Eight decades since the end of the Second World War, the US-Japan alliance continues to evolve beyond its Cold War foundations.

On September 2, 1945, on the deck of USS Missouri, Imperial Japan surrendered to Allied forces, marking the end of the Pacific conflict that had started in 1931. The gaunt cheeks of US Army General Jonathan Wainwright, who had surrendered his forces to the Japanese in the Philippines in 1942 and endured three years of captivity, bore witness to the vicious and primal conflict that the historian John Dower described as a “war without mercy.”

Looking to the future, Supreme Allied Commander General Douglas MacArthur addressed the ceremony: “It is my earnest hope…that from this solemn occasion a better world shall emerge out of the blood of carnage of the past…a world dedicated to the dignity of man and the fulfillment of his most cherished wish—for freedom, tolerance, and justice.” As Japan lay in ruin after two nuclear attacks and countless firebombs, one wonders how much faith the stiff, morning-suited Japanese delegation had in MacArthur’s words.

In the eighty years since that day, the United States and Japan have lived up to MacArthur’s hopes. From victor and vanquished in 1945, the two countries have become military allies, economic competitors, teachers to each other, and finally, global partners in an uncertain world. None of this was preordained. Rather, their deeply entwined diplomatic, military, economic, and cultural histories of the past eight decades forged what former Ambassador Mike Mansfield has lauded as “the most important bilateral relationship in the world, bar none.”

Post-War Reparations, Reforms, and Recovery

After a vicious war that devastated much of Asia, numerous American leaders were eager to ensure that Japan would never again undertake aggression. Some American officials called for reparations. President Truman appointed a commission that would designate and ship portions of Japan’s industry to formerly occupied Asian territories as reparations.

Others, such as General MacArthur and his Allied occupation staff, attributed the war to Imperial Japan’s “feudalist” political structure. Though they retained Emperor Hirohito as a point of Japanese national unity, occupation officials sought to remake Japanese life completely by giving women the vote, undertaking land reform, and permitting labor unions. Most significantly, the occupation shaped and supervised the new Japanese constitution, which included the now-renowned Article 9, which renounced “war as a sovereign right of the nation and the threat or use of force as a means of settling international disputes.”

Growing Cold War tensions with the Soviet Union and the Korean War in 1950 would shift American priorities for Japan. Rather than comprehensive reparations or reform, American officials in Tokyo and Washington sought to make Japan the political and economic hub of anti-communism in Asia. Doing so entailed developing Japanese military and economic strength. As early as 1948, the US encouraged Japan to repeal Article 9. Though that effort failed, the two countries became treaty allies in 1952, and Japan created the Japan Self-Defense Forces (JSDF) in 1954. To rebuild Japan’s economy, the United States facilitated Japan’s return to the international economic community by sponsoring its 1955 entry to the General Agreement on Tariffs and Trade.

Japanese Economic-Cultural Engagement with the United States

Japanese government and business officials embraced this new Cold War paradigm of allying with the United States and rebuilding the Japanese economy. This became known as the “Yoshida Doctrine,” named after Prime Minister Shigeru Yoshida (1948–1954), which his successors continued in various ways through the end of the Cold War. Post-war economic recovery unexpectedly fostered business, cultural, and person-to-person relations that enriched the bilateral relationship.

During the 1950s, Japan’s Ministry of International Trade and Industry (MITI) worked with industry to rebuild the Japanese economy. Through MITI’s control of the Development Bank of Japan, it directed capital towards foundational heavy industries, including steel, electric power, and coal. These industries subsequently provided the materials and energy needed by higher-value sectors, such as automobiles, electronics, and shipbuilding, which were then exported in exchange for US dollars and other foreign currencies that Japan needed to pay for its imports of oil, coal, and iron ore.

Dependence on overseas markets meant that industrial production alone was insufficient to ensure Japan’s post-war economic recovery; export goods also had to be appealing. This was a challenge, as Japanese goods during the prewar and immediate post-war periods usually consisted of inexpensive and poorly made items, such as Christmas lights and paper umbrellas for tiki drinks.

