Nabe san, welcome back to SPF World Views.
Watanabe san: Thank you very much for asking me to comment. Happy to talk.
Leading up to Trump's visit to Japan, I think there was a great deal of focus on how the newly elected Japanese Prime Minister Takaichi would handle this test of her diplomatic skills. What were your first impressions of this meeting?
My first impression is that I’m so relieved that their chemistry was really tested and successfully done. Many people predicted the chemistry between Trump and Takaichi would be good, but you never know. Even such kinds of predictions sometimes are very wrong. For example, it was predicted that the chemistry between former Prime Minister Ishiba and Mr. Trump would be bad, but their chemistry was good. So, I'm glad that Ms. Takeuchi and Mr. Trump’s chemistry was so good.
I think one of the major connection points that they had, and that was really emphasized in this meeting, was the connection with the former Prime Minister Shinzo Abe, who they both had close relationships with. How did you see that playing into this meeting?
That's very important because Mr. Trump really appreciates the family ties or friend ties and he tends to think that personal ties can be extended to inter-state relations. I think sometimes people are very critical of this kind of thing, but, anyway that's a very good starting point for the two major countries, especially one of the strong allies in the world.
Both sides were very welcoming in their approach. Even outside of Akasaka Palace, there was a Ford F-150 pickup truck to welcome Donald Trump and there were reports afterwards that Prime Minister Takaichi said she would nominate President Trump for a Nobel Peace Prize. There seemed to be just overflowing welcoming on the Japan side. What did you think of this approach? Was this a good strategy or how did you see that playing out?
Watanabe san: Yes, I think probably I could say it's an Asian tradition to welcome partners. I think China is also very good master of welcoming counterparts. Mr. Trump was very welcomed in Kuala Lumpur in Malaysia, too. And South Korean President Lee also welcomed Mr. Trump. So, it's kind of a tradition.
But it's a reflection of the seriousness of the Japanese leader and the people to maintain the closer alliance with the United States, because we need to survive in the very difficult security environment.
And also we have a little bit difficult economic relations with the United States imposed by the higher tariff. And somehow we need to have agreement with the United States for the reasonable tariff level for the survival of the Japan’s export industry.
President Trump is a bit more of a known entity for his policy, whereas Prime Minister Takaichi has just assumed office so a lot of her policies are not known or we don't have a good picture of where she might be headed. I wonder if you could talk about where you see alignment in the general positions and policies between the two leaders.
Ms. Takaichi was just elected, and surprisingly she's popular among the people. Her approval rate is more than 70%. That's much higher than her predecessors, so I think that's a very good political capital for her to proceed with her own policies, especially security and foreign policy.
I'm sure that Takaichi showed the Japanese public her diplomatic ability and also creating a good chemistry with the U.S. leader. I think that impressed the Japanese people. The Japanese people knew, of course, that probably Ms. Takaichi and Mr. Trump’s chemistry would be good because Ms. Takaichi was a protégé of former Prime Minister Abe, who Trump really liked.
I think that Mr. Trump really, really, depends on the personal relations and the chemistry with the counterpart, and this is a very good start, that’s clear. Nobody can deny.
On a personal level, they've really hit it off and been able to establish this good first relationship. Do you see any potential areas for friction or areas of disagreement that may come up either on the policy side or otherwise?
Watanabe san: First of all, many media and the people are worried about the existing agreement between Japan and the United States for the $550 billion investment from Japan to the U.S., and that somehow the U.S. has a huge control over the contents. The contents are not so clear yet and still the interpretation of the investment is very different from the U.S. side and the Japanese side. This time, probably the details of the agreement were not discussed. I don't think they have time for these kind of things. That's one thing.
And the other one is Ms. Takaichi promised to increase the defense budget much earlier than former Prime Minister Kishida agreed to. But, how Ms. Takaichi will secure the budget from the National Diet – she is still suffering from a minority in both houses – that is a really big test. So, a good start, but a good start does not guarantee a happy end.
You brought up the $550 billion dollar agreement for investment, and this was one of two agreements that the two leaders signed during this visit. One was this tariff-related agreement where Tokyo agreed to invest $550 billion in the United States, and then the other one was a framework to secure the mining and processing of rare earths and other minerals. What is the significance of these agreements being signed at this meeting? Are they mainly for optics or is there something more substantial that happened here?
Watanabe san: It seems to me that it’s more for the larger international politics because Mr. Trump is now in the South Korea to have a bilateral summit with Chinese leader Xi Jinping. I think, clearly China is utilizing rare earths and rare minerals somehow for the negotiating with the tariff negotiation.
I think the rare earths, especially securing the supply chain, is critical for all countries of the region and in the world, too. And the U.S. and Japan clearly have an interest in having an agreement to secure the supply chain, and I think it is a really good step that somehow President Trump is starting to discuss with counterpart Xi Jinping.
Tariffs have been a big tool in the tool belt of Donald Trump when looking toward international relations and diplomacy. I wonder, does the signing of this agreement in any way quell fears on the Japan side regarding any potential instability in this trade relationship?
Watanabe san: Basically, imposing a tariff is not so good for the economy, both Japanese economy and the U.S. economy. But at the same time, clearly it gave Mr. Trump somehow the bargaining chips to go ahead for several issues.
