Continuity and change in U.S.-Japan economic relations

Although frequent policy reversals from the Trump administration have created significant uncertainty domestically and abroad, the prognosis for U.S.-Japan relations is positive. Earlier fears, prompted by Japan-bashing on the campaign trail and the decision to withdraw from the Trans-Pacific Partnership Agreement (TPP), appear to have been allayed by President Trump’s meetings with Prime Minster Shinzo Abe in November 2016 and February of this year. However, plans for the U.S. to renegotiate its existing trade agreements and move forward only on bilateral trade agreements will have both a direct and indirect impact on Japan. As the new U.S. administration turns away from multilateral trade agreements and entertains major tax reforms, Japan must reformulate its trade and economic strategy, which had been pinned to the TPP as a means to jumpstart its economic growth strategy.

On May 2, the Center for East Asia Policy Studies at Brookings hosted a panel of distinguished Japanese politicians and U.S.-based economic experts for a discussion on the future of U.S.-Japan economic relations. Panelists addressed the outlook for Abenomics and Japan’s economic reform program, Japan’s trade policy post-TPP, prospects for the high level U.S.-Japan economic dialogue, and the impact of U.S. economic policies, such as border adjustment taxes, on the Japanese economy.