On February 7th, Japanese Prime Minister Shigeru Ishiba met President Donald Trump for the first time.
Much coverage before and after the meeting focused on how Mr. Ishiba prepared under the backdrop of whether Mr. Trump would threaten Japan with tariffs like other key U.S. allies such as Canada and Mexico.
A day later, on February 8th, former US Ambassador to Japan Rahm Emanuel sat down with Bloomberg to give his insights on Japan and how the U.S. should move forward when discussing how this specific alliance should evolve.
Why does this matter to residential real estate?
Mr. Trump’s view on tariffs, as recent concern coming from Canada illustrates, negatively effects companies that rely on exporting to the States in the form of possible layoffs, closures and even currency weakness of the tariff-targeted country; effects which could eventually trickle down into the residential property market in the form of affordability issues for domestic buyers and renters.
Will Japan be seen in the same light as Canada and Mexico; targeted directly with tariffs despite being a staunch US ally? Only time will tell but Mr. Emanuel’s comments to Bloomberg below does shed some insight into how the Japan-US relationship could move forward.
Spoiler alert – Mr. Emanuel came across as more positive for Japan then one might expect.
Key Takeaways:
Japan: The No.1 Investor in the US – Japan has been the top foreign investor in the US for four years, supporting over 1 million American jobs, especially in manufacturing.
Strategic Military Ally – The US has over 50,000 troops stationed in Japan, the largest presence in any country, plus the only permanently based US aircraft carrier.
Economic Stakes: More Than Just Tariffs – Japan plays a vital role in US industries from LNG to agriculture, and imposing tariffs could disrupt this crucial economic partnership.
Defense Partnership Strengthens – Japan increased her defense budget to 2% of GDP and is the largest buyer of US weapons, reinforcing regional security.
Nippon Steel & US Steel: A Deeper Issue – The blocked acquisition mirrors Japan’s past resistance to US companies buying Toshiba. Meanwhile, the US granted a $20 billion contract to a Japanese company to replace Chinese cranes in every American port—proof of deep trust between the two nations.
The Tech Challenge with China – With Japan leading in semiconductor production, the US needs Japan on her side in the growing technological competition with China.
