Japanese Prime Minister Sanae Takaichi faces an early leadership test in managing Trump’s concerns about Japanese investment and defense spending
President Donald Trump and Japan’s new prime minister meet this week for the first time and each has something to prove.
Sanae Takaichi’s rise to power as the country’s first female prime minister is tied, in part, to her tough persona and promises of a Japan First policy. Trump is looking to pressure Japan to spend more on its national defense and secure billions of dollars in new investments to reorient the trade relationship between the two countries.
How the two leaders navigate their first encounter could determine the tenor of U.S. Japan relations for the next three years.
“What she doesn’t want to do is give Trump a chance to push her in public on issues like trade and defense,” said Yuki Tatsumi, former special assistant for political affairs at the Japanese embassy in Washington, now senior director at the Institute for Indo-Pacific Security. ”If Takaichi can engage Trump on the agenda that she wants to talk about, which is, ‘we’re going to step up to the plate, we together will make the Indo-Pacific safer, more prosperous and secure,’ then that will be a win for her.”
Japan is America’s sixth largest trading partner and is a cornerstone of U.S. geostrategy in the Indo-Pacific through a mutual defense pact that includes American bases on Japanese soil and protection under the U.S. nuclear umbrella.
The two leaders are off to a good start in the first week since Takaichi took office. Trump, in a Truth Social post this month, praised her as a “person of great wisdom and strength.” And Takaichi’s mentor, former Prime Minister Shinzo Abe, who was assassinated in 2022, was a Trump confidant and golf buddy.
“I think they’ll get along quite well,” said a Trump adviser granted anonymity to discuss sensitive matters. “Both camps recognize that the strength of the Trump-Abe relationship came from their personal rapport, which made economic and strategic cooperation flow much smoother.”
It will help, too, that Japan is readying a purchase package for Trump’s arrival, including buying American liquefied natural gas, pick-up trucks and soybeans, Reuters reported Tuesday. Japan’s corporate sector is also stepping up. Tokyo Gas has inked an agreement on possible LNG purchases from Trump’s signature $44 billion Alaska LNG project, Nikkei Asia reported Friday. That deal appears aimed to support Trump’s pledge in February that Tokyo “will soon begin importing historic new shipments” of Alaskan LNG.
Takaichi and Trump will also sign an agreement for U.S.-Japanese cooperation in areas including the development of next generation wireless standards and artificial intelligence, Nikkei Asia reported Saturday.
Trump was especially pleased to hear that Takaichi plans to buy Ford F-150s.
“She has good taste,” Trump said Saturday aboard Air Force One. “That’s a hot truck.”
He is also looking for ways to help American soybean farmers devastated by China’s decision not to import the crop from the U.S. as part of its trade war with the United States.
“There’s a lot of effort being put into having a few headline announcements to create some momentum behind the whole thing,” said Kurt Tong, deputy chief of mission and chargé d’affaires at the U.S. Embassy in Tokyo during the Obama administration. “The Takaichi government wants to show progress on this in order to reassure the U.S. that they’re sincere by having some specific deliverables that could be announced in the billions of dollars.”
But there are still plenty of areas where the two leaders could clash.
Takaichi said last month that she would consider renegotiating an agreement brokered by her immediate predecessor to steer $550 billion in Japanese investment to U.S. projects if she judged it unfair to Japan. The funds represent more than 10 percent of Japan’s GDP.
She later walked back that threat. Still, Trump — who compared that money to a professional baseball player’s “signing bonus” and said it’s “our money to invest, as we like” in a CNBC interview in August — may press her to start immediately channeling those funds to the U.S.
The plan for how the administration will disburse that money “is still being finalized,” said a White House official granted anonymity due to the sensitivity of those discussions.
But Takaichi cannot afford to be seen domestically as caving to Trump. She and her Liberal Democratic Party are weaker politically than when she emerged as the front runner to replace Shigeru Ishiba. The right-leaning Japan Innovation Party that forms the backbone of the LDP’s political coalition is fiscally conservative and will be wary of seeding that investment fund when Japan is struggling with high inflation and slumping wages.
That leaves the new prime minister without much political room to maneuver. She cannot afford to upset her fragile governing coalition by giving in to Trump, nor can she afford to alienate the U.S. president by standing up to him.
Takaichi needs to tiptoe between Trump’s perception of the investment deal as a no-strings-attached cash machine for the White House and Tokyo’s view that it’s more a blend of Japanese government-backed loan guarantees and select corporate financing.
The Japanese embassy declined to comment.
Japan’s defense spending is another potential irritant that could sour the Trump-Takaichi meeting. The Trump administration has suggested that Tokyo’s pledge to increase defense spending to 2 percent of GDP, from a current level of around 1.8 percent, by 2027 is inadequate. The Trump administration urged Japan in June to raise that spending to 3.5 percent of GDP.
“Japan has long underemphasized spending for its own defense,” John Noh, the nominee for assistant secretary of Defense for Indo-Pacific security affairs said at his Senate confirmation hearing this month.
Takaichi is no dove. She is a longtime supporter of boosting U.S.-Japan defense ties to offset Beijing’s increasingly aggressive regional footprint. She has argued for a rethink of Japan’s defense strategy through initiatives including revising Japan’s constitution to loosen restrictions on military deployment and suggesting that the U.S. deploy nuclear weapons on Japanese territory to deter potential attacks by China or North Korea.
But her relative political weakness limits her ability to push for higher military spending at the expense of programs such as government support for Japan’s ballooning elderly population.
Takaichi has tried to preempt Trump’s possible criticism of what Tokyo spends on its defense by announcing Friday that her administration will advance to March 2026 the deadline for that 2 percent defense spending.
She also pledged Tuesday that her administration “will create a system that allows Japan to defend itself independently.” That’s a reference to the 55,000 U.S. military personnel stationed in Japan.
The meeting could get ugly if Trump rejects that spending target as too low and opts to employ the same hardball tactics he has applied to NATO members to push them to agree to raise their defense spending to 5 percent of GDP. Thirty-one of the alliance’s 32 members agreed to that spending increase in June. Trump accused Spain,the one NATO member refusing to raise its defense budget to that level, of getting a “free ride” in the military alliance.
Takaichi will need to make the case to her electorate that higher military spending is needed to avoid Trump’s potential wrath, said Ken Weinstein, who served as U.S. ambassador-designate in the first Trump administration.
“It will require open and frank conversations with the Japanese public about security in the Indo-Pacific,” he said. “She needs to focus on the dangers from China and the threat from North Korea to make the case that there’s a real need for this kind of a build-up.”
Grace Yarrow and Ben Lefebvre contributed reporting.