Iran And Oil Imperil Trump-japan Summit

The meeting between President Donald Trump and Japanese Prime Minister Sanae Takaichi in Washington on Thursday was meant to be a celebration involving cherry blossoms, big investment checks and an affirmation of close ties between the two allies.

The U.S.-Israeli war on Iran has scrambled that agenda.

Japan depends heavily on oil shipped through the Strait of Hormuz — the waterway that Tehran has effectively closed to international shipping since the U.S. and Israel first attacked Iran a little over two weeks ago. The Trump administration, meanwhile, has asked allies, including Japan, to send naval ships to help keep the strait open to cargo vessels.

“The Iran conflict creates an overlay of anxiety for the meeting,” said Kurt Tong, who served as deputy chief of mission and chargé d’affaires at the U.S. Embassy in Tokyo from 2011 to 2014.

Japan has so far declined to commit to helping in the strait, and Takaichi has suggested that doing so may be not be allowed under Japanese law

Trump, in turn, has expressed growing frustration with the lack of assistance from allies. He suggested in a social media post Wednesday that the U.S. may choose to withdraw from the region after it has “finished off” Iran’s “Terror State” and leave the safety of shipping through the strait to “our non-responsive ‘Allies.’” He’s likely to push Takaichi for a commitment to assist in the strait, even if he can only win a vague one.

The White House declined to comment on whether Trump will raise the issue with Takaichi.

Takaichi has pledged to bring up “the increasingly tense situation surrounding Iran” and said her top priority on the Iran conflict “is the early de-escalation of the situation,” in a press briefing Wednesday prior to departing for Washington. But she is also prepared to lay out the limitations on what Tokyo “can and cannot do” to help safeguard ships transiting the strait, the Japan Times reported Wednesday.

The Japanese government will also seek reassurance that the Trump administration doesn’t plan changes in U.S. policy toward Tokyo’s neighbor Taiwan. Over the past few weeks, the administration has gone quiet on Taiwan’s relevance to the U.S. defense strategy in the Indo-Pacific. That has stoked concern in Tokyo that the administration may be reassessing its traditional support for the self-governing island, raising the risk of conflict across the Taiwan Strait.

“Japan is really worried that there will be a U.S. policy change toward Taiwan because Japan is on the front line,” according to a person familiar with Japan’s summit planning. The individual was granted anonymity to speak candidly about diplomatic matters.

Tong argued that if it hadn’t been for Taiwan and Iran, “the visit would have been downright celebratory.” Takaichi and Trump have struck a warm relationship marked by a strong personal chemistry and a mutual desire to end Beijing’s dominance of the critical minerals supply chain. The visit is even supposed to include Takaichi’s gift of 250 cherry trees.

But Japan is one the countries hit hardest by the interruption of shipping in the Strait of Hormuz. Around 70 percent of Japan’s imported oil comes through the strait and about 6 percent of its imported liquid natural gas. Takaichi said Monday that Japan’s crude oil exports will “decrease significantly” around March 20 if the strait remains impassable.

Supply interruptions threaten Tokyo’s ability to provide adequate electrical power for both its industrial sector and Japanese consumers.

That doesn’t mean Takaichi is willing or able to help secure the strait. On Tuesday, she said Tokyo is “vigorously examining” whether the dispatch of escort vessels “is within the bounds of the law,” per the Japan Times. That hesitation likely reflects the restrictions imposed by Japan’s post-war Constitution, which forbids “armed troops to be dispatched to the land, sea, or airspace of other countries with the aim of using force.”

While Japan has deployed naval forces for anti-piracy escort operations in the Gulf of Aden off of Somalia over the past decade, the active hostilities in and around the Persian Gulf would put Japanese vessels at much higher risk of active combat.

The Japanese Embassy in Washington did not immediately respond to a request for comment on Takaichi’s latest thinking on helping on the Strait of Hormuz.

So far, Japan and other Asian nations that are facing shortages have received little guidance from the U.S. on what the administration’s goals or endgame is in the Iran war. Rahm Emanuel, who served as ambassador to Japan under President Joe Biden, argued that Trump should be ready to offer some plan to ease Tokyo’s economic pain.

“The president made a decision on Iran without consulting allies, and they're bearing the brunt of it,” Emanuel said. “So the president obviously needs to appreciate the cost that Japan will bear.”

Before the war in Iran intruded on the agenda, both sides had planned to focus largely on the economic relationship. Trump had hoped to see progress on Japanese investment commitments tied to a trade deal the two countries struck last year, while Tokyo was looking for reassurance that the agreement would remain stable and that new U.S. tariffs would not hit its export-heavy auto sector.

A White House official said the talks will focus on continued implementation of that trade deal, as well as discussions about energy, supply chains, regional security issues, and cooperation in science, technology and defense. The official was granted anonymity because they weren’t authorized to speak publicly.

Japan was the first major trading partner to strike a trade deal with the U.S. after Trump threatened economy-scorching tariffs last April. That deal, which became a model for other Asian countries, involved a massive $550 billion investment pledge that gives Trump the final say over which projects get funded.

Japan has already committed $36 billion in funding for a trio of projects that include a liquid natural gas plant in Ohio, an oil export platform off the coast of Texas and a Georgia plantproducing synthetic industrial diamond grit.

The two countries still plan to toast the next tranche which will include Japanese investment in a nuclear power plant, a copper refinery project and a deal to manufacture a Japanese-designed screen display system for use in civilian and military vehicles, the person familiar with Japanese preparations for the summit said.

Takaichi is also looking to deepen U.S.-Japan defense ties. The Japanese leader will announce that Tokyo will collaborate with Trump’s signature “Golden Dome” anti-missile defense initiative, Reuters reported last week. The two leaders will also seal a deal aimed to reduce their dependency on China’s global monopoly on rare earths and critical minerals.

At the same time, Japan is also trying to protect the economic assurances from last year’s trade deal. Tokyo has quietly pressed Washington on trade policy ahead of the meeting. Japan’s trade minister, Ryosei Akazawa, said Tokyo asked the U.S. not to include Japan in a potential tariff increase from 10 percent to 15 percent, warning that higher duties could hit the country’s auto industry.

It remains unclear whether the administration plans to move forward with the increase, although the president and administration officials have not publicly backed off the claim. The administration recently announced two separate trade investigations involving Japan and other countries, including one into unfair trade practices and another on forced labor, which could be used as the legal justification to impose higher tariffs.

Takaichi may also make the case for the U.S. to help Tokyo push back against Beijing’s monthslong targeted economic punishment that has clobbered Japan’s tourism sector, cut rare earth exports and placed dozens of Japanese companies on Chinese export restriction watch lists. Beijing launched that economic coercion campaign after Takaichi announced in November that military aggression across the Taiwan Strait could represent a “survival-threatening situation” requiring a Japanese military response. Those moves have negative knock-on effects on the Japan-U.S supply chain.

“The auto transmissions that go into cars produced in the U.S. include components manufactured in Japan made from rare earths from China,” the person familiar with Japan’s summit planning said. “Cuts in rare earths exports from China to Japan mean U.S. auto manufacturers can’t produce and that affects American jobs.”

Megan Messerly contributed to this report.