A New Era in US-Japan Economic Relations

Every decade presents at least one occasion for a serious evaluation of the state of US-Japan economic relations. The tortured course of Nippon Steel’s acquisition of U.S. Steel and highly unusual terms imposed by President Trump, together with the recent imposition of high tariffs on Japanese exports and renewed demands that Japan contribute more to the cost of stationing American troops, prompt such an evaluation now. Whereas in the 1980s Japan was viewed as America’s greatest economic rival, today it is simply one among many countries with which the US has a trade deficit. But it is also America’s closest strategic ally in Asia in an emerging contest with China to shape the international order. Despite this strategic fit, we are now forced to wonder about the future path of US-Japan economic relations.T his talk uses Nippon Steel’s purchase of U.S. Steel as a lens to analyze the health and likely direction of US-Japan economic relations. The transaction is both significant in and of itself, and also demonstrates the important role that Japan, already the United States’ largest foreign investor, can play in helping to revitalize America’s manufacturing capacity – if it is allowed to.

Bruce Aronson is senior advisor to the Japan Center of the U.S.-Asia Law Institute and an adjunct professor at NYU School of Law. He has been a tenured professor of law at universities in the United States (Creighton University) and Japan (Hitotsubashi University in Tokyo). Prior to beginning his academic career, he served as a corporate partner at the law firm of Hughes Hubbard & Reed LLP in New York. He also served as an independent director at Eisai Co., Ltd., a listed Japanese pharmaceutical company. Professor Aronson twice received Fulbright grants to be a Senior Research Scholar at the University of Tokyo and at Waseda University, and was a Visiting Scholar at the Bank of Japan. His main area of research is comparative corporate governance with a focus on Japan and Asia. Publications include a textbook, Corporate Governance in Asia: A Comparative Approach (ed. with J. Kim, Cambridge University Press, 2019).

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