How does it end when the world’s biggest economy takes on the second biggest? Ask Tokyo – 30 years on, it is still reeling from the experience
U S President Donald Trump doesn’t have the most consistent political views – but when it comes to trading with Japan, his protectionist outlook has remained virtually the same for decades.
During the 1980s, Japan’s staggering rise into a potential economic superpower, threat and successor to US global hegemony greatly irked the man who would go on to become the 45th American president.
Appearing on The Morton Downey Jr Show in 1989, Trump said of Japan, America’s largest overseas trading partner at the time: “They have systematically sucked the blood out of America. They have got away with murder… We have to tax the hell out of them.”
For years, America had found Japan’s protectionist import strategies vexing. Since the late 1970s, the administration of Jimmy Carter had been looking for ways to open up the Japanese market, and when Ronald Reagan took over in 1981, he sought to do the same and lower America’s trade deficit with it.
Japan back then exported automobiles, auto parts, office machinery and other electronics to the US. Cars comprised the majority of goods – by 1981,1.8 million Japanese-made cars were sold in the US, while only 4,201 US cars were sold in Japan that same year, according to a 1982 Washington Post report.
That year, with the US economy mired in recession, one of the new president’s first trade tactics as part of “Reaganomics” was to limit the number of Japanese car imports. But by 1983, American trade deficits with Japan totalled US$36.8 billion, up from about US$15 billion the year before.
The period saw the return of “Japan-bashing” that had reached its peak during the second world war.
Kristin Vekasi, a political economist specialising in Northeast Asia, described it as a time of negative sentiment towards the country, with calls of “boycott Japan”.
“Japan-bashing was about saying bad things and calling Japan nasty names. But there was also literal Japan-bashing – people taking hammers and smashing Japanese cars on the streets,” the University of Maine academic said.
In 1985, threatened with more widespread tariffs, Japan acquiesced to its main trade partner and security ally’s demands; in the Plaza Accord signed in September, the US, Japan, France, West Germany and Britain agreed to jointly intervene in the foreign exchange markets to depreciate the US dollar against the yen as well as against the German mark.
