During the second term of U.S. President Donald Trump, protectionist measures – including unilateral trade actions and reciprocal tariffs – have re-emerged as central pillars of U.S. foreign policy. With this fundamental structure shift in trade policy of the United States, once the preeminent champion of open markets, Japan has arrived at a critical strategic juncture. Tokyo must bolster its economic “strategic autonomy” and diversify its international economic partnerships, even as it maintains its core alliance with Washington.

To be clear, the foundational importance of the U.S.-Japan alliance remains unaltered. Strategic diversification does not imply distancing Tokyo from Washington. Rather, expanding Japan’s economic options and building national resilience alongside this indispensable alliance ultimately fortifies bilateral stability. Simultaneously, Japan must differentiate itself from Washington’s protectionist drift by steadfastly anchoring an international economic order based on predictable, rules-based trade.

Beijing views these shifts in U.S. policy as an opening, positioning itself as a defender of globalization while expanding ties across the Global South. The high-profile U.S.-China summit in late 2026 illustrated this shifting dynamic: while the spectacle drew international headlines, the meeting produced minimal structural adjustments in their underlying economic rivalry, leaving regional partners navigating persistent uncertainty.

In this volatile environment, Japan’s imperative is not to compete with China for regional hegemony. Instead, Tokyo should collaborate with a broad coalition (which includes the European Union, the United Kingdom, Australia, and key Indo-Pacific partners) to co-create an international economic climate that remains open, rules-bound, and inclusive.

CPTPP and the European Connection

The symbolic inflection point of America’s retreat from multilateral trade leadership occurred in 2017 with its withdrawal from the Trans-Pacific Partnership (TPP). Taking the helm among remaining signatories, Japan led the negotiations that brought the 11-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) into force in 2018. The CPTPP moved beyond conventional tariff elimination, introducing high-standard 21st-century discipline on digital commerce, state-owned enterprises, intellectual property, and service liberalization.

With the formal accession of the United Kingdom, the CPTPP now encompasses roughly 15 percent of global GDP. As additional economies seek entry, upholding the agreement’s rigorous standards, particularly regarding non-market policies and state subsidies, remains vital to preserving the integrity of both the accord and the broader multilateral system.

Concurrently, the institutional architecture underpinning Japan-EU ties has seen significant development. Building on the 2019 Economic Partnership Agreement (EPA), the comprehensive Strategic Partnership Agreement (SPA) is now in effect, consolidating broad cooperation rooted in shared norms. Meanwhile, following Brexit, the U.S.-UK CPTPP connection and bilateral EPAs have established a strategic alignment linking Europe and the Indo-Pacific.

This momentum reached a new milestone at the Japan-EU Summit, where both sides established the Japan-EU Competitiveness Alliance. Designed to enhance mutual resilience, this framework deepens cooperation in supply chain security, critical minerals, semiconductors, and emerging technologies, while reinforcing joint leadership to revitalize the World Trade Organization (WTO).

Constructing “Open, Predictable, and Resilient Trade”

A critical conceptual task is to refrain from casting open trade and economic security as mutually exclusive. In today’s interconnected yet fragmented economy, maintaining open markets while mitigating single-source dependencies and fortifying supply chains are complementary objectives. What Japan must advocate is not a simple return to pre-crisis free trade, but the construction of “Open, Predictable, and Resilient Trade.”

While the post-World War II economic architecture developed under American leadership, Washington’s stepping back from its traditional role is accelerating multipolarity and fragmentation. In this emerging landscape, Japan occupies a unique position.

However, Tokyo should not seek to impose its own template. Japan’s principal asset lies in its capacity to connect diverse nations across varying developmental stages, identify overlapping strategic interests, and build practical, durable coalitions.

This approach is indispensable in engaging the Global South. Rigidly demanding compliance with external standards without addressing local realities will not cultivate lasting support for a rules-based order. What is required is a pragmatic strategy that respects national sovereignty, supports tangible development needs, and delivers shared economic benefits.

By sustaining its vital alliance with the United States and preserving pragmatic economic ties with China, while simultaneously deepening multi-layered partnerships across Europe, Asia, and emerging economies, Japan can chart a stable path forward. This multi-layered diplomatic network offers a compelling alternative to stark binary choices, providing a clear compass for navigating an increasingly fractured global economy.