Why Japan Inc is no longer in thrall to America

One of theUS most chilling moments in America’s post-war relationship with Japan occurred in Detroit in 1982. Two American car workers clubbed a Chinese-American man to death, mistaking him for a Japanese citizen they accused of stealing American jobs. A sympathetic judge fined them $3,000, with no jail time. This outrageously lenient verdict reflected a mood that later extended to the highest level of government. Fearful of being overtaken by Japan as the world’s economic superpower, America wielded the crowbar. It imposed trade restrictions, sought to pry open Japan’s domestic markets and led international efforts to reduce the value of the dollar against the yen. Only after Japan’s asset-price bubble burst in the 1990s did America leave it alone.You would think a new bout of protectionism in America, most recently the bipartisan attempt to block Nippon Steel’s $15bn of Steel under the guise of safeguarding American jobs, would elicit a sense of in Japan. But it is more complicated than that. In recent years one of the most important strategic partnerships in the world has done a switcheroo. Japan is embracing shareholder-friendly, pro-market reforms that have long been America’s thing. America is adopting the sort of industrial policies and protectionism that once defined Japan. This reveals a lot about the contradictions America faces as it attempts to build global alliances to counter China while pursuing business autarky at home. Japan’s approach makes more sense.