In response, the Japanese government and business, with support from Washington, pursued initiatives in the 1950s to improve the quality of Japanese goods. Between 1955 and 1961, the Japan Productivity Center dispatched 3,987 observers to study American industrial business techniques. The Union of Japanese Scientists and Engineers, motivated by American industrial engineer W Edwards Deming, pioneered quality control techniques. 

Similar efforts were also underway at Toyota, where Taiichi Ohno experimented with processes that would later become known as “just-in-time production.” The quasi-governmental Japan External Trade Organization (JETRO) established offices across the United States to promote Japanese exports as technologically sophisticated and of high quality. These collective efforts achieved results: a JETRO survey from the 1968 Ohio State Fair reported that Japanese goods had lost their earlier reputation for low quality.

Japanese businesses also realized that their goods had to adapt to the tastes and needs of the US market. Much of this was done through trial and error. Toyota and Nissan both made forays into California in the late 1950s, only to discover that their cars were too slow and insufficiently durable for American highways. In other cases, the Japanese and Americans developed effective partnerships. 

Honda’s success in the 1970s owed a great deal to the practical, anti-consumerist tone of its advertising firm, Needham Harper. Professional photographers favored Nikon cameras because the company solicited and incorporated technical input from camera dealers and photojournalists. Over time, these successes meant that Japanese goods became fixtures in everyday American life and culture, as exemplified by Marty McFly’s Toyota pickup truck in the film Back to the Future (1985).

Fear, Learning, and Friendship in the US-Japan Alliance

These efforts, along with the global economic boom, meant that by the end of the 1960s, Japan had become the second-largest economy in the world. Some observers, such as Hudson Institute founder Herman Kahn, predicted that Japan would be the next economic superstate. However, increasing numbers of Americans grew concerned about Japan’s economic success. The prevalence of Japanese cars and electronics sparked American fears of deindustrialization and unfair competition at a time of political cynicism and economic stagnation. Some of this dynamic was natural: Japan’s wartime devastation meant its steel mills and automotive plants would be newer and more efficient. But this failed to comfort American businesses and workers, who saw Detroit automakers in the doldrums and Chrysler needing a bailout.

The debate of what to do with Japan, America’s most important security ally but its largest economic competitor, reached a fever pitch as President Ronald Reagan entered office in 1981. He walked the security-economic tightrope using a combination of hard-nosed dealmaking and personal diplomacy. The Reagan administration compelled Japanese automakers to agree to voluntary export limits and to invest in American plants by threatening harsher import quotas, domestic parts content requirements, and currency revaluation. The president’s pressure turned Japan, the second-largest economy in the world but only the sixth-largest investor in the United States in 1979, into the largest foreign American investor, reaching $820 billion in 2024.

Simultaneously, American industry tried to learn from its Japanese competitors. American automakers dispatched teams to Japan to study their automaking processes. General Motors took it a step further by creating a joint venture with Toyota in California. This allowed the Detroit carmaker to study Toyota’s vaunted manufacturing and logistical techniques firsthand, while its Japanese partner acclimated to the American market, suppliers, and labor. Sales of books on Japanese management and manufacturing techniques boomed. W Edwards Deming had a second career as a productivity guru who had “taught” quality control to the Japanese.

Diplomatically, Reagan’s close friendship with the dynamic Yasuhiro Nakasone, who served as prime minister between 1982 and 1987, helped reinforce the alliance. In 1982, when the Soviets offered to move their SS-20 nuclear missiles out of Europe—but potentially to Asia and targeting Japan—Nakasone protested. At the 1983 G7 meeting, Reagan refused to accept any Soviet missile deal that did not include Asia. He also identified Japan as part of the broader Western security alliance. At his Diet speech later that year, Reagan praised Japan’s post-war recovery, downplayed the two nations’ cultural differences, and celebrated their shared values of determination, liberty, and progress. Nakasone, who had bet his political career on a strong relationship with Washington, began dismantling many of MITI’s 1950s-era protectionist barriers, thus expanding the Japanese market to foreign competition.

