Shinzo Abe isn’t known for his “art of the deal” – that’s Donald Trump’s shtick. But in Tokyo, the Japanese prime minister flipped the script on his US counterpart.
President Trump arrived in Japan on Saturday plagued by a world of troubles. Impeachment talk intensified at the same moment his much-hyped China trade deal was collapsing, and as Kim Jong Un resumes the missile-test programs that Trump claimed to have ended.
But a deal was not to be. Prime Minister Abe distracted Trump from the bilateral trade pact, the big economic win he covets so badly, with the art of distraction.
The day at the sumo dojo was great fun. Trump and Abe yucking it up for the cameras was diplomatic gold. The well-done steak dinners. The golf outing. The first audience with Japan’s new emperor and the palace banquet. The planned Japanese warship visit. Trump meeting with the families of Japanese nationals abducted by North Korea in decades past. It all made for quite a postcard.
Slo-mo deal or no deal?
Visuals aside, there is no US-Japan deal to speak of – or even the broad strokes of one – because Abe is trying to avoid one. Forget claims that Abe is waiting until after upper house elections in July. Expect Abe’s Liberal Democratic Party to come up with fresh excuses come August for why Tokyo needs more time.
When this dawns on Trump, expect him to react badly.
When Economy Minister Toshimitsu Motegi pledges “to work to get a deal done quickly,” he’s working on Japanese time, not at Trump’s speed. It took years for US President Barack Obama to secure Japan’s role in the Trans-Pacific Partnership (on which Trump reneged, and once again slammed at Monday’s press conference). Abe, meantime, is still pledging to reform Japan’s rigid economy six-and-half years since taking the reins.
Japan works in eras, not presidential terms. Trump got a first-hand look at that dynamic meeting with new Emperor Naruhito at the start of the “Reiwa” imperial era. Japan’s 1980s bubble economy happened during the “Showa” era. Deflation funk took hold during “Heisei,” which ended on April 30.
This glacial pace of change undermines Japan’s longer-term competitiveness. But the contrast with Trump’s need for a trade deal, like now, is bound to fuel Washington-Tokyo tensions no matter how thickly Abe turns on the charm.
Abe’s flattery offensive has done the trick so far. As Trump aimed his tariff bazooka China’s way, blew up Washington’s European alliances and enraged Canada and Mexico, Abe’s Japan has got a pass.
Until now. Two moments in the last few days should have Abe’s inner circle fearing Trump will soon add Japan to his “frenemy” list.
Reading from different scripts
First, Trump disappointed his Japanese hosts with tweets about Pyongyang’s latest provocation. “North Korea fired off some small weapons, which disturbed some of my people, and others, but not me,” Trump wrote.
Count 126 million Japanese among the “some” people worried about Kim’s short-range missiles. When Abe’s party worries he’s gotten little in return for bromancing Trump, cavalier comments that conflict with Japan’s interests like this, are Exhibit A.
What was running through Abe’s mind on Monday as Trump again claimed (wrongly) that North Korea no longer fires “rockets?” Or when Trump, standing next to Abe, called “Chairman Kim” a “very smart man,” downplayed Pyongyang’s missile tests and talked up “great waterfront property” in North Korea ripe for development?
It made quite a counterpoint for Trump’s meeting with abductee families. It’s Trump’s second such meeting, but Monday’s was on live television. The mysteries about people abducted by North Korean agents is a huge issue in Japan, and any help getting Kim’s regime to shed further light on abductees would be Abe’s biggest Trump payoff to date.
But can that be reconciled with Trump’s affection for Kim? How this geopolitical triangle works out is anyone’s guess.
The second came at a business round table after Trump’s arrival in Tokyo. Trump ribbed Toyota Motor CEO Akio Toyoda for the supposedly unfair advantage Japanese automakers enjoy in the US. “Japan has had a substantial edge for many, many years,” Trump said. “But that’s OK, maybe that’s why you like us so much,” Trump told chieftains of leading Japanese companies including Honda, Nissan and SoftBank.
The exchange exposed the dilemma facing Japanese officials: How do you negotiate with someone who seems to understand neither trade nor basic economics?
Japanese automakers directly employ upwards of 1.5 million Americans. Add in related industries in Alabama, Louisiana, Ohio and Tennessee and the number of jobs approaches 3 million. Also, US barriers to Japanese can also be prohibitive. The US, for example, taxes imports of light trucks at 25%.
When it comes to Washington-Tokyo trade dynamics, Trump doesn’t know what he doesn’t know. Japanese consumers don’t buy cars based on nationalistic impulses, but quality and fuel efficiency. Until Detroit raises its game to Japan’s levels, General Motors, Ford and others will continue to bleed market share.
The costs of Trump’s economic illiteracy are rising fast for Asia. Though Japan grew 2.1% in the first quarter, indications suggest contractions ahead. China may be the target, but Trump’s tariffs on steel, aluminum and nearly $250 billion of Chinese imports are slamming Asian supply chains.
Abe’s legacy, too. Since 2012, he boosted growth via aggressive monetary and fiscal stimulus. Those efforts dovetailed with strong global growth, producing Japan’s best expansion since the 1980s. That’s now at risk, as is Abe’s broader goal of revising the pacifist constitution.
As the economy loses altitude Abe has less political capital to spend. At the same time, the longer Abe drags his feet on a bilateral deal, the more frustrated Trump is sure to become.
The odds favor Abe offering Trump access to Japan similar to what TPP members are getting, but little more. It is telling, for example, that Abe is playing up the huge investments Japan Inc. is making in the US – roughly $24 billion, creating 45,000 new jobs. “Those companies contributing the most to the US economy are Japanese,” Abe said at Monday’s press conference.
Tokyo is trying to disarm Trump’s protectionism by upping military purchases. Trump gushed during the press conference that Japan is buying another 105 F-35 stealth fighters, giving it the biggest fleet outside the US. Trump also previewed a new joint space exploration project with Japan.
Yet coming trade talks could have quite the chilling effect. The more Abe gives Trump, the more his 10 TPP partners might rebel. The same goes to the European Union, which Japan signed a free-trade deal with last year. And, of course, giving Trump too much might reanimate opposition forces in Tokyo, complicating Abe’s legislative prospects.
There’s an oft-stated characterization that Abe’s Trump relationship is “unprecedented.” On the surface, perhaps. The two have met or talked on the phone upwards of 40 times. And in Tokyo, Abe referred to his Trump relationship as “rock solid” and “closest in the whole world.” But the bond may prove fragile.
In the 1980s, US President Ronald Reagan and Japanese peer Yasuhiro Nakasone had a “special” relationship of equals. Their bond wasn’t based on sycophancy, but genuine trust. In the early 2000s, George W. Bush and Junichiro Koizumi were tight. So tight that the prime minister ran afoul of Japan’s constitution by sending troops to Iraq to support America’s invasion.
Reagan and Bush had flaws, but neither reigned as erratically or as transactionally as the Trump White House. Abe’s Japan is always just one Trump disappointment, real or imagined, away from being lumped together with Xi Jinping’s China.
Not with the same invective, perhaps. But Trump holds the threat of 25% taxes on imports of cars and auto parts over Tokyo and slams Japan as a currency manipulator.
Even amidst the Abe lovefest, Trump complained that Japan has an “unbelievably large surplus” with the US, about $60 billion annually. That signaled he hadn’t heard a word that Abe said about Japan Inc’s massive US investments.
Now the photogenic trip is winding down, the odds of things ending well are dwindling by the week. In Japan, the two left the tussling to the sumo wrestlers, but don’t expect that to continue as Abe’s “Art of the Delay” collides with dealmaker-in-chief Trump.