The Trump–Takaichi Summit and Japan’s Emerging Economic Statecraft

In late October 2025, US President Donald Trump returned to Tokyo for a highly choreographed state visit, during which he and Prime Minister Sanae Takaichi declared a ‘New Golden Age’ for the US-Japan alliance. The defining image was unmistakable: both leaders standing on the deck of the aircraft carrier USS George Washington, addressing American and Japanese service members side-by-side.

Theatre and Substance: Trump’s Visit as Economic Diplomacy

Takaichi proclaimed that Japan and the US already ‘share the greatest alliance in the world,’ and vowed to protect peace and stability across the Indo-Pacific. The optics were masterfully designed – both a reassurance to allies and a signal of continuity with the era of former Japanese Prime Minister Shinzo Abe.

Substantively, four major documents were signed:
• ‘Implementation Document toward a New Golden Age for the U.S.–Japan Alliance’ – reconfirming the July 2025 investment-and-tariff framework and directing ministries to follow through.
• Framework on Critical Minerals and Rare Earths – a joint action plan to diversify supply chains from extraction to refinement, including a ministerial meeting within 180 days.
• Memorandum on Shipbuilding Cooperation – creating a working group to expand yard capacity and introduce advanced production technology.
• ‘Technology Prosperity’ MOC – covering AI, quantum, 6G, space and fusion energy, emphasising public-private R&D and standards coordination.

During the LDP leadership race, Takaichi had campaigned on ‘revisiting the tariff negotiations,’ a stance that unsettled Washington. By reaffirming a $550 billion investment framework by Japanese companies in the US, the two governments dispelled American anxiety and demonstrated that economic cooperation – not confrontation – would define the alliance going forward.

Tokyo thus restored bilateral economic relations to a stable trajectory and rebuilt the trust underpinning the proclaimed New Golden Age. 15 large-scale projects – in semiconductors, energy, and data-centre infrastructure – were listed as candidates, though most remain ‘expressions of interest’ rather than finalised contracts. In return, Washington reaffirmed that reciprocal tariffs would be capped at 15%, providing a measure of predictability for both economies.

Notably, sensitive issues such as Japan’s defence-spending increase or coordination on Western sanctions against Russia were largely absent. Instead, the focus was on investment, formalised through a joint fact sheet summarising company-level priorities.

From this, two observations emerge. First, Trump’s attention was clearly fixed on economics rather than security. Energy discussions illustrated this: the leaders reportedly discussed Sakhalin 1 and 2 projects for oil and gas production on Sakhalin Island, with Takaichi explaining that an immediate halt to imports of Russian LNG was ‘difficult,’ while Treasury Secretary Bessent expressed hope that imports would ‘gradually decline.’ Unlike in the Indian case, Trump did not press Japan for harsher sanctions, seeing them as leverage in tariff bargaining rather than as ends in themselves – thus sparing Tokyo unnecessary costs.

On security, the Yokosuka appearance and joint statement reaffirmed the Free and Open Indo-Pacific (FOIP) vision, stability across the Taiwan Strait, and the complete denuclearisation of North Korea. The two leaders also met families of abductees taken by Pyongyang – a deeply symbolic gesture for Japanese audiences.

Overall, the visit was less about treaty-level commitments and more about clarifying political signals and consolidating bilateral stability – a pragmatic showcase of diplomacy rather than grand strategy.

Governing in Motion: Takaichi’s Domestic Balancing Act

Takaichi’s leadership has been defined by speed and decisiveness. Her immediate priority has been curbing inflation and wage stagnation. Within weeks, she moved to abolish the ‘temporary’ gasoline tax surcharge, tabling a bill and securing cross-party agreement for year-end repeal, introduced energy subsidies, and rolled out targeted support for small businesses and households.

Her governing formula – ‘short-term relief, medium-term investment, long-term fiscal discipline’ – balances populist responsiveness with technocratic control. While the Bank of Japan’s independence is formally maintained, fiscal expansion has clearly regained primacy.

On defence, Takaichi is accelerating Japan’s build up to 2% of GDP ahead of schedule, emphasising domestic production, advanced capabilities (cyber, space, long-range strike), and a 2026 revision of the National Security Strategy to reflect ‘new modes of warfare.’ Her industrial and technology policies mirror this logic: strategic investments in AI, semiconductors, quantum, biotechnology, shipbuilding and cyber. The Technology Prosperity MOC functions as the international extension of this agenda.

