Ahead of Japanese Prime Minister Sanae Takaichi’s scheduled summit next month with US President Donald Trump, the message from Tokyo appears to be that the US Supreme Court decision to invalidate Trump’s “reciprocal” tariffs will not affect Japan’s promised capital investment projects in the United States. That could prove a costly misstep for Japan.
With the Supreme Court invalidating the legal basis for Trump’s reciprocal tariffs, countries that have concluded trade agreements with the US under the threat of those tariffs are understandably questioning whether their deals should still stand. But not Japan.
The irony is striking. US leaders have long urged Japan and other countries around the world to build a fully marketised economy where the private sector is paramount and in which the state plays only a minor role. Despite that legacy, Trump pushed through a deal with former prime minister Shigeru Ishiba last year in which Japan would deliver US$550 billion of capital projects in the US in return for concessions on Trump-induced tariffs.
This contradiction is symptomatic of a wider malaise in the era of Trump chaos. The reality is that no one is really at the controls of the global economy, the institutional autopilot has been switched off and no clear course has been set. Changing metaphors, the economy is like a boat without a rudder.
This is likely to end in a crash landing or a shipwreck unless and until the “crew” – nations other than Trump’s America – can amass enough solidarity to defy the brigand captain and agree upon a common course. That means rejecting tariff tyranny and finding strength in unity to set a new direction.
That is admittedly a difficult assignment in a world with almost 200 nations. However, it is not an impossible one as long as even a few leaders from among the most powerful nations stand together.
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