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Japan Forward
a day ago
- Business
- Japan Forward
Trade Deal Puts Japan–US Alliance on a New Economic and Strategic Footing
Japan and the United States have finalized a sweeping new trade agreement. It aims to deepen cooperation across strategic industries, including energy infrastructure, semiconductors, pharmaceuticals, critical minerals, and shipbuilding. The deal also includes an ambitious $550 billion investment framework and expanded defense procurement on the Japanese side, marking a major step forward in the two countries' push to align economic and national security interests amid global instability. A standout feature of the deal is Japan's successful negotiation of a "safety clause" that effectively grants it most-favored-nation treatment for Section 232 tariffs. These US tariffs, imposed on national security grounds, have been applied to key sectors, including steel, and are expected to target high-tech goods such as semiconductors and pharmaceuticals soon. According to William Chou, deputy director of the Hudson Institute, the clause represents a "significant development." In his response to an interview request from JAPAN Forward, Chou said the deal could secure Japan's competitive edge in sensitive industries. "It ensures Japan will always pay the lowest negotiated rate on (these) tariffs," Chou explained. That, he emphasized, is a big deal for industries like semiconductors and pharma, where even marginal cost differences affect global competitiveness. However, it remains unclear whether this clause will apply to future Section 232 actions, something both governments have yet to clarify. "This is worth clarifying," Chou said, cautioning that the scope and longevity of the clause may determine its strategic value. Another key component of the agreement is a massive $550 billion bilateral investment framework aimed at mobilizing public and private capital into critical infrastructure and industry projects in the US. But the mechanism behind the fund remains murky. "We don't have details on how it'll be operated and the timescale," Chou noted. "[US Commerce Secretary Howard] Lutnick has said that the US will decide on the projects. [Minister in Charge of Economic Revitalization Ryosei] Akazawa said NEXI [Nippon Export and Investment Insurance] and JBIC [Japan Bank for International Cooperation] will review the projects. So that still has to be worked out before we gauge feasibility." Minister Ryosei Akazawa leaves the meeting with Commerce Secretary Robert Lutnick on June 27 in Washington. (©Kyodo) A White House fact sheet highlighted projects in semiconductors, pharmaceuticals, critical minerals, and shipbuilding, all areas that align with Japan's industrial strengths and previous offers of cooperation made during negotiations. Still, the timing of the agreement has sparked political backlash in Tokyo. Prime Minister Shigeru Ishiba is facing mounting pressure from within the Liberal Democratic Party, which is reeling after losing its upper house majority. Opposition parties have seized on the lack of detail to question the government's transparency and competence. "The opposition parties are using the lack of details of the $550 billion investment fund as a way to criticize Ishiba," Chou explained. While these kinds of investment frameworks typically take time to design, that nuance doesn't always land in political messaging, he suggested. Chou also pointed to two major investment announcements, SoftBank's $100 billion commitment to the US tech sector and Nippon Steel's $26 billion expansion, as evidence of Japan's serious engagement with American industrial revitalization. However, he noted that the Japanese side missed an opportunity to highlight these moves more aggressively during negotiations. "It was surprising that Japan didn't publicize these investments more to demonstrate its FDI (foreign direct investment) leadership in the US," he said. Chou added that even if they don't end up being part of the $550 billion fund, they send a strong signal. The deal also expands Japan's military purchases from the US, with annual defense imports increasing from $14 billion to $17 billion. Although not explicitly linked to the trade agreement, the increase is seen as part of the broader trend toward integrating economic and military policy. "Now that the trade deal is done, it will be interesting to see how this might affect future dialogue regarding Japanese defense spending," Chou said. Beyond the bilateral context, Chou believes the agreement serves as a template for future US trade strategy. In particular, it may preview how Washington will approach trade relationships with partners such as the European Union and South Korea, especially those with significant trade surpluses with the US. "This Japan deal is a model," Chou argued. He tied this approach directly to broader strategic goals: "The Trump administration's aim is to collaborate with allies on greater American industrial production, economic security/supply chains, and dominance in both tech and energy." In that sense, the agreement is not just another trade deal. It is a redefinition of the economic architecture underpinning the Japan-US alliance, and perhaps a preview of how America will do business with the world in a new era of great power competition. The alignment also underscores what Chou describes as the "deep, layered, and self-reinforcing" nature of the Japan-US alliance. "Despite occasional differences, our 75-year-old alliance is more important than ever," he said. Author: Daniel Manning
Fox News
2 days ago
- Politics
- Fox News
Hamas has 'weaponized hunger,' says Rebeccah Heinrichs
Hudson Institute senior fellow Rebeccah Heinrichs discusses ceasefire talks between the United States and Hamas collapsing and growing pressure on Israel to allow aid into Gaza on 'Fox Report.'
