2018 brought with it a swirling series of summits, including another visit by Prime Minister Abe Shinzo to the United States to meet President Donald Trump. The year began with Japan and the United States toe-to-toe on their “maximum pressure” strategy toward North Korea. Four months later there was the announcement of a June 12 summit between Trump and North Korea’s leader Kim Jong Un. Tokyo and Washington have yet to come together on trade, and even at the Abe-Trump summit in mid-April, the differences were conspicuously on display. The US-Japan economic partnership remains a potential black hole for the alliance in the months ahead. But the action is in Northeast Asia for the moment, where everyone seems to be trying to meet with everyone. Nonetheless, Abe and Trump made clear in their summit their mutual goal has not changed:  complete, verifiable, and irreversible denuclearization by North Korea.

North Korea: beware, negotiations ahead!

Whereas the defense requirements to counter Kim Jong-un’s increasingly sophisticated missile arsenal focused US-Japan attention at the end of 2017, this year began with a crescendo of diplomacy. In Canada, Foreign Minister Kono Taro and Secretary of State Rex Tillerson joined representatives from 18 other countries to discuss how to manage the North Korean challenge to regional stability. Kono and Tillerson met on the sidelines, and then again with South Korea’s Foreign Minister Kang Kyung-wha.

Foreign Ministers from 20 countries at a meeting in Vancouver, Canada on January 16, 2018 (Getty Images)

The PyeongChang Winter Olympics in February proved a much-needed turning point. Kim Jong Un sent a high-ranking mission to attend, as well as athletes and their cheerleaders. South Korea’s President Moon Jae-in welcomed Kim Jong Un’s sister, Kim Yo Jong, and Kim Yong Nam, president of North Korea’s Parliament and nominal head of state. Prime Minister Abe joined in the diplomacy, attending the opening ceremonies and meeting the North Korean government delegation. Vice President Mike Pence represented the United States at the opening ceremonies, but refused contact with North Korean representatives. Pence stopped in Tokyo on his way to meet Prime Minister Abe and Deputy Prime Minister Aso Taro to discuss the alliance.

Diplomacy with North Korea picked up speed from there. In early-March, President Moon’s National Security Advisor Chung Eui-yong visited Pyongyang and Moon announced he would meet Kim Jong Un at the Inter-Korean Peace House at Panmunjom on April 27. Chung visited Washington to brief the Trump administration on March 8, and after talks in the White House told the press that Trump had agreed to meet Kim. This stunning announcement, made by a foreign government official on the White House lawn, was a game-changer.

The Abe Cabinet reacted quickly to Trump’s abrupt tack to diplomacy, and Abe and Trump spoke on the phone that evening. The prime minister made plans to visit Washington to discuss a potential opening for Trump’s negotiation with Kim Jong Un, initially planned for May. Abe said in the call that he “thinks highly of Pyongyang’s shifting ground,” and welcomed  North Korea’s renewed commitment to denuclearization as a victory for the “maximum pressure” campaign undertaken by the United States and Japan.

Trump also took steps to revamp his foreign policy team, creating some concern in Tokyo about discontinuity in the Trump administration’s approach to North Korea. Secretary of State Tillerson, a strong advocate of diplomacy with North Korea, was summarily fired via a Tweet on March 13. CIA Director Mike Pompeo was tapped to replace him. Nine days later, after rumors that the president had lost confidence in him, National Security Adviser H. R. McMaster resigned, and Trump appointed John Bolton, former UN ambassador (2005-2006) and under secretary of state for arms control and international security (2001-2005) during the George W. Bush Administration. Both are known for hardline stances on North Korea and its weapons programs. Pompeo as CIA head noted publicly on Jan. 22 that Pyongyang was “only a handful of months” from being able to deliver a nuclear attack to the territorial United States. Bolton, on Fox News as a commentator, has repeatedly said that North Korea’s efforts at diplomacy were only lies intended to buy the regime time to further develop its nuclear arsenal. In a Feb. 28 editorial for the Wall Street Journal, Bolton forcefully advocated for a preemptive military strike against North Korea.

