Weekly Briefing — Japan Friendship: High Stakes for Georgia

Nurturing U.S.-Japan Friendship: High Stakes for Georgia

I arrived late Tuesday to Sakai’s assembly plant in Adairsville, ready to soak in the glory of powerful pavers. As a dad of three boys, big vehicles are a big part of my life, and I can’t say I wasn’t a little excited myself to see the Japanese firm’s road rollers lumbering along.

Already in the conference room: Members and supporters of the Georgia-Japan Legislative Caucus, a group of lawmakers dedicated to highlighting one of the state’s most important economic partnerships.

I slipped into the back next to one of the few Japanese employees, slightly bowing. After a video showing how Sakai’s equipment was used on Birmingham’s Barber Motorsports Park, we exchanged cards (with both hands, of course). Turns out, Yasunori Azumi-san was the president of the operation, having spent six years here.

But his presence was one of few indications, besides the company name, that Sakai America Inc. was a Japanese operation. As the local leadership gave us a tour, relaying how tough it’s been to deal with tariffs on their (mostly) imported components, Mr. Azumi silently watched from behind with a smile playing on his lips. On the (freshly paved) surface, Sakai operates as an American company.

That got me thinking again about the value, beyond cash, of Japanese investment in Georgia, a topic that seemed unavoidable to write about as the week wore on. Beyond Sakai, so many dots started to connect:

TOTO’s toilet factory in Morrow, Ga., unveiled a $224 million expansion that executives said was planned for five years, long before tariffs became a factor (story on the way)

…and this is just a small sampling of what goes on in the Georgia-Japan lane, where $10 billion has been committed in just the last decade, according to the state. Some communities have become heavily dependent on what happens in the bilateral relationship, given the prevalence of Japanese investors (some 400 companies employing 40,000 people).

In Griffin, at least five Japanese companies occupy one industrial park. In Sylvania, near Savannah, Koyo Bearings employs the equivalent of almost 5 percent of the Screven County population. Driving down International Parkway in Adairsville, I observed a similar Japanese clustering effect: Surrounding Sakai are Daiki, Airman USA and Yanmar. Just down the road, where Martin Luther King Jr. Boulevard turns into Nikkei Avenue, lies Nippon Light Metal USA. Bartow County, where Adairsville sits, will be home to a new Yakult plant: a $305 million investment in Cartersville announced a year before Mr. Trump’s was elected again.

All this to say: We in Georgia have a stake in the recently announced trade deal between the U.S. and Japan. The details are still fuzzy, as Mr. Trump says the $550 billion Japanese fund will come to the U.S. as a “signing bonus” into strategic sectors at the direction of the White House, all in exchange for lowering tariffs to 15 percent, including in the all-important automotive sector. Japan, meanwhile, says the benefit will accrue to Japanese firms as well, and that the largesse will mostly come as loans and guarantees.

Certain projects, like the recent growth at Sakai and TOTO, may already have been in the works. The overall stock of Japanese FDI in the U.S. stands at $754 billion, accrued over 50-plus years, so it’s unlikely that a half-trillion dollars could flood in during the remaining three of Mr. Trump’s term.

Whatever transpires, it only takes a cursory look around Georgia and the Southeast U.S. to see what’s at stake over time in showing that America is committed to long-term friendship with Japan, even as policy and actions, which the Japanese watch perhaps more closely, run the risk of betraying a short-term approach.