For example, in Kuala Lumpur, Malaysia, Mr. Trump was somehow welcomed by the achievement of a ceasefire between Thailand and Cambodia. And several media said that one major part is coming from Mr. Trump’s effort. This effort is actually threatening to impose a tariff. If you don't agree, we are going to put more tariffs.
It may have worked out somehow. But, generally, imposing a tariff is not good for the regional economy and the U.S. economy either. So that's probably still how important that kind of issue is. Especially, East Asian leaders are so worried about U.S. engagement in the region militarily or economically.
What then are the next steps for Japan looking toward this economic relationship with the United States?
Probably Japan is one of the first countries which has been in a tough trade negotiation with the United States in the 70s, 80s, and 90s. So, Japan knows how the sentiment of U.S. voters, especially suffering from losing a job and really wanting to get back to their job and production to their country.
I think that's why that Japan never confronted the U.S. trade negotiation and tried to find the best way to somehow the agreement in tariff or economic situation without sacrificing the value of military alliance between the U.S. and Japan. That should be expanded to the other regional players, too. I think that's very important for the U.S. to win over the competition with China, too.
Looking to the defense issue and security issue, you mentioned in one of your previous comments that Prime Minister Takaichi has previously pledged to raise Japan's defense spending to 2% of GDP by the end of March, which is well ahead of the previously planned schedule. Leading up to this initial meeting between the leaders, I think there were some concerns that perhaps the U.S. would come in or Donald Trump would come in and push for more or really try to push forward a specific number. How did you see this play out in the meeting between the two leaders?
Watanabe san: You know, that's lessons learned by the Japanese leader, Takaichi. If Japan is just waiting for the response from the U.S., I'm sure that would be a time for the U.S. to say to Japan, you should spend more money on defense considering the environment.
Instead, Takaichi really tried to step up to the more rapid level of attainment of Japan's defense spending. That is somehow a very good way to prevent further demands from the U.S. side, because several U.S. defense officials are suggesting that Japan should pay more than 3% of GDP for defense. Already NATO countries agreed to pay 3.5% for defense by the year 2035. So, I think Prime Minister Takeuchi is wise enough to the more positive forward-leaning offer by herself.
But still Japan has the homework to spend more than that. And my sense is that the GDP number doesn't matter so much, but Japan really needs to realize the very effective and efficient defense capability. That building up is a really big test for Ms. Takaichi.
From Tokyo, they had their summit meeting and then the two leaders flew together in the U.S. presidential helicopter to Yokosuka, where they gave a speech aboard the aircraft carrier, the USS George Washington. And in those remarks, Prime Minister Takaichi mentioned that Japan is facing a severe, unprecedented security environment, and she talked about how Japan needs not just words, but action to reinforce their defense capabilities and contribute to peace and security. What are your thoughts on these comments? Do they maybe signal any particular defense policy for the Takaichi administration?
Watanabe san: Ms. Takaichi is regarded as a conservative lady. How conservative really depends on the policy direction. I think, I'm very positive for Ms. Takaichi’s stance for the more positive security policy.
And this government formation changed from the previous Ishiba administration to the Takaichi administration. Ishiba had a coalition with the Komeito Party. That's a coalition party with a more pacifist tendency. The current the coalition partner is the Isshin party (Japan Innovation Party). That's more conservative than Komeito.
Clearly there's some agreement for the more positive defense policy. Ms. Takaichi picked up a good security policy defense advisor from retired Self-Defense Forces. She has been very positive to show the more positive cyber defense when she was in charge of the ministry of telecommunications.
People expect Takaichi to be a more security-oriented person, and somehow Ms. Takeuchi enjoyed a high approval rate, more than 70%. Clearly the Japanese people know Takaichi is more hawkish and more serious about security. That was a good point to the Japanese people, especially the younger generation, because they are worried about their own security issue in such a very difficult security environment.
What will you be watching in the Takaichi administration regarding defense policy moving forward?
One impressive point of Ms. Takaichi’s policy offer in the LDP leaders’ election, she's offering to, the more function of Japan's intelligence capability, and even she offered counterintelligence legislation. That was very unpopular among liberals, but it's necessary. And the reason is that simply Japan didn't have a normal level of counterintelligence capability and, of course, intelligence capability, too.
I think Takaichi seems to tackle the overdue homework of Japan's security policy. Without the intelligence capability, no nation can have a reasonable and effective security policy. So she just stepped up to what has been a taboo area in the past.
What will you be watching moving forward looking to the Japan-U.S. relationship writ large and its impact on the region?
Japan and the United States have been upgrading the function of the military alliance, but that was never tested in a serious combat situation. That was lucky, of course. And clearly the capability is creating deterrence capability and preventing future warfare, but the military balance keeps changing. So, it's time for both leaders to renew the function and the capability of the alliance, and that's going to be the source for the future stability of the region.
Outro: That was our conversation with Tsuneo “Nabe” Watanabe, senior fellow of the National Security and Japan-U.S. Program at SPF. Thanks for joining us for this episode of SPF World Views. We'll see you next time.