The Abe-Trump summit at Mar-a-Lago on April 17-18 put Japanese concerns about North Korea to rest. Abe got what he came for: reassurance from Trump that Washington and Tokyo were still on the same page when it came to what Pyongyang needed to do to eliminate its military threat to Japan. The president stated, “As I’ve said before, there is a bright path available to North Korea when it achieves denuclearization in a complete and verifiable, and irreversible way. It will be a great day for them. It will be a great day for the world.” Abe responded with, “Just because North Korea is responding to dialogue, there should be no reward. Maximum pressure should be maintained, and actual implementation of concrete actions towards denuclearization will be demanded. This firm policy has once again been completely shared between us.”

Trump and Abe meet at Mar-a-Lago (Getty Images)

Trump also confirmed once again that he would not forget the families of Japan’s abductees when he met Kim Jong Un, a promise he had made directly to the families during his visit to Japan in the fall of 2017. Abe also brought home the need to address  North Korea’s burgeoning missile arsenal, and referenced the Japan-DPRK understanding on ending missile launches in the Pyongyang Declaration in 2002. How the Trump administration will incorporate this aspect of North Korean proliferation in the Trump-Kim meeting remains to be seen. But the president continues to reassure the prime minister that he recognizes the threat of short- and medium-range missiles to Japan. The summit also revealed that while the personal relationship between Donald and Shinzo remains intact, their different approaches on trade have not been resolved.

Trade, trade, trade

On March 8, Japan and 10 other countries signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP, or TPP-11), a landmark multilateral trade agreement that notably did not include the United States. The CPTPP will reduce tariffs in countries that together make up more than 13 percent of the global economy and $10 trillion in GDP. In its earlier form, which included the United States, the 12-nation Trans-Pacific Partnership (TPP) trade deal would have been much larger at 40 percent of the world economy. However, President Trump withdrew the United States from the TPP shortly after entering office in January 2017. For Japan, signing the CPTPP in March followed a busy fall of free-trade negotiations, including finalizing a deal for an Economic Partnership Agreement with the European Union on Dec. 8. The CPTPP will enter into force 60 days after it is ratified by at least six of the 11 member countries and could come into effect before the end of 2018.

Just hours after the conclusion of the CPTPP, President Trump signaled a sharply different position on trade when he imposed stiff new tariffs on imported steel and aluminum. The new tariffs – 25 percent on steel and 10 percent on aluminum – were issued under a rarely used provision (Section 232) of the Trade Expansion Act of 1962, which gives the president broad powers in taking actions to defend national security. The move followed a report from the US Commerce Department in January that identified imports of metals as a potential national security threat. The tariffs triggered strong opposition from affected countries, including Japan and other US allies, as well as from within Trump’s own administration and party. The day before the announcement, Trump’s chief economic advisor, Gary Cohn, resigned after his failure to prevent the tariffs. More than 100 Republicans in Congress also sent a letter to Trump asking him to abandon the proposed levies on metal imports.

In response to pressure, the Trump administration announced a series of exemptions, yet Japan was not included. The initial presidential proclamation exempted Canada and Mexico from tariffs, while US Trade Representative Robert Lighthizer later announced temporary exemptions for Australia, Argentina, Brazil, South Korea, and the European Union on March 22. The United States is the largest importer of steel in the world, and the tariffs threaten nearly $2 billion in Japanese exports. While the Japanese government expressed official regret at the decision, Prime Minister Abe’s government did not retaliate with tariffs of its own. Instead, Japanese officials pressed their US counterparts through diplomatic channels to exempt Japan, stressing that the country’s steel imports provide tremendous benefits for US companies and do not pose any security threat to an important ally. On March 29, Minister of Finance Aso, who heads Japan’s delegation for the economic dialogues with the United States, went a step further in the Diet, saying that Japan should not allow Washington to use tariffs to pressure Tokyo into talks for a bilateral FTA. Aso warned that Japan should avoid bilateral negotiations given the power imbalance between the two countries and stick instead to multilateral channels. While US-Japan trade negotiations continue, many Japanese companies hope in the meantime that they can score exemptions on a product-by-product basis for some of their higher quality goods, as Trump’s policy includes a provision allowing US companies to bypass the tariffs if they cannot find the necessary metals in domestic markets.

