conclude
the CPTPP, which took effect in December 2018 for Japan. Japan’s FTA with the EU, which went
into effect soon after in 2019, is to eventually remove nearly all tariffs, including for example the
EU’s 10% auto tariff.189 In addition, in early 2022, the Regional Comprehensive Economic
Partnership entered into force and will lower trade barriers among Japan and 14 other Asian
members, including China.190 Some experts and Members of Congress see the advancement of
mega-regional trade deals without U.S. participation as limiting U.S. economic and strategic
influence in the Asia-Pacific. Other stakeholders and Members have supported the United States
not participating in agreements such as the CPTPP.191 Those concerned over limited U.S.
influence contend, moreover, that following TPP withdrawal, the United States failed to present
an alternative economic strategy in the region.192 While Japan continued to urge the United States
to consider joining the CPTPP, the Biden Administration has currently expressed no such interest.
In May 2022, Japan joined 13 other countries as an inaugural negotiating partner in the U.S.-led
IPEF initiative. IPEF appears to be the Administration’s response to urging from policymakers,
stakeholders, and U.S. allies such as Japan for the United States to advance a more robust trade
agenda in the region.193 IPEF will not take the form of a traditional comprehensive U.S. FTA and
instead involves commitments in four separate “pillars” covering (1) select trade issues (e.g.,
labor, environment, digital trade, trade facilitation); (2) supply chains; (3) infrastructure and
decarbonization; and (4) tax and anti-corruption. IPEF members held their first in-person
ministerial meeting in September 2022.194 The Biden Administration has said it sees the potential
agreement as attracting a broad base of U.S. domestic support, which it argues was missing from
the TPP.195 Unlike U.S. FTAs, IPEF will not cover tariffs and comprehensive market access
provisions. The Administration has also suggested that IPEF is to take the form of executive
agreements, which has prompted concern among some Members who say that the Administration
is potentially circumventing “congressional input, authority, and approval.”196 In December 2022,
a group of Members of the Senate Finance Committee asserted that Congress must have a role in
approving any future IPEF agreement as it aims to regulate foreign commerce and reshape
international trade flows.197 Some Members of Congress and stakeholders support IPEF as an
189 CRS In Focus IF11099, EU-Japan FTA: Implications for U.S. Trade Policy, by Cathleen D. Cimino-Isaacs.
190 CRS In Focus IF11891, Regional Comprehensive Economic Partnership (RCEP), coordinated by Cathleen D.
Cimino-Isaacs.
191 See U.S. Congress, House Committee on Ways and Means, Biden Administration’s 2022 Trade Policy Agenda,
hearing, 117th Cong., 2nd sess., March 30, 2022; and U.S. Congress, Senate Committee on Finance, The President’s
2022 Trade Policy Agenda, hearing, 117th Cong., 2nd sess., March 31, 2022; Keigh Johnson, “While Trump Builds
Tariff Walls, Asia Bets on Free Trade,” Foreign Policy, November 1, 2019; Peter A. Petri and Michael G. Plummer,
“RCEP: A New Trade Agreement That Will Shape Global Economics and Politics,” Brookings Order From Chaos
blog, November 16, 2020.
192 See, for example, Daniel W. Drezner, “The Policy Gap in the Indo-Pacific,” Washington Post, January 12, 2022.
193 See, for example, Joshua P. Meltzer, “The High Stakes Indo-Pacific Economic Framework,” East Asia Forum, April
9, 2022.
194 USTR, “United States and Indo-Pacific Economic Framework Partners Announce Negotiation Objectives,” press
release, September 9, 2022.
195 White House, “On-the-Record Press Call on the Launch of the Indo-Pacific Economic Framework,” May 23, 2022.
196 Letter from Rosa DeLauro, Member of Congress, et al. to Katherine Tai, United States Trade Representative; Gina
Raimondo, Secretary of Commerce; Antony Blinken, Secretary of State; and Jake Sullivan, National Security Advisor,
August 1, 2022.
197 Letter from Sen. Ron Wyden, Chairman, Senate Committee on Finance, et al. to President Biden, December 1,
2022.
