Imagine you are in Tokyo, profoundly unsettled by the newsflow from the White House, up for a non-violent anti-American protest and considering a stint as what US President Donald Trump would label a “radical left lunatic”. You would boycott Tesla, obviously, and stick it to the man.
Provocative, as far as it goes. But is there much sacrifice in not buying a car you weren’t buying anyway? A proper radical left lunatic (RLL) will have noticed bottles of Jack Daniel’s whiskey being pulled from Canadian store shelves and concluded that a grander commercial blow to the US was out there for the (not) taking.
So how to land that blow? About a month ago, in an indelibly inked call to mass action, a small handful of Coca-Cola vending machines in Tokyo’s Shibuya district were defaced with the word “boycott”. Nothing, so far, seems to have come of the campaign, beyond an alluring thought experiment.
However unlikely a boycott by an average Japanese consumer of the US may be, a hypothetical feasibility test is hugely illuminating. It serves not just to show the relative positions of the two economies today, but as a reminder of how expertly Japan has played the tariff and non-tariff game in the past and a hint at the ideological direction that Trump and his entourage may now be striving for.
The bad news first: it is tricky for an urban, working Japanese RLL to completely cut US goods, services and commodities out of their lives. Intel and Nvidia chips have too strong a foothold on the smartphone and laptop market. Apple, Google and Microsoft cannot realistically be substituted as providers of operating systems and day-to-day software. Japan has a huge homegrown healthcare industry but you wouldn’t want to get ill as a boycotter of US drugs and medical devices. Between Japan’s two major airlines, roughly two-thirds of the current fleet is Boeing. And a consistently large proportion of Japan’s cherished staples of tofu, soy sauce, miso and natto are made with imported US soyabeans.
On the other hand Japan has, as a matter of both industrial policy and corporate instinct, made a very significant amount of hypothetical boycotting of the US relatively painless, and in some cases actively attractive.
You can, while maintaining a perfectly excellent Japanese lifestyle, avoid US processed food brands and a great deal of other food, restaurants, retailers, clothing and sports equipment. You might have to sacrifice Marvel, Star Wars and Netflix, but American music, movies, TV and other entertainment can be replaced with a rich array of domestic alternatives. Amazon is big, but has a highly competitive Japanese rival in Rakuten. Cars, trains, motorcycles, boats, construction equipment, musical instruments — all supremely doable domestically. Behind the scenes, there is also the satisfaction of knowing that Japanese production occurs with its own tools, heavy machinery, robots and specialist materials.
And that is central here. Japan has always tilted towards “full-set” production across multiple manufacturing sectors. The heavy price it has paid is an unwieldy market with over 3,750 listed companies, which desperately need consolidation and are losing the power to innovate. But it has seen itself as a permanent onshorer, and, despite the extraordinary constraints created by its lack of natural resources, it has wanted to do everything, and still (with some notable gaps) does.
Japan was not above defending that desire with protectionism, from the Seventies to the Nineties. There was an overt side that included significant tariffs, and a non-tariff side which ranged from the principle that drugs be tested on the Japanese, to the practice of cross shareholdings between listed companies that in effect shut foreign competitors out of the supply chain.
Things have hugely improved. The Japan section of America’s 2001 National Trade Estimate report on foreign trade barriers ran to 58 pages; in the 2024 edition, it merited only nine. Trump may welcome Japan’s status as the biggest supplier of direct investment into the US, but it is running a large trade surplus with America and he is of a generation that remembers unfairness, and may well have taken some lessons in how to do that bigger and better.
Where there is coherence in Trump’s emerging industrial policy, it appears to seek impossibly rapid redress for the historic offshoring and hollowing-out of US manufacturing. It will not work in the timeframe the president imagines, but he has two credible models he can consider as he attempts that: China, which is seeking ever greater manufacturing self-sufficiency higher up the technology and value chain right now, and Japan, which sought that in the past and showed the world how to get there.
leo.lewis@ft.com