Apart from protectionist policies on steel and aluminum, Tokyo watched closely in the first part of the year as the Trump administration took on China in a tit-for-tat exchange aimed at addressing the trade imbalance and differences over intellectual property rights. On March 22, Trump signed a memorandum instructing US Trade Representative Lighthizer to apply tariffs on $50 billion worth of Chinese goods. In response, China first announced its own set of tariffs on $3 billion worth of US imports, in retaliation for the steel and aluminum tariffs, and then implemented further tariffs on 128 US products on April 2. The next day, the USTR published an initial list of more than 1,300 Chinese goods that would be included in the forthcoming tariffs, including items such as flat-screen televisions, weapons, medical devices, and batteries. The Chinese government again responded quickly on April 4 with a plan for additional tariffs of 25 percent on 106 US items, including automobiles, airplanes, and soybeans. The tariff on soybeans received particular attention, as soybeans are the top US agricultural export to China, and reports from US companies suggest that China stopped buying soybeans altogether as a result. The Trump administration was not deterred, however, with Trump tweeting on April 4 that “we are not in a trade war with China, that was lost many years ago.” The next day, Trump directed the USTR to consider another $100 billion worth of tariffs on Chinese goods.

These developments clearly put trade at the forefront of the agenda for the Trump-Abe summit in mid-April. Initially, signs pointed to a potential breakthrough in negotiations as President Trump surprised many observers when he told a gathering of farm-state lawmakers on April 12 that he had directed the USTR to weigh the possibility of rejoining TPP. Many interpreted the move as an overture to US agricultural producers who stood to suffer from trade frictions with China, although Trump tweeted later in the day that he would only join TPP if the deal were “substantially better” than the deal negotiated under President Obama. Even with this caveat, however, Trump’s sudden openness to reconsidering TPP – after years of criticizing the deal first as a candidate and then as president – signaled the potential for a big win for Japan’s economic diplomacy. Prime Minister Abe has long been a proponent of the United States returning to the TPP, and its inclusion could have significant ramifications for the Japanese economy. An analysis by the Japanese Cabinet Office in December 2017 showed that the original TPP deal would have pushed up Japan’s long-term GDP growth by 2.59 percent, significantly more than the 1.49 percent expected under the current CPTPP. Moreover, Abe is hopeful that if he can convince the US to return to TPP, there will be less appetite for a bilateral trade deal, which continues to be an issue of friction with Trump.

The initial promise offered by a potential US return to TPP, however, was soon followed by mixed messaging in the Abe-Trump summit, revealing that significant work remains to close the gap between the two leaders on trade. In the same tweet in which Trump showed some flexibility on TPP, he also criticized Japan for “hitting us hard on trade for years,” and a report from the Treasury Department the following day (April 13) said that it “remains concerned about the persistence of the large trade imbalance” with Japan. In a press conference during the summit, Abe touted TPP as “the best [deal] for both countries,” while Trump expressed a strong preference for bilateral negotiations to take on the “massive trade deficit with Japan,” saying “unless they offer a deal that we cannot refuse, I would not go back into TPP.” Later in the day, Trump again slammed TPP on Twitter, saying that he did not like the contingencies in the deal and preferred to pursue a bilateral deal with Japan. As for Section 232 concerns, Abe reiterated in the press conference that “Japanese steel and aluminum would not exert any negative influence on US security,” and that negotiations were ongoing. Trump side-stepped a reporter’s question about potential exemptions for Japan, instead noting that the tariffs have “got us to the bargaining table with many nations,” leading to “billions of dollars coming into the coffers of the United States.”

One positive trade-related outcome of the summit is that Trump and Abe agreed to start a new round of trade and investment negotiations, this time led by USTR Lighthizer and Motegi Toshimitsu, Japan’s minister in charge of TPP issues. Compared with the US-Japan Economic Dialogue, which is led by Vice President Pence and Deputy Prime Minister Aso, these working-level meetings could create a venue for diplomats to work out specifics needed to make progress on trade. If the United States is serious about a return to TPP, it will want to come to a decision quickly. The Japanese Diet took up discussion of TPP-related bills on April 17, and could ratify the agreement as early as mid-June, paving the way for the deal to take effect later this year or in early 2019. At the same time, accommodating Trump’s desire to renegotiate TPP will be challenging, given that an agreement is already in place, one that Abe has described as a “delicate piece of glasswork that is extremely difficult to change.”