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opportunity for the United States to take a lead role in establishing updated trade and economic
rules in partnership with key partners in the region. At the same time, some observers have raised
concerns over IPEF’s potential lack of substantive commitments, including in market access, and
overall ambition to deepen economic linkages.198 Japan and IPEF partner countries have generally
welcomed U.S. engagement via the framework but also voiced various concerns and hopes for the
agreement.199
The Biden Administration is concurrently pursuing other bilateral initiatives and economic
engagement with Japan. It announced a new Competitiveness and Resilience (CoRe) Partnership
with Japan during the April 2021 bilateral summit, which is to focus on cooperation in
technological innovation.200 The Administration also launched a cooperative U.S.-Japan
Partnership on Trade to advance collaboration and engagement on common areas of interest and
address specific trade issues.201 The Administration has emphasized the importance of working
with allies such as Japan to meet the challenges posed by China. The United States, European
Union, and Japan recently renewed trilateral talks, which had been held intermittently since 2018,
“to address the global challenges posed by non-market policies and practices of third countries
that undermine and negatively affect our workers and businesses.”202
Energy and Climate Issues
Unlike security cooperation, which has reflected continuity across recent U.S. and Japanese
governments, U.S.-Japan cooperation on energy, climate, and other environmental issues has been
more prone to changing priorities by U.S. and Japanese political leaders.
Energy
Enhancing energy security is a high priority for Japan’s policymakers. The country’s archipelagic
geography and vulnerability to natural disasters, limited domestic energy sources, and underconnected energy transmission infrastructure make it vulnerable to energy supply and
transmission disruptions. Japan’s reliance on imported oil and natural gas for more than 90% of
its energy needs has led policymakers to seek to diversify the country’s energy sources.203
198 See U.S. Congress, House Committee on Ways and Means, Biden Administration’s 2022 Trade Policy Agenda,
hearing, 117th Cong., 2nd sess., March 30, 2022; and U.S. Congress, Senate Committee on Finance, The President’s
2022 Trade Policy Agenda, hearing, 117th Cong., 2nd sess., March 31, 2022. Also Robert Atkinson, “Biden’s IndoPacific Framework Is a Paradigm Shift,” Foreign Policy, July 1, 2022; Wendy Cutler and Daniel M. Price, The Debate
Papers: Is the IPEF Glass Half Full or Glass Half Empty, United States Studies Centre, August 2022; Inu Manak,
“Unpacking the IPEF: Biden’s First Big Trade Play,” Council on Foreign Relations, June 8, 2022; and James Crabtree,
“Biden and Xi Struggle to Compete in Asia,” Foreign Policy, May 11, 2022.
199
Tobias Harris and Trevor Sutton, “Biden’s Economic Plan Leaves Asian Leaders Wanting More,” Foreign Policy,
May 27, 2022; Matthew P. Goodman and Aidan Arasasingham, Regional Perspectives on the Indo-Pacific Economic
Framework, Center for Strategic and International Studies, April 2022.
200 The White House, Fact Sheet: U.S.-Japan Competitiveness and Resilience (CoRe) Partnership, April 16, 2021.
201 USTR, “Readout of the First Round of Meeting of the U.S.-Japan Partnership on Trade,” March 1, 2022.
202 USTR, “Joint Statement of the Trade Ministers of the United States, Japan, and the European Union After a
Trilateral Meeting,” November 30, 2021
203 International Energy Agency, Japan 2021: Energy Policy Review, p. 30; Rock Swift and Yuka Obayashi,
“Explainer: Why Japan’s Power Sector Depends So Much on LNG,” Reuters, March 9, 2022.
