Trump's remarks on trade deficit rattle Japan

President-elect has named Japan as one of the countries contributing to U.S. trade deficit

Top Japanese officials pushed back against President-elect Donald Trump’s suggestions that Japan is a drag on the U.S. economy, highlighting nervousness in one of America’s closest allies about friction with the incoming U.S. administration.
Mr. Trump on Wednesday named Japan as one of the countries contributing to the U.S. trade deficit, reiterating claims during the election campaign of unfair economic ties with Tokyo.

Japanese Finance Minister Taro Aso said Friday it was inappropriate to include Japan with countries that have larger trade surpluses with the U.S.

"In terms of trade imbalances, China is No. 1," Mr. Aso said at a news conference, also noting that Mr. Trump didn’t mention Germany’s larger trade surplus with the U.S. in his latest remarks.

Japan had a $42 billion surplus with the U.S. in trade in goods and services between January and September, according to the U.S. Census Bureau. China had $232 billion in surplus over that period, followed by Germany’s $52 billion and Mexico’s $46 billion.

More attention should be given to Japanese companies’ creation of around 800,000 jobs in the U.S., Mr. Aso said.

“We need the numbers to reach his [Mr. Trump’s] ears,” Mr. Aso said.

Tokyo is nervous about Mr. Trump’s criticism both because Japan considers itself the U.S.’s closest ally in Asia and because the U.S. is Japan’s single biggest export market. The U.S. accounted for a fifth of Japanese exports, totaling 63.360 trillion yen ($55.24 billion), between January and November, according to Japan’s government.

Memories of harsh criticism from some in the U.S. of Japan’s rapid economic ascent in the 1980s also remain fresh in the minds of many Japanese. In preparation for the new U.S. administration, Tokyo has been putting together files on Japan’s economic contributions to the U.S. to share with Mr. Trump and his staff, such as investment and job creation figures, according to government officials.

At least two of Japan’s corporate chiefs have directly approached Mr. Trump and his staff to smooth relations, including Toyota Motor Corp. Chief Executive Akio Toyoda, who met with Vice President-elect Mike Pence in Washington on Tuesday.
Mr. Trump targeted Toyota last week by saying in a tweet “no way” to its plans to build Corolla sedans in Mexico.

Mr. Trump has also taken aim at the cost to the U.S. of stationing troops in Japan as part of a bilateral defense treaty. In a Senate confirmation hearing Thursday, Mr. Trump’snominee for defense secretary, retired Marine Corps Gen. James Mattis, echoed those concerns.

“The American taxpayer should not carry a disproportionate part of our shared defense,” Mr. Mattis said.

Japan’s top government spokesman, Chief Cabinet Secretary Yoshihide Suga, said at a press conference Friday that costs to the U.S. and Japan to maintain security in and around Japan are appropriately divided between Japan and the U.S.

Mr. Suga added that Japan wants to strengthen security ties with the U.S. further and is prepared to carry its share of the burden. “Japan wants to play a more active role to deal with a more challenging security environment,” he said.

The U.S. spends about $5.5 billion a year on its bases and personnel in Japan, while Tokyo says it spends a roughly similar amount annually to support U.S. bases in Japan and the region.

Prime Minister Shinzo Abe was the first global leader to meet Mr. Trump after his November election victory, underscoring the importance to Japan of the U.S. alliance.
Source: The Wall Street Journal