South China Morning Post
15-07-2025
- Politics
- South China Morning Post
Is US pushing its Asian allies to do more to counter China?
Reports that a senior Pentagon official has been telling America's European allies to stay away from the Indo-Pacific may be a sign that Washington will ask its Asian allies to shoulder more responsibility for countering China, according to some analysts. On Tuesday, Politico reported that defence undersecretary for policy Elbridge Colby had tried and failed to stop Britain from sending an aircraft carrier to the Indo-Pacific. The report cited sources who interpreted the Pentagon's No 3 as 'basically saying 'You have no business being in the Indo-Pacific''. They added that he thought the United States does not 'need the Europeans to be doing anything' in the region. Liselotte Odgaard, a senior fellow at the Hudson Institute in Washington, said this might increase the pressure on US allies in the region to do more to help contain China. 'Asking Europe to leave doesn't mean they [the European countries] should not be tough on China. The US asks them to be much tougher in Europe on China with regards to export controls, their cooperation with Russia in the Arctic et cetera,' Odgaard said. 'But when it comes to [China]... the US doesn't want Europe to mess up its defence cooperation with its Indo-Pacific allies and its plans for military deterrence of China. There is a risk that Europe and Indo-Pacific allies join forces in resisting some US defence policies.'
Sky News AU
14-07-2025
- Business
- Sky News AU
China expert says Australia has 'serious and profound' problem as Beijing 'weaponises' expatriates to interfere in domestic elections
A leading expert on China has warned The Daily Telegraph that Australia has a 'serious and profound' problem as Beijing tightens its influence on local elections by 'weaponising' sections of the Australian Chinese diaspora. Senior fellow at the Hudson Institute Dr John Lee said the People's Republic of China (PLA) had spent 'enormous efforts' influencing and interfering with Australian domestic politics to advance its interests. Dr Lee, who was formerly a principal adviser on Asia to the Australian government, said the Labor Party may have benefitted from the interference, but insisted it 'creates problematic structural problems for social cohesion in Australian society and politics'. Dr Lee's comments to The Daily Telegraph come after the masthead revealed Taiwanese officials were briefed by DFAT that the CCP were attempting to influence Australian elections via the significant number of expatriated Chinese in Australia. Prime Minister Anthony Albanese is on a six-day trip to China, where he is expected to meet President Xi Jinping on Tuesday. 'There is nothing wrong with Albanese visiting China in and of itself,' Dr Lee said. 'However, Beijing views relationships with regional countries in inherently competitive terms in that its primary aim is to encourage distance or division between the US and regional allies.' Dr Lee said Australia needed to impose 'non-negotiable anchor points' with countries like China to insulate it from harmful interference and to protect its ability to make its own decisions 'in our own best interests'. 'I don't think Albanese has done that,' he said. Dr Lee said Mr Albanese's apparent enthusiasm for 'narrowing differences' with China instead of the United States was a 'radical departure' from Australian governmental tradition in upholding the ANZUS alliance. Despite Mr Albanese's efforts, there has been no 'significant lessening' in China's interference, militarily or politically, Dr Lee said. Speaking to Sky News on Monday, Strategic Analysis Australia Director Michael Shoebridge said President Xi wanted other economies to be 'much more dependent' on China's and wanted to use that economic dependence as a 'weapon'. 'Mr Albanese seems naively unaware of this and is over there trying to grow our dependency on China,' he said. Mr Shoebridge said the Prime Minister may think he had 'stabilised the relationship' with China, but as Beijing casts a shadow over Taiwan and sends three warships around Australia conducting live fire exercises, the relationship was not one 'based in reality'. 'There's growing concern and doubt about Australia as an ally and as a partner in collective deterrence of China in Washington and that doubt will be growing in other partner capitals too, like Seoul and Tokyo,' Mr Shoebridge said. 'Because while the Prime Minister talks about investing in relationships, the only relationship he's investing his personal time in is China.'
