Is Donald Trump On or Off Target When He Criticizes Japan?

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When presidential candidate Donald Trump is criticizing America’s trade relations, he typically follows the Republican line of who the bad guys are — China and Mexico.

But unlike his fellow Republicans (and occasionally even Bernie Sanders), Trump almost always tags on Japan to the list of nations that are unfairly trading with America. Trump has gone as far as claiming American jobs are being lost to Japan. Is Trump right to include Japan, and the others wrong?

Once Upon A Time In Japan

As with many things Trump, not really. In fact, for the most part, he seems about three decades behind the curve.

In the face of Japan’s decade-long economic downturn, it is easy to forget that in the 1980s Japan was poised to overtake America as the world’s largest economy, and books like Japan as Number One: Lessons for America and The Japan That Can Say No: Why Japan Will Be First Among Equals were bestsellers. You could not enter the business or current affairs sections of a bookstore without running into shelves of volumes extolling the miracles of Japanese business techniques, and admonishing America for falling behind.

The phrase “Japan bashing” entered the vocabulary of both Americans and the Japanese, going as far at one point as American Congressmen taking sledgehammers to Japanese electronics to make the news, and Detroit autoworkers doing the same to imported Japanese cars. For their end of the deal, Japanese investors did buy up signature properties like Rockefeller Center and the Pebble Beach golf course, and Sony acquired Columbia Pictures, among other A-list deals.

In fact, Trump himself was part of the anti-Japanese sentiment of those past decades, stating something in 1988 that sounds an awful lot like the things he is saying 2016 on the campaign trail: “So many countries are whipping America… I respect the Japanese, but we have to fight back.”

But what rang true for Trump in 1988 rings false today.

What Do The Numbers Reveal?

While the U.S. does for the most part run a trade deficit with Japan, as it does with most countries in Asia, it is far from dire. U.S. goods and private services trade with Japan totaled an estimated $290 billion in 2012 (latest data available). Exports totaled $116 billion; imports $173 billion. The U.S. goods and services trade deficit with Japan was $57 billion in 2012. Not small change, but not WWIII either.

It is worth noting that trade in private services with Japan (exports and imports) totaled an estimated $73 billion in 2012. Services exports, insurance among them, were $46 billion; imports were $27 billion. Thus the U.S. services trade surplus with Japan was $20 billion in 2012.

bfd58ca049f2d06b8cec4afc5a996c39Image Source: Dom

Trump has also singled out agricultural products as a particularly troublesome area. He correctly notes that tariffs make American rice uncompetitive in Japan, but fails to note U.S. exports of agricultural products to Japan totaled $12.1 billion in 2013, America’s fourth largest export market. Leading categories include: pork, corn, beef, and wheat.

Japan does run an almost $50 billion trade surplus with the U.S. on cars; very few American vehicles are sold in Japan. However, that is balanced by the fact that investment by Japanese auto companies in U.S. car manufacturing has hit record levels. Auto production by Japanese companies in the U.S. topped a record 3.6 million last year, up 10 percent from 2012.

Japanese car makers also purchased a record number of U.S.-produced auto parts, spending $57 billion with American suppliers last year, an 11 percent increase. Overall, about 94 percent of all Honda vehicles sold in the U.S. were made in North America. The number was 71 percent for Toyota vehicles, and 76 percent for Nissan. That adds up to a lot of jobs Trump appears unaware of.

Is the U.S.-Japan trade relationship equitable? No. Is it as bad as in the 1980s? No. Is Donald Trump right in including Japan in his list of bad partners? Not really. Perhaps someday someone will call him on it…

Peter van Buren lived in Japan for 10 years where he worked as an American Diplomat before settling in New York City. He is the author of two books, We Meant Well: How I Helped Lose the Battle for the Hearts and Minds of the Iraqi People and Ghosts of Tom Joad: A Story of the 99 Percent. Follow him at @wemeantwell


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