By then, however, change was already happening. And far from overtaking the United States, Japan was about to fall far behind.
After President Ronald Reagan took office in 1981, the United States started pressuring Japan to open its market up to American companies and reduce the trade imbalance between the countries.
While Japan agreed to measures including a limit on the number of cars it exported to the United States, panic over Japanese trade power grew — and lawmakers on both sides demanded action.
Things quickly turned sour for Tokyo. As the yen increased in value, Japanese products became more and more expensive, and countries turned away from the one-time export powerhouse. Efforts by the country’s central bank to keep the yen’s value low sparked a stock price bubble, the collapse of which helped push the country into recession and a “lost decade.”
“The icon of modern conservatism, Ronald Reagan, imposed quotas on imported steel, protected Harley-Davidson from Japanese competition, restrained imports of semiconductors and automobiles, and took myriad similar steps to keep American industry strong,” he wrote.
Yet while Lighthizer and Trump may take positive lessons from the 1980s trade war, Beijing is also paying attention — and China’s leaders have no intention of copying Japan’s mistakes.
It blamed the US for scapegoating Japan for problems in the domestic economy, adding a “strong protectionist sentiment was the direct driving force behind the Plaza Accord.”
This has been a common theme in state media coverage of the trade war — that the US is seeking to blame Beijing for matters outside its control.
Of course 2019 is not 1985, and China is not Japan. Beijing is far stronger both economically and politically than Tokyo was in the 1980s, with Japan dependent on the United States for national security and less willing to risk Washington’s ire.
The risk in this instance isn’t of a failure to learn from history, but that both parties could take the wrong lessons.
Trump and Lighthizer, having cut their teeth in the battles against Tokyo, could assume that a similarly aggressive policy will prompt Beijing to bend to their demands. Chinese negotiators have already learned what happens when you push back against Trump, with trade talks collapsing this month after Beijing reportedly attempted to alter the deal at the last minute.
The failure of those talks led to an immediate escalation in tensions, with new tariffs imposed by both sides. This could be blamed on Beijing’s late changes, but equally on Washington’s unwillingness to negotiate.
At the same time, China’s interpretation of the 1980s could also lead it to make missteps.
On Thursday, Foreign Ministry spokesman Lu Kang said any “mutually beneficial deal must be based on mutual respect, equality and win-win outcomes.” But as many observers have noted, what China’s leaders regard as “win-win” often means a win on its terms, and a desire to avoid repeating Japan’s mistakes could result in Beijing refusing to take a minor loss that could ultimately lead to a better overall agreement.
Japan is currently celebrating the beginning of the Reiwa era, under a new emperor, a time to wipe the slate clean and start again. US and Chinese trade negotiators might be better off copying that lesson than those of the 1980s.