Business Insider
09-07-2025
- Business
- Business Insider
Ukraine's rapidly scaling defense industry is changing how the West thinks about future wars
In Ukraine, a defense tech revolution is helping to redefine military supply playbooks in real time. While Russia leans on the brute force of its military-industrial complex — nearly 695,000 troops, relentless missile barrages, and escalating drone strikes — Ukraine has turned necessity into invention. Its growing defense sector is producing drones, robotic land vehicles, and other advanced systems on timelines and budgets that would be unthinkable for most Western militaries. "The ability of Ukraine's industry to build drones at scale and adapt them in response to changing battlefield conditions creates a model that other militaries are striving now to follow," Bryan Clark, a senior fellow at the Hudson Institute, told Business Insider. He added: "Although the small FPV drones used by both sides may not have utility in a war against China, the approach of building systems on demand using modular components is beginning to emerge in the US industrial base as well." This transformation has been made possible by Ukraine upending traditional military procurement models. "Necessity and urgency breed true innovation," Emily Harding, vice president of the defense and security department at the Center for Strategic and International Studies, told BI. "Ukraine has found a way to upend normal cycles of development and procurement to get troops updated equipment within weeks," she added. One key aspect has been to directly connect defense startups with soldiers on the ground. "Linking companies directly with units in the field turns the innovation cycle into a flywheel — rapid feedback, adaptation, sales, and deployment to the front lines," Harding said. Doug Klain, a nonresident fellow at the Atlantic Council's Eurasia Center, argues that Ukraine isn't just catching up — it's pointing the way forward for other countries. "Where American defense producers take years to iterate and update systems based on testing before redeploying, Ukrainians are making significant updates within weeks to overcome Russian countermeasures," he said. Meanwhile, Ukraine's shift toward indigenous production is accelerating. Ukrainian President Volodymyr Zelenskyy said that roughly 40% of Ukraine's weapons now come from domestic sources — an impressive figure for a country under attack. Klain said that Ukraine is also becoming more than just the frontline of Europe's defense. "Far from being a recipient of assistance, Ukraine is a value-add," he told BI. "There is no more experienced army in resisting Russian aggression today, and its defense industry is increasingly tailored to the scale and specialties required for defending Europe." Ukrainian defense startups like TenCore — founded in early 2024 with five employees — highlight this shift. With 175 employees and projecting $80 million in revenue this year, the company has delivered more than 2,000 battlefield systems and turned down acquisition offers to remain independent. Western militaries are taking notice. Ukraine's innovative use of drones and other AI-enabled autonomous systems has "revolutionized the role these technologies play in modern warfare — from logistics to long-range strikes," Lauren Speranza, a fellow at the Center for European Policy Analysis, told BI. "Modern war between peer competitors is clearly a war of defense industrial bases as much as of men and maneuver," added Harding. "A country that cannot adapt to developments on the battlefield and sustain the warfighters is sure to lose." Even so, military experts caution against wholesale replication in the West. "Western militaries can't over-index on what Ukraine is doing in terms of specific systems because the conditions are unique," Hudson Institute's Clark said. However, he added that leveraging militarily relevant commercial technology "will be essential for gaining an advantage in the 21st century." Lessons may also extend to how future wars are conceptualized. "Ukraine has effectively replaced artillery with drones for entrenched warfare," said Michael O'Hanlon, director of research in foreign policy at the Brookings Institution. "That doesn't change everything about modern combat, but it changes a lot," he added, "and points the way to future close-in fights where drone swarms may dominate." Still, Ukraine's ability to scale remains limited by one major factor: money. With a $12 billion defense budget, officials estimate that the country's production capacity is a third of its true potential. Kyiv is now pushing to attract more Western investment and is eyeing initiatives like the EU's proposed SAFE project — a $150 billion fund designed to strengthen European defense manufacturing. "Ukraine is integral in any future European security architecture," Klain said. "It has genuine lessons to offer as we all figure out how to revitalize defense industries that just aren't up to the needs of modern warfare."
