The United States should prioritize strengthening trade and research ties with Japan to enhance supply-chain resilience and reduce long-term economic dependence on high-risk, China-centered manufacturing networks.

Key Points

• US imports from China dropped from 7.5 percent in 2022 to 4.9 percent in 2025, signaling a significant shift in global procurement strategies.
• Despite geopolitical tensions, trade between the United States and Japan has remained stagnant, representing a missed opportunity for both nations.
• Japan ranks first globally in export sophistication and remains a top-three patent producer, offering high-quality alternatives for critical US supply chains.
• Japanese manufacturing FDI in the United States surged from 1.1 trillion yen in 2018 to 5.6 trillion yen in 2025, bolstered by a $550 billion strategic investment commitment.
• The Japanese government is establishing an Economic Security Center to help domestic firms reassess risks and reduce reliance on China-centered supply chains.

Why it Matters

• Deepening the US-Japan economic partnership provides a more secure alternative to current supply chains that often rely on indirect, China-dependent routes through third countries. By integrating trade, investment, and research collaboration, both nations can bolster their economic security while fostering innovation in critical sectors like semiconductors and energy.