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The United States and Japan convene several energy-focused dialogues and initiatives.204 These
aim to promote shared energy security, accelerate “the clean energy transition” in both countries,
and facilitate public-private efforts to provide access to “affordable, clean, and reliable energy” in
third countries, particularly in Southeast Asia and the Pacific Islands.205
Nuclear Energy
Japan is undergoing a national debate over the future of nuclear energy, with major implications
for Japan’s energy diversification efforts, U.S. businesses operating in Japan, and nuclear safety
and nonproliferation measures worldwide. In 2010, nuclear power was providing roughly 30% of
Japan’s power generation capacity, with the Japanese government aspiring to increase that share
to as much as 40% by 2030.206
However, the policy to further expand nuclear power was abruptly reversed in the aftermath of
the March 11, 2011, natural disasters and meltdowns at the Fukushima Dai-ichi nuclear power
plant (see text box, below). Public trust in the safety of nuclear power collapsed, and a vocal
antinuclear political movement emerged.207 This movement tapped into an undercurrent of
popular antinuclear sentiment, a legacy of the U.S. atomic bomb attacks on Japan in 1945.
Following the disaster, all of the country’s 54 nuclear reactors were shut down until 2015, when
some gradually began to come back online. As of October 2022, Japan had 33 operable reactors,
with two more under construction.208 The drawdown of nuclear power generation resulted in
many short- and long-term consequences for Japan: increased fossil fuel imports; rising electricity
costs for residences and businesses; heightened risk of blackouts in the summer; widespread
energy conservation efforts by businesses, government agencies, and ordinary citizens; and
significant losses for and near-bankruptcy of major utility companies.209
204 These dialogues and initiatives include the Japan-U.S. Energy Security Dialogue (established in 2022), the Japan-
U.S. Clean Energy Partnership, the Competitiveness and Resilience (CoRe) Partnership, and the Japan-U.S. Energy and
Energy Security Initiative.
205 U.S. Mission Japan, “Japan-U.S. Energy Security Dialogue Joint Statement,” December 8, 2022.
206 Japan Ministry of Economy, Trade and Industry, “New National Energy Strategy (Digest),” May 2006, p. 14.
207 Alexander Brown, Anti-Nuclear Protest in Post-Fukushima Tokyo, Routledge Press, 2018.
208 World Nuclear Association, “Nuclear Power in Japan,” updated October 2022.
209 Nikkei Asian Review, “Japanese Consumers Will Be Paying for Fukushima for Decades,” December 10, 2016,
https://asia.nikkei.com/Business/Japanese-consumers-will-be-paying-for-Fukushima-for-decades; Japan Ministry of
Economy, Trade, and Industry, “Strategic Energy Plan,” April 2014, p. 10.
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Japan’s March 2011 “Triple Disaster”
In March 2021, Japan observed the 10th anniversary of what it refers to as the “triple disaster.” On March 11,
2011, a magnitude 9.0 earthquake jolted a wide swath of Honshu, Japan’s largest island, shifting it eastward
approximately eight feet. The quake generated a tsunami that pounded Honshu’s northeastern coast, causing
widespread destruction. Some 20,000 lives were lost, and entire towns were washed away. Over 500,000 homes
and other buildings and around 3,600 roads were damaged or destroyed. Up to half-a-million Japanese people
were displaced. Damage to several reactors at the Fukushima Dai-ichi nuclear power plant complex led the
government to declare a state of emergency and evacuate nearly 80,000 residents within a 20-kilometer radius
due to dangerous radiation levels.
Japan’s immediate response to the multifaceted disaster received widespread praise. Over 100,000 SDF troops
deployed quickly to the region. After rescuing nearly 20,000 individuals in the first week, the troops turned to a
humanitarian relief mission in the displaced communities. Construction of temporary housing began a week after
the quake. Japan’s preparedness—strict building codes, a tsunami warning system that alerted many to seek higher
ground, and years of public drills—likely saved tens of thousands of lives.
Appreciation for the U.S.-Japan alliance among the Japanese public surged after the two militaries worked
effectively together to respond to the earthquake and tsunami. Years of joint training and many interoperable
assets facilitated the integrated alliance effort. “Operation Tomodachi,” using the Japanese word for “friend,” was
the first time that SDF helicopters used U.S. aircraft carriers to respond to a crisis. The USS Ronald Reagan aircraft
carrier provided a platform for air operations as well as a refueling base for SDF and Japanese coast guard
helicopters. Other U.S. vessels transported SDF troops and equipment to the disaster-stricken areas. For the first
time, U.S. military units op
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