Japan is a significant partner of the United States in a number of foreign policy areas, particularly in security concerns, which range from hedging against Chinese military modernization to countering threats from North Korea. The alliance facilitates the forward deployment of about 50,000 U.S. troops and other U.S. military assets based in Japan.
While core elements of the alliance may endure, the overall relationship under President Donald Trump will likely differ somewhat from relations under the Obama Administration. On January 30, 2017, the United States formally withdrew as a signatory from the Trans-Pacific Partnership (TPP) agreement. The TPP had been a centerpiece of the Obama Administration's policy of rebalancing U.S. economic and security interests to Asia and a top priority for Japanese Prime Minister Shinzo Abe's government. Although a positive February 2017 summit between Trump and Abe allayed some of the concerns that the alliance would suffer in the new Administration, the meeting did not resolve what some observers see as the most contentious issues in the relationship. As a candidate, Trump leveled criticism at Japan's trade practices and contributions to the security relationship.
Outside of North America, Japan is the United States' third-largest export market and second-largest source of imports. Japanese firms are the second-largest source of foreign direct investment in the United States, and Japanese investors are the largest foreign holders of U.S. treasuries. The U.S. withdrawal from TPP coupled with Japan's continued advocacy for the pact creates some uncertainty on next steps in the economic relationship, although some argue the discussions on a bilateral economic dialogue announced during the February 2017 summit could lead to formal FTA negotiations.
After years of turmoil, Japanese politics has been relatively stable since the December 2012 election victory of Abe and his Liberal Democratic Party (LDP), and further consolidated in the LDP's subsequent parliamentary gains. These victories provided Abe with some domestic political capital to pursue the more controversial initiatives of his agenda, like increasing the Japanese military's capabilities and flexibility. Political continuity in Tokyo has allowed Abe to reinforce his agenda of revitalizing the Japanese economy and boosting the U.S.-Japan alliance. The LDP coalition's landslide in the July 2016 Upper House elections further solidified Abe's strength and revealed the weakness of the opposition.
Relations with South Korea have soured, drawing concern from U.S. officials eager to foster trilateral cooperation among the allies. Abe was credited for tempering his comments and beginning a tentative rapprochement with Seoul, although gains are now threatened by political turmoil in South Korea. Elsewhere, Abe has pursued stronger relations with Australia, India, Russia, and several Southeast Asian nations. U.S.-Japan defense cooperation has improved and evolved in response to security challenges, such as the North Korean missile threat and the confrontation between Japan and China over disputed islands. Abe accelerated the trend by passing controversial security legislation in 2015.
Much of the implementation of the laws, as well as of U.S.-Japan defense guidelines updated the same year, lies ahead and full realization of the goals to transform alliance coordination could require additional political capital and effort.
Additional concerns remain about the implementation of an agreement to relocate the controversial Futenma base on Okinawa due to opposition from the local population, despite a recent court ruling in Tokyo's favor.
