Economic ties between Japan and the United States, strong since the nineteenth century, became critical in the post–World War II era.
Since Commodore Matthew Perry’s visit in 1853 ended Japan’s self-imposed diplomatic seclusion, the United States has always played a critical role in Japanese history. The United States served as a model for Japan as it adopted modern science and technology and introduced Western-style social institutions through the late nineteenth century. In the first half of the twentieth century, the two nations competed and cooperated in the evolving international relations of the Far East. Their economic ties grew steadily, even as diplomatic relations deteriorated over Japan’s colonial designs for the Asian mainland in the 1930s. Japanese labor migration to Hawaii and the U.S. West Coast also contributed to the development of the regional economy and society. By the 1940s, trade with the United States accounted for nearly 30 percent of Japan’s foreign commerce, and Japanese textile exports to the United States triggered a prominent prewar bilateral trade dispute.
U.S.-Japan economic interdependence grew exponentially after World War II ended in 1945. The United States, as the dominant member of the Allied Occupation authorities, instituted wide-ranging social and political reforms in Japan and laid the foundation for future economic growth and social vitality. With the onset of the Cold War, the U.S. government put a premium on economic rehabilitation over punishment and supported Japan’s reintegration into the West ern, capitalist world. American military spending and procurements associated with the Korean War (1950–1953) were a boon to Japan’s recovery, and by the late 1950s it had embarked on a path to sustained growth. It is less well known that Japan also became the best customer for American agricultural products in the post-war period.
Because of its unprecedented prosperity and increasing middle-class purchasing power, the United States provided large, relatively unrestricted markets for a growing number of Japanese manufactured goods, beginning with labor-intensive consumer and capital goods in the early postwar period and moving to more capital- and technology-intensive exports after the 1970s. As the American economy lost its overwhelming superiority, U.S.-Japanese relations became plagued by chronic disputes over Japanese trade surpluses and Japan’s restrictive markets for foreign goods and capital. The two nations worked out a variety of political instruments to amelionate the problem using international organizations (the General Agreement on Tariffs and Trade and the International Monetary Fund), Group of Seven (G-7) summits, and bilateral negotiations, and private-sector forums such as the U.S.-Japan Business Council.
Early in the postwar period, the United States tended to tolerate Japan’s restrictive trade and investment policies to advance Cold War strategic objectives. After the late 1950s, the basic tenet of U.S. policy reversed and Japan came under accumulating U.S. pressure to open its markets and modify its internal economic structures. The Structural Impediment Initiative, launched in 1989 by mutual agreement, targeted various aspects of the Japanese state and society, such as domestic distribution systems, land prices, and business practices. In the post–Cold War era, the United States and Japan diverged on many issues concerning the Asian regional economy, as illustrated by their disagreement over a response to the 1997 Asian currency crisis.
Sayuri Guthrie-Shimizu
See also: Automobiles.
Price, John. Japan Works: Power and Paradox in Postwar Industrial Relations. Ithaca: ILR Press, 1997.