Key facts
- Japan is recalibrating its relationship with the US amid pressure for increased defense contributions and trade concessions.
- US President Donald Trump has criticized the US-Japan security treaty as one-sided.
- A Pentagon official reportedly urged Japan to raise defense spending to 3.5% of GDP.
- Tokyo cancelled the annual US-Japan "2+2" security talks.
- The US proposed 25% tariffs on Japanese automobiles and auto parts.
- Japan and the US reached an agreement on July 22, involving $550 billion in Japanese investment and improved market access for US producers.
Tensions between the United States and Japan have escalated as President Donald Trump, since returning to office in January 2025, has repeatedly criticized the 1960 Treaty of Mutual Cooperation and Security as "one-sided." He is pressuring Tokyo to increase its defense contributions and make broader trade concessions, framing these demands as a lever to gain bargaining power.
Recent developments indicate enhanced pressure tactics. In June 2025, a senior Pentagon official reportedly urged Japan to raise its defense spending to 3.5 percent of its Gross Domestic Product, a significant increase from its current approximately 1 percent and a previous US request of 3 percent. In response, Tokyo cancelled the annual "2+2" security talks between the US and Japanese foreign and defense ministers, a move reflecting domestic political unease ahead of the July 20, 2025, Upper House elections. Japanese officials perceive the demand as excessive and fear it could erode public support.
President Trump has warned of ramped-up tariffs if Tokyo disagrees to negotiate, including demands for rice imports from the US. These economic pressures could intensify distrust between the two nations. However, in early July 2025, Tokyo signaled urgency in restarting ministerial-level trade dialogue. Japan's tariff negotiator, Ryōsei Akazawa, met with US Treasury Secretary Scott Bessent during his visit to the Osaka World Expo to address planned 25 percent tariffs on Japanese goods set to take effect on August 1, 2025. These discussions mark the first tariff talks held in Japan.
Prime Minister Ishiba Shigeru emphasized that these negotiations are critical for securing a "mutually beneficial" outcome ahead of the upper-house elections. While President Trump has indicated openness to delay the new tariffs if acceptable offers are presented, Japan has stated it will not compromise its agricultural sector and highlighted that any agreement must include a resolution on the 25 percent automobile tariffs, which are central to Japan's export-driven economy.
Against this backdrop, Tokyo is actively diversifying its economic and security partnerships beyond Washington, engaging more closely with the European Union, ASEAN states, and Australia/India frameworks. Japan is also boosting its defense capabilities, including deploying long-range missile systems and considering support for a proposed US missile shield.