Promotion of the "America First" principle

President Trump emerged victorious from the 2024 presidential election, and both the House and Senate have Republican majorities. The Supreme Court also has a majority of conservative justices, creating an environment for President Trump to boldly advance his "America First" policy. Domestically, President Trump is seeking to eliminate the "Deep State" and exclude illegal immigrants from the United States. On the other hand, the Trump administration will pursue industrial policy through tariffs while neglecting global warming countermeasures.

The Trump administration will impose a 60% tariff on Chinese goods, hastening the decoupling of the US and Chinese economies, and lower corporate taxes and deregulation to attract American manufacturers back to the US from China. It will also focus on competition in high-tech areas such as semiconductors, AI, and quantum computers that can be used for military purposes. Trump's stance to raise tariffs by 10-20% on imports from allies and friends of the United States is considered to be a move aimed at reducing the trade deficit and opening up markets; hence there is room for negotiation.

While the Trump administration will promote friendly shores and welcome domestic investment from allies and other countries, Washington will not welcome acquisitions of domestic companies, as seen in the Nippon Steel Corporation's attempted acquisition of US Steel Corporation.

The Trump administration's withdrawal from the Paris Agreement will set back global warming countermeasures and increase uncertainty about the investment environment for renewable energy. While providing some protection to domestic EV manufacturers such as Tesla, it will impose high tariffs on imports via Mexico with Chinese companies in mind. On the other hand, it will work to expand fossil fuel production, not only to meet domestic demand but also to further increase exports of oil and natural gas.

The United States will backtrack on its involvement in multilateral frameworks such as the UN, the G7, the WTO, and ASEAN. The Trump administration will also consider withdrawing from the Indo-Pacific Economic Framework (IPEF), a move not conducive to market liberalization. The US will not be interested in maintaining the rule-based international order, but will focus on advancing the national interests of the US through deals.

Changes in European and Middle East policies

The Trump administration will ask Ukraine to accept ceasefire talks and shelve its NATO membership as a condition for continued military assistance. If a ceasefire is established, the Trump administration will seek to improve relations with Russia by easing economic sanctions and other measures. The Trump administration will not withdraw from NATO, but will withhold defense obligations to NATO members that do not meet its defense spending standards. Although it will maintain the current level of nuclear forces as week as naval and air forces deployed in Europe, the Trump administration will aim to drastically reduce the size of its ground forces, including marines, and will ask Europe to share more of the burden of supporting Ukraine.

In the Middle East, the Trump administration will revive maximum pressure on Iran. In addition to economic sanctions, the Trump administration will increase military pressure to curb Iran's nuclear development and halt support for proxy forces such as Hamas, Hezbollah, and the Houthis. While strengthening military support for Israel, Washington will pressure Israel for a ceasefire in Gaza and Lebanon. If Iran continues its attacks on Israel, however, the Trump administration may attack oil and nuclear facilities in Iran.

Regarding the Middle East peace process, the Trump administration will emphasize economic cooperation between Israel and the Palestinians, and will seek to mediate between the two sides in a way that also takes into account Palestinian interests, not ruling out the possibility of a two-state solution. The administration will also support the normalization of relations between Israel and Saudi Arabia, striving to build an "Abraham alliance."

Increasing competition with China

The Trump administration views China as its greatest threat and, in addition to economic decoupling, it aims to weaken the Communist Party leadership by further increasing military and political pressure. The administration will shift military forces from Europe and the Middle East to Asia to compensate for conventional inferiority, while strengthening strategic and non-strategic nuclear forces to rebuild deterrence. Latticework mini-lateral networks such as the Quad, AUKUS, Japan-US-South Korea, and Japan-US-Australia will be bolstered, and cooperation with European countries will also be pursued to deter China from changing the status quo.

The Trump administration will place importance on Taiwan as part of the defense of the first island chain, but will demand Taiwan increase its defense spending and strengthen its independent defense capability. In addition, the Trump administration will call for further transfers of semiconductor factories from Taiwan to the US and the suspension of exports of advanced semiconductors to China.

The Trump administration will seek arms control after recognizing North Korea as a nuclear weapon state, and will focus mainly on regulating the quantity of ICBMs targeting the United States. It will also seek to isolate China by improving relations with North Korea.

Relations with Japan

The Trump administration will appreciate Japan's increased defense spending and introduction of a counterstrike capability, and will follow through with the cooperative initiatives set by Kishida and Biden in command and control, integrated operations, and defense industrial bases. The modernization and expansion of nuclear forces by the Trump administration will lead to a further deepening of extended deterrence talks between Japan and the United States. On the economic front, it is highly likely that the administration will seek trade negotiations aimed at expanding exports of American agricultural products and regulating Japanese automobile exports. Although tariff hikes will temporarily stall trade between Japan and the US, direct investment from Japan to the US will further expand.

Recommendations

• Encourage Japanese investment in Alaska's oil and gas industry, with a view to building a pipeline from Alaska.
• Further expand energy imports from the US with a view to building a pipeline from Alaska to Japan, and cooperate with the US on energy security.
• Further encourage Japanese investment in the US defense industry, particularly in the shipbuilding involved in submarine construction, to help maintain the readiness of the US military.
• Strengthen cooperation between the US and Japanese defense industries, particularly in the manufacture of ammunition.
• Further relax the principle of defense equipment transfer, and establish a system whereby air defense missiles can be provided directly to invaded parties.
• Transfer some of the functions of US Strategic Command to US Forces Japan to strengthen the Japan-US extended deterrence posture.
• Create a permanent integrated Japan-US joint task force for the defense of the Nansei Islands to boost deterrence.

(November 10, 2024)