Deja vu all over again in US–Japan trade

Author: Aurelia George Mulgan, UNSW Canberra

From the late 1970s until the 1990s, US–Japan trade relations were marred by regular bouts of economic friction. These periods often peaked in tandem with rises in the United States’ trade deficit with Japan and ended in ‘voluntary’ Japanese concessions to US pressure.

US President Donald Trump meets with Japanese Prime Minister Shinzo Abe in the Oval Office of the White House in Washington, US, 7 June 2018 (Photo: Reuters/Kevin Lamarque).

Given US President Donald Trump’s obsession with trade deficits, his targeting of the United States’ top five trade deficit partners is no surprise. Japan is number three on this list after China and Mexico, so Tokyo could expect to find itself in the crosshairs for tariff hikes.

Still, it was a shock for Japan to be put on Trump’s ‘hit list’ for steel and aluminium tariffs. Japanese Prime Minister Shinzo Abe thought he had the inside track with the President. After all, numerous visits, phone calls, golf games, fish-feeding and shared burgers must count for something. This was backed up by Abe’s stock argument that Japan is ‘vastly contributing to the US economy by creating jobs’ with 75 per cent of Japanese brand cars sold in the United States actually manufactured there. Japan …continue reading