Japan’s “Lost Decades” and Return to Relevance

However, Japan’s 40-year economic boom ended in 1991, creating cascading effects on its role in the world and its relationship with the United States. The trigger marked the collapse of Japan’s bubble economy, which had included inflated real estate and stock prices. Japanese banks overextended bad loans to non-performing and overvalued assets that could not be repaid, leading to bank failures. Deflation seized the economy, which over time shrunk Japan’s GDP, wages, research and development, and other investments. Combined with aging demographics and shocks including the Asian Financial Crisis of 1997, the Great Recession of 2008, and the Tohoku Earthquake of 2011, Japan’s share of the world’s nominal GDP fell from 17.8 percent to 3.7 percent between 1995 and 2024.

Japan’s political and overseas challenges mirrored its economic difficulties. Domestic politics became unstable as political leadership failed to solve the stagnant economy. Between 1991 and 2012, only two prime ministers were in office for longer than two years. Diplomatically, other countries saw Japan as an economic superpower that punched far below its weight. When Article 9 prevented Tokyo from sending forces during the First Gulf War, Japan sent $13 billion to support the American-led multinational force. Foreign countries ridiculed Japan’s “checkbook diplomacy,” an embarrassment that the Kuwaitis exacerbated by ignoring Japan in their public thanks for their liberation.

For many foreign observers in the early 2010s, Japan appeared to be trapped in an irrelevance death spiral. One prominent think-tank expert complained privately, “I’m tired of working on Japan. Nothing ever changes, and it’s boring.” Though the American cultural fascination with Japan continued, interest in Japan faded in Washington and academia, where young, ambitious researchers were advised to study China instead.

However, Prime Minister Shinzo Abe, especially in his second term (2012–2020), emerged as a transformational leader who embraced Japanese global influence and the US alliance. Abe believed Japan’s power stemmed from its economy. Accordingly, his advisors implemented a program that utilized financial tools such as negative interest rates and quantitative easing to mitigate Japan’s deflationary pressures and stimulate economic growth. 

Abe also looked abroad for economic stimuli, passing corporate governance reforms and retirement investment programs that welcomed foreign capital. Finally, Abe encouraged foreign tourism, with overseas visitors growing from 8.36 million in 2012 to 36.87 million in 2024. Foreign visitors’ spending functioned as export earnings, but tourism also created a new generation of cultural and person-to-person engagement between Japan and the United States.

In diplomacy and security, Abe made Japan an influential player on the world stage. Though he failed to repeal Article 9 from the constitution, his government passed legislation in 2015 that permitted the JSDF to operate overseas for “collective self-defense” with allies. This shift, along with Prime Minister Fumio Kishida’s (2021–2024) national security initiatives, expanded the scope of JSDF activity, strengthened coordination with the United States, and fostered new security and technological partnerships with like-minded countries. 

These actions enhanced Japan’s seriousness about security and strengthened Abe’s collaboration with President Donald Trump in creating lasting regional partnerships, including the Quadrilateral Security Dialogue and the Free and Open Indo-Pacific concept, which advocates for a rules-based order as the best pathway to security and prosperity for the region.

Toward a Global US-Japan Partnership and the Next Eighty Years

In his speech to Congress in April 2024, then-Prime Minister Kishida declared that Japan was a global partner for the United States, dedicated to a free, secure, and prosperous world. A year later, Prime Minister Shigeru Ishiba’s government concluded a trade agreement with the Trump administration in which Japan would invest $550 billion in the United States, focusing on shared economic security priorities such as critical minerals, shipbuilding, and semiconductors. 

With potential flashpoints in the Taiwan Strait, the South China Sea, and China’s continued unfair trade and technological practices, Japan’s considerable security and economic capabilities, as well as its shared values, make it America’s most important ally. At the same time, Americans and Japanese are bound together through business, cultural, and person-to-person ties that are evident in our consumer culture, tourism, and educational exchanges.

No one on the deck of USS Missouri anticipated the multidimensional US-Japan relationship 80 years ago, but it was no accident. Cold War needs may have brought the two countries together militarily and economically. Yet these encounters also created interpersonal relationships, business competition, mutual learning, and occasional diplomatic exasperation. Their decades-long interactions have created an inseparable, layered, and complex partnership that will continue to evolve as both countries navigate future opportunities and challenges together.