In energy, she has prioritised nuclear restarts, next-generation reactors, and fusion R&D – framed as both green-growth and national-security imperatives.

Politically, she governs from a fragile minority. After the LDP’s decades-long alliance with Komeito collapsed, she forged a confidence-and-supply agreement with the Japan Innovation Party (Ishin), leaving her just short of a lower-house majority. This configuration forces issue-by-issue negotiation with opposition blocs, making the supplementary budget the key test of her authority.

For now, her method is pragmatic – adopting workable proposals from outside her party. Her cabinet is unmistakably conservative. Yet three women stand at its forefront—Prime Minister Takaichi herself, Finance Minister Satsuki Katayama (the first woman ever in that post) and Economic Security Minister Kimi Onoda. The mix of experience and youth gave the line-up both gravitas and momentum, and markets read it as stable and execution-oriented, with equity indices edging modestly higher in response.

Three women now define the face of Japan’s new government – Prime Minister Sanae Takaichi, Finance Minister Satsuki Katayama and Economic Security Minister Kimi Onoda. The symbolism is striking: generational and ideological diversity wrapped in disciplined execution. Markets read the message quickly – stability with momentum – and equity indices edged higher in response.

Public opinion remains strikingly positive. Early polls show approval from 64-75%, citing her quick action on inflation and successful management of Trump’s visit. Her public image has transcended politics: ‘Sanae Fashion’ – her tailored suits and signature handbags – has become a social phenomenon, with brands selling out nationwide. The cultural aura of Japan’s first female prime minister has amplified her political momentum.

Still, the honeymoon rests on results: without tangible progress on wages, prices and industrial revitalisation by mid-2026, the same electorate could quickly turn sceptical.

From Bilateral Trust to Trilateral Strategy

The new critical-minerals framework commits both governments to convene a ministerial meeting within 180 days, effectively launching an early-2026 economic-security roadmap. Over the next quarter, Tokyo and Washington will vet projects, align financing and coordinate standards – steps that naturally invite South Korea’s participation. How and when Seoul joins will test the resilience of trilateral coordination forged at Camp David in 2023.

At the November APEC meetings, Takaichi and President Lee Jae-myung held their first bilateral, agreeing to resume shuttle diplomacy. Their once-questioned chemistry proved strong and a credible rapport was established. South Korea’s strengths in semiconductors, batteries and AI infrastructure complement Japan’s industrial base; integrating the US-Japan frameworks could minimise subsidy overlap and boost regional competitiveness.

Meanwhile, Washington and Seoul are negotiating a tariff-and-investment deal mirroring the Japan-US model. If concluded, the Indo-Pacific’s three advanced economies could move from rhetorical cooperation to structured trilateral economic security-joint offtake agreements, harmonised AI and 6G standards, and coordinated energy-grid resilience.

Security coordination will also intensify. As North Korea’s winter test cycle approaches and tensions persist in the Taiwan Strait, aligning intelligence, sanctions and exercise calendars will be essential. The FOIP language in the Tokyo statement already provides the template for that effort.

Pragmatism as the New Diplomacy

President Trump’s 2025 visit to Tokyo was both theatre and policy – a meticulously staged affirmation of alliance strength underpinned by pragmatic deal-making. By sidestepping divisive issues such as defence-spending debates or Russia sanctions and instead anchoring the agenda in trade and investment, Tokyo reassured Washington while advancing Trump’s economic priorities.

Takaichi, for her part, displayed crisis-to-opportunity management – stabilising ties with Trump, ensuring continuity in defence and projecting a modern, confident Japan. The coming quarter will determine whether these pledges translate into implementation. If Japan, the US, and South Korea can synchronise efforts in critical minerals, AI and energy supply chains, the ‘New Golden Age’ may evolve from rhetoric into an actionable framework of economic and strategic resilience – with a distinctly America-First flavour – across the Indo-Pacific.

© Daisuke Kawai, 2025, published by RUSI with permission of the author.

The views expressed in this Commentary are the author's, and do not represent those of RUSI or any other institution.

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