Biden moves to soothe allies in China’s shadow with Japan deal

The partial lifting of U.S. metals tariffs slapped on Japan under former U.S. President Donald Trump’s administration is the latest bid by U.S. President Joe Biden’s government to mend ties with a major ally and counterbalance an increasingly powerful China.

Biden inherited a global network of alliances that had been battered by Trump’s repeated questioning of their value to the United States, even as many saw such ties as increasingly important, given China’s growing wealth and military might.

“First, you treat allies as allies,” U.S. Ambassador to Japan Rahm Emanuel said in a phone interview Tuesday. “Second, you begin to make a down payment on both climate and standing up for a rules-based system by recognizing nonmarket forces like China have wreaked havoc.”

The deal on steel tariffs comes as the U.S. seeks to redefine its role in how trade policy is made in Asia following Trump’s rejection of the Trans-Pacific Partnership regional trade pact his country once spearheaded. While China joined the less-demanding Regional Comprehensive Economic Partnership group and is now seeking access to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Biden has so far provided few details of an Indo-Pacific economic framework meant to boost regional ties.

Biden was quick to let Japan know it was a top priority, sending his new defense and foreign secretaries to Tokyo as a part of their first overseas mission. The effort to steady the ship came after Trump tested America’s most powerful partner in Asia with threats to impose further punitive measures on Japan’s auto exports, demands it pay as much as five times more to host American troops, while accusing Tokyo of being a freeloader on national security.

“Mr. Biden and his camp have always criticized Mr. Trump’s position on trade,” said Ichiro Fujisaki, a former Japanese ambassador to the U.S. “So I think it was time that they would start to take counter-measures.”

The tariff deal came as a delegation of senior Biden administration officials led by U.S. Secretary of State Antony Blinken prepared to travel to the Pacific to meet with Japanese counterparts Friday as part of the “Quad” grouping that also includes Australia and India. Besides talks in Melbourne on offsetting China’s growing influence in the region, officials from the two countries will huddle with South Korean diplomats Saturday in Honolulu to discuss regional issues including North Korea.

A close associate of Biden and former Chicago mayor, Emanuel arrived in Japan to take up his post last month. That ended a period of two-and-a-half years with no ambassador in place following the departure of Trump ally William Hagerty, who was later elected to the U.S. Senate.

The choice of Emanuel, known for his aggressive style of politics, raised a few eyebrows in Japan and worries of fresh friction. But since coming to Tokyo, he has taken to Twitter to show U.S. support for Japan in matters such as a long-standing territorial dispute with Russia and posted photos of himself standing shoulder-to-shoulder with top Cabinet members.

The compromise announced this week would allow most steel shipments from the Asian nation to enter tariff-free for the first time since 2018 and would see the countries working together to combat Chinese trade practices they say harm the industry. Japan’s aluminum wasn’t covered by the agreement and will continue to face a 10% tariff.

Trade minister Koichi Hagiuda told reporters the move was a step forward, but added: “We will continue to press the U.S. hard for a complete resolution.”

The solution on steel, which Bloomberg News reported earlier, mirrors the accord that the U.S. reached with the European Union in October that ended punitive measures on as much as $10 billion of each other’s goods. The U.S. and U.K. last month also started talks to address tariffs on both steel and aluminum and the problem of global overcapacity.

While the U.S. and EU are seeking to leverage their deal into a broader global arrangement to address non-market excess capacity and penalize countries that don’t meet low-carbon targets for steel and aluminum, Japan isn’t joining that process at this time, the officials said.

The metals dispute started in 2018, when Trump imposed duties on steel and aluminum from its biggest trading partners, including the EU and Japan, citing risks to national security. While the EU subsequently retaliated, targeting products including Harley-Davidson Inc. motorcycles, Levi Strauss & Co. jeans and bourbon whiskey, Japan did not, focusing instead on negotiating a trade deal with the U.S. to cover some agricultural and industrial products.

The U.S. made an offer to Japan to resolve the steel dispute in December, an official with knowledge of the talks said at the time. But Tokyo was holding out for a better deal and had wanted the tariffs to be abolished completely, another official said.

The agreement came after Biden and Prime Minister Fumio Kishida agreed last month at a virtual summit to expedite talks. This week’s deal will help clear the way for the Indo-Pacific economic forum and allow focus on a so-called two-plus-two bilateral framework for economic issues, Emanuel said.

“It doesn’t mean everything’s resolved,” he added. “It’s the symbol of a significant step forward together.”