The past and future of public tax preparation


The past and future of public tax preparation


The stress test: Japan in an era of great power competition

U.S. President Donald Trump and Japan's Prime Minister Shinzo Abe hold a bilateral meeting during the G7 summit in Biarritz, France, August 25, 2019. REUTERS/Carlos Barria - RC1B90DB2B30

Director’s summary

With a dramatic power shift in the Indo-Pacific, the intensification of U.S.-China strategic rivalry, and uncertainty about the United States’ international role, Japan confronts a major stress test. How will Tokyo cope with an increasingly assertive China, an increasingly transactional approach to alliances in Washington, and a growing nuclear and missile capability in North Korea? Will it double down on the alliance with the United States to confront China’s provocations? Will it aim for greater independence in its foreign policy and expand military capabilities accordingly? Or will it seek some form of accommodation with China?

In September 2019, Brookings Vice President and Director of Foreign Policy Bruce Jones convened seven Brookings scholars and affiliates — Richard Bush, Lindsey Ford, Ryan Hass, Adam Liff, Michael O’Hanlon, Jonathan Pollack, and Mireya Solís — to discuss Japan’s present and future path in this era of great power competition. The edited transcript below reflects their assessment of the current state of Japanese strategic choices.

The highlights:

  • American decision-makers need to remember that the Japan alliance is an indispensable feature of America’s wider international strategy. The American forward presence in Japan supports U.S. national interests across the entire region and will be critical in addressing potential contingencies in the Korean Peninsula or the East or South China Seas, and perhaps even in the Middle East.
  • The United States and Japan are closely aligned in opposing China’s ambitions in the East and South China Seas, but effectively confronting China’s “gray zone” tactics continues to be a challenge for the allies.
  • The United States and Japan are not on the same page when it comes to a zero-sum approach to economic competition with China. Tokyo does not see decoupling from China as a sensible strategy and is wary of the costs imposed on Japanese companies from the tariff war and export controls that could force these firms to choose between American and Chinese markets. The recently announced mini-trade deal between the United States and Japan defused the immediate threat of auto tariffs and consolidated a shared approach on digital economy rules; but it did not achieve a balanced outcome in market opening with the exclusion of the auto sector.
  • A Chinese takeover of the Senkaku islands constitutes a low-probability but high-impact contingency as it would test the political will of the American leadership to risk a military confrontation with China. For that reason, renewed efforts and novel approaches to deterrence are warranted.
  • The Korean Peninsula presents immediate and formidable challenges for Japan: the continued advancement of North Korea’s nuclear and missile capabilities, the possibility that President Trump and perhaps future U.S. presidents would only object to ICBM capabilities or decide to withdraw American troops from South Korea, and the Moon administration’s prioritization of inter-Korea ties over nuclear proliferation concerns. Narrowing U.S.-Japan gaps on North Korea should be a top priority.
  • Japan and South Korea are placing diminishing value in sustaining an already fraught relationship. The latest downturn has sharply eroded trust in economic ties and compromised a crucial intelligence sharing agreement. The will and ability of Washington to step in to prevent a free fall between its two key allies in East Asia is in question.
  • Tokyo’s difficult relationships with its closest neighbors contrast with more successful engagement in the wider region. However, there are significant differences, in concept and implementation, between the Japanese and American “Free and Open Indo-Pacific” strategies. The Japanese construct is geographically broader, rests on a well-resourced infrastructure finance push, has laid the foundations for a regional trade architecture, and aims to engage China in a race to the top on infrastructure standards. In contrast, the American strategy rests on a zero-sum view of competition with China, has an underwhelming offer on infrastructure finance, and has retreated to a bilateral trade strategy with more frequent resort to tariffs. Unless the U.S. ups its game, the strategy will underperform.
  • Domestic policymaking reforms have enabled more purposeful action from Tokyo in a context of geopolitical flux. Changes in Japan’s security profile will be gradual as illustrated by the ongoing debate on constitutional reform. Japan’s penchant is to become a networked middle power with investments in the U.S. alliance, stabilization of relations with China, diversification of security partnerships, and all-out economic statecraft under the mantra of connectivity. If U.S.-China ties continue to deteriorate, this approach will be further stressed as Washington looks to its allies to make clear-cut choices in support of American strategy.