Tokyo Report | Diplomacy | Economy | East Asia

Japan’s Economic Diplomacy: A Compass in a Divided World

Tokyo has the ability to chart a stable path forward.

Japanese Prime Minister Takaichi Sanae meets with U.S. President Donald Trump on the sidelines of the U.N. General Assembly in New York, Sep. 22, 2026, one day before Chinese President Xi Jinping arrived for a state visit to the United States.

During the second term of U.S. President Donald Trump, protectionist measures – including unilateral trade actions and reciprocal tariffs – have re-emerged as central pillars of U.S. foreign policy. With this fundamental structure shift in trade policy of the United States, once the preeminent champion of open markets, Japan has arrived at a critical strategic juncture. Tokyo must bolster its economic “strategic autonomy” and diversify its international economic partnerships, even as it maintains its core alliance with Washington.

To be clear, the foundational importance of the U.S.-Japan alliance remains unaltered. Strategic diversification does not imply distancing Tokyo from Washington. Rather, expanding Japan’s economic options and building national resilience alongside this indispensable alliance ultimately fortifies bilateral stability. Simultaneously, Japan must differentiate itself from Washington’s protectionist drift by steadfastly anchoring an international economic order based on predictable, rules-based trade.

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