Tokyo Report | Diplomacy | East Asia

Beyond China and the US: How Japan is Incrementally Rebalancing Its Foreign Policy

Neither the Japan-U.S. alliance nor the Sino-Japanese economic relationship will completely unravel overnight. However, the overall trendlines have led Tokyo to seek further hedges.

Japanese Prime Minister Takaichi Sanae meets with Philippine President Ferdinand Marcos, Jr. in Tokyo, Japan, May 28, 2026.

When U.S. President Donald Trump visited his Chinese counterpart Xi Jinping for a two-day summit in mid-May, perhaps no country was watching more closely than Japan. Since at least the end of the Cold War, a core tenet of Tokyo’s geostrategic posture has been the “dual hedge,” the implicit strategy of anchoring security in the Japan-U.S. alliance while simultaneously developing strong economic relations, and at times interdependence, with China.

Over the years, both parts of the hedge have faced separate competing pressures which Tokyo has continuously had to balance. With regard to the security alliance with the United States, Japan fears both abandonment, the notion that Washington will retreat from its security commitments in East Asia, and entanglement, in which Japan is pressured into joining military action in American-led operations across the globe. On the other hand, Japan has had to insulate the development of strong economic ties with China against spillover from a politically fraught relationship that is punctuated by historical grievances, a territorial dispute, and the Taiwan question. 

Recent events have showcased the entirety of these dynamics simultaneously. In March, the entanglement question resurfaced when Trump implied Japan should send naval assets to the Strait of Hormuz – a suggestion Prime Minister Takaichi Sanae dismissed, citing the pacifist constitution. During the Trump-Xi summit, the worry then shifted to abandonment. Trump’s glowing appraisal of Xi harkened back to China’s tributary relations of old, and some of his comments underscored the growing doubt in his commitment to maintain the status quo in the Taiwan Strait. However, the summit fell short of any grand bargain between the superpowers. Furthermore, Trump apparently defended Takaichi during his conversations with Xi, assuaging Tokyo’s fears – at least in the short term. 

Relations between Tokyo and Beijing have been even more dramatic. In November of 2025, Takaichi made her now-(in)famous remarks in which she referred to a naval blockade of Taiwan as a “survival-threatening situation” that might require the mobilization of the Japan Self Defense Forces. China, which treats Taiwan as a domestic matter and rejects outside interference, mounted a furious response that has evoked the heyday of its so-called “wolf-warrior diplomacy,” with the Chinese consul general of Osaka advocating violence against Takaichi in a social media post. Beijing has also repeatedly warned about the threat of Japanese re-militarization since, invoking Japan’s imperialist past. 

Notably, the most recent political spat in the Sino-Japanese relationship has had economic effects. A call from Beijing to limit trips to Japan has led to a dramatic drop in Chinese tourism, with visits plunging 56.8 percent year-on-year in April following similar declines in previous months. China has also re-imposed an import ban on Japanese seafood and limited rare earth exports to Japan. While previous diplomatic incidents between the two countries had sometimes been accompanied by widespread boycott movements spurred by Chinese consumers, the current approach is more state-led and targeted. As a result, important sectors like high-tech manufacturing have been spared for now.

Takaichi, a noted China hawk, has refused to back down. Reading the Chinese response as an overreaction, she has played what was initially considered a political faux pas into a show of strength, a stance that helped deliver her coalition’s landslide victory in February’s elections. Most significantly, her posture translated into an effective downgrading of the two countries’ bilateral relationship as part of this year’s version of the country’s Diplomatic Bluebook. 

Still, these developments leave Japan in an awkward position in maintaining the stability of its dual hedge. The security alliance with the United States increasingly hinges on Trump’s personal disposition, while Washington’s “pivot to Asia” has been displaced by “spheres of influence” rhetoric and renewed entanglement in the Middle East. At the same time, China’s recent state-led economic pressure – downstream from its forceful political rhetoric – calls into question whether economic interests and diplomacy can be reliably disentangled moving forward. 

Of course, neither the Japan-U.S. alliance nor the Sino-Japanese economic relationship will completely unravel overnight. However, the overall trendlines have led Tokyo to seek further hedges. On the security front, Washington’s........

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