Economic And Trade Relations With Japan: Trade Tensions, Disputes, And Related Issues

Abstract

There have been serious trade disputes between the U.S. and Japan since the mid-1970s. The source of trade dispute is that the U.S. has had large trade deficits which have been caused mostly by large American imports from Japan, especially in the early 1980s when the dollar was appreciating. Since the 1980s, many disputes have arisen due at least in part, to U.S. allegations that Japanese markets are closed to imports because of restrictive practices such as exclusive dealings between domestic manufacturers and distributors. It is further alleged that the practices are tolerated and even encouraged by the Japanese government. It has long been said that the U.S. and Japan should manage their trade friction wisely, so not to embitter the overall relationship between the two countries. This is based upon recognition of the importance of the Japan-U.S. relationships on the one hand, and of the possibility of serious trade friction on the other. This precept is effective because there always remain countries that may not be able to handle it to mutual satisfaction. This paper will analyze trade disputes, tensions, and related issues between the two economic powers to reduce trade conflicts and to improve overall trade relations. Another purpose is to suggest common grounds to minimize trade conflicts between two countries.