‘America First’ Trump’s election is expected to cause upheaval in Japan’s economy and security… Ishiba tries to push for quick talks

US President-elect Donald Trump. Reuters Yonhap News

US-Japan relations are expected to change significantly with the return of former US President Donald Trump to the White House. This is because President-elect Trump, who advocates ‘America First’, is expected to increase the burden on Japan in the security and economic areas.

Japan’s first challenge in the ‘Trump era‘ is the increased security burden, including defense costs. In a speech at the National Guard Association general meeting held in Michigan last August, President-elect Trump criticized the North Atlantic Treaty Organization (NATO) defense spending ratio target of ‘2% of gross domestic product (GDP)’ as “the theft of the century.” The Japanese government’s revised defense-related budget for 2022 during the era of Prime Minister Fumio Kishida is 2% of GDP.

It is expected to have an impact on the Japanese economy and industry as a whole. Public broadcaster NHK reported that there is a negative outlook for exports to the U.S. as President-elect Trump has pledged to impose a ‘universal basic tariff’ of 10-20% on all imported products. The Mainichi Shimbun reported that the pledge to impose a tariff bomb of up to 100% on Mexican imports could lead to a change in strategy accompanied by ‘bleeding’ of Japanese automobile companies. Nissan Motor Company produced more than 600,000 vehicles in Mexico last year, and Honda exports 80% of its Mexican-made vehicles to the United States. To avoid the burden of tariffs, measures such as relocating production bases to the United States are needed.

President-elect Trump has repeatedly expressed his opposition to the acquisition of U.S. steel giant US Steel, which is being pursued by Japan Steel at a cost of approximately 2 trillion yen (approximately 18.1 trillion won). However, Nippon Steel Vice Chairman Takahiro Mori said on the 7th that “the acquisition can be completed” by the end of this year, which was the original goal.

Former Prime Minister Shinzo Abe of Japan and President-elect Donald Trump of the United States. Reuters Yonhap News

The Japanese government is expected to quickly pursue contact with President-elect Trump. Mainichi said the government is preferring an early meeting before Trump’s inauguration, adding, “The background is the ‘successful experience’ of former Prime Minister Shinzo Abe, who built a strong relationship of trust with Trump.” Former Prime Minister Abe is known to have established a close relationship with a ‘golf meeting’ ahead of other countries’ leaders immediately after the US presidential election in November 2016, and President-elect Trump publicly called him a “friend” on several occasions.

Prime Minister Ishiba said after speaking with President-elect Trump on the phone that day, “We confirmed that we would meet as early as possible,” and “We agreed on raising the U.S.-Japan alliance to a higher level.”

Japanese Prime Minister Shigeru Ishiba. Reuters Yonhap News