Donald Trump’s protectionism has confused and worried world leaders for some months now. In response to the news that Japan could face 25% US tariffs on car exports if no deal is struck by 1 August, Prime Minister Shigeru Ishiba said: “President Trump is saying there are friends and foes — and friends can be more difficult. This is very difficult to understand.” Then on Monday, the US President announced that a 25% duty would cover all Japanese imports to the US, not just cars.
Japan’s automotive industry employs over 5.4 million people and is a huge source of national pride and innovation. While the country’s carmakers could likely absorb the extra costs of tariffs (they have been doing so since April), what is perhaps worse about the whole debacle is that it is perceived as punitive, humiliating and manifestly unfair. This — not the money — is what could lead to an irreconcilable rift between the two countries.
Tone matters in Japan. In recent days, Trump has described the bilateral relationship as “one-sided”, claiming that Japan has “ripped off” America for decades. At one point the US President mooted 35% tariffs, which comes close to the aggressive posture he has shown against rival superpower China. Trump still throws in the odd “great people” compliment, but the level of insult has stretched Tokyo’s patience to the limit. Liberal Democratic Party policy chief Itsunori Onodera snapped yesterday that it was “unacceptable” and “extremely rude” to send only a letter to an allied nation.
President Trump has a curious relationship with Japan. In 1987, the then property tycoon spent almost $100,000 on adverts in the New York Times, the Washington Post and the Boston Globe claiming that Japan was manipulating the yen to maintain huge trade surpluses while freeloading off of America’s security umbrella. In his open letter addressed to “the American people”, he wrote about “why America should stop paying to defend countries that can afford to defend themselves”. Given his more recent assertions that European countries should pay for their own defence, this is one area at least where Trump appears remarkably consistent.
Even in that scathing letter — published the same year as The Art of the Deal — there were traces of a more positive impression of the Japanese. The word “brilliantly” is used to describe Tokyo’s supposed deviousness. In his book, the President wrote that he is a fan of “truthful hyperbole”, which he explained was “an innocent form of exaggeration”. In that vein, he seems to have an admiration for the Japanese for getting away with it all. This is to say nothing of his apparently sincere friendship with the late Shinzo Abe.
The problem is that Trump’s version of events differs from the perception of the Japanese people. Policymakers in Tokyo vehemently deny currency manipulation charges and claim that any non-tariff barriers are simply a case of different standards.
Is the relationship, then, irreparable? In fairness to Trump, Ishiba certainly hasn’t done much to ingratiate himself with his counterpart. He only got the “impression” that Trump was a leader he could work with after their first phone call last November. And he pulled out at the last minute of last month’s Nato summit where it had been expected he would at least seek a meeting with the US President. Perhaps most woundingly of all, Ishiba stopped short of offering full support for the US strikes on Iran last month, saying that it was “difficult for Japan to make a definitive legal evaluation at this point”.
But Ishiba has stressed his willingness to keep talking, albeit via his envoy Ryosei Akazawa, and Trump has proved himself capable of abrupt U-turns in the past. A compromise has been hinted at with Ishiba stressing that the question of “investment”, rather than tariffs, is where the Japanese would like to see the talks go now. For his part, Trump has said that “tariffs may be modified, upward or downward, depending on our relationship with your country”.
There may yet be a way out, if only the two sides could begin to understand each other. America, one thinks, will have to blink first. Earlier this month, Tokyo-based author William Pessick suggested that US tariffs could actually push Japan closer to China. As unlikely as that currently seems, maybe this consideration is what is needed to focus minds.
AloJapan.com