Evolving national defense strategies

By early 2018, the Trump administration had issued a series of documents designed to provide a strategic vision for its America First approach. In December 2017, the National Security Strategy offered the first tangible definition of how America First translated into alliance policy. In January, the National Defense Strategy demonstrated a shared conviction that an Indo-Pacific frame for thinking about alliance partners in the region could bear fruit.

But it was the Nuclear Posture Review (NPR), issued in February that offered Tokyo the best assurance that its concerns over the US commitment to extended deterrence would be addressed. For some time, Japanese security planners have worried about the regional military balance and US strategy to deter nuclear and non-nuclear threats. The increasingly integrated strategic forces deployed by China and North Korea called for a more flexible approach to allied deterrence. The day after the NPR’s release, Foreign Minister Kono issued a statement saying “Japan highly appreciates the latest NPR,” as it “clearly articulates the U.S. resolve to ensure the effectiveness of its deterrence and its commitment to providing extended deterrence to its allies including Japan.” Kyodo reported that Tokyo policymakers saw their own recommendations in the Trump administration’s document.

Japan too had been updating its own defense preparations. In December 2017, the Ministry of Defense announced it would invest in expanding and deepening its ballistic missile defenses. The Aegis Ashore system, priced at ¥200 billion ($1.8 billion), would give Japan a much larger scope for detecting and targeting ballistic missile launches, a capability that Japan’s neighbors could not ignore. Moreover, the Abe Cabinet began its formal deliberations on a new national defense plan, the TAIKO, and an accompanying five-year procurement plan, the Midterm Defense Plan, which would implement significant upgrades in the Self-Defense Force’s capabilities. Important in this five-year plan is the commitment to annual defense budget growth, expected to grow from annual increases of 0.8 percent in the past five-year plan to 1 percent in the five years to come.

Politics may handicap this effort, however. The Ministry of Defense came under intense scrutiny after the SDF admitted that they had failed to report daily logs retained for the Ground Self-Defense Force deployment in South Sudan. Defense Minister Onodera Itsunori pledged a full investigation of SDF accountability in providing a record of its past deployments, including past efforts in Iraq. Days later, the Air and Maritime Self-Defense Forces revealed that they too had records of their deployments.

Conclusion

Despite the surprises dealt by President Trump in early 2018, Prime Minister Abe used the April summit to put to rest growing anxiety in Tokyo (and in Washington) that the Abe-Trump relationship had weakened. Abe’s difficulties at home were growing with continued news about cronyism scandals making a significant dent in his approval rating. By late April, Japan’s media reported significant loss of approval for Abe, with some reporting his disapproval rating to be as much as 15 to 20 points above his approval rating, which had declined to under 40 percent. The announcement of a Trump meeting with Kim, coupled with the application of sanctions on Japan’s steel exports, convinced many in Tokyo that the honeymoon was over and the personal ties between Abe and Trump no longer inoculated Japan against Trump’s America First agenda.

Trump and Abe now face two hurdles. The first is to ensure their alignment on negotiations with Kim Jong Un remains, and to persuade President Moon that trilateral cooperation remains his surest path to peace. The June 12 meeting between Trump and Kim could begin a longer process of disarmament talks. Or, it could end up as a one-off meeting with considerable political pay-offs for each leader, leaving harder security challenges for Seoul and Tokyo to manage on their own. Given the abrupt diplomacy of the past few months, anything seems possible.

The second hurdle is trade relations. One thing is clear: the United States and Japan will have to confront their differences over a bilateral free-trade agreement. Abe’s suggestion of a “free, open, and reciprocal Indo-Pacific framework” may offer a way out. It wisely echoes the language the Trump administration has used for its security strategy documents. But if the president remains focused on deficit reduction as the only metric for a deal with Japan, tensions are likely to grow. If coupled with a fallout over the North Korea negotiations, this could spell a difficult path for Abe and for the US-Japan relationship.