In October 2025, Japan entered a new era of leadership and international engagement as Sanae Takaichi was sworn in as the nation’s first female prime minister. Her historic appointment immediately drew global attention, not only for breaking a significant gender barrier but also for signaling a conservative and assertive approach to Japan’s foreign and economic policies. Within days, the world watched as Takaichi welcomed U.S. President Donald Trump to Tokyo. The visit was celebrated by both governments as a demonstration of the “golden age” of the U.S.-Japan alliance, according to the European Council on Foreign Relations (ECFR), and set the tone for the months that would follow.
The Trump-Takaichi meeting was more than a symbolic gesture. It quickly became clear that Takaichi intended to accelerate Japan’s defense spending, economic security initiatives, and ideological alignment with Washington. Her policies, rooted in a continuation of Shinzo Abe’s “strong Japan” doctrine, blended security hawkishness with economic nationalism and self-reliance. As ECFR reports, Takaichi’s government wasted no time: the first supplementary budget included allocations for hypersonic missile defense, cyber capabilities, and defense-industrial partnerships. Notably, she brought forward Japan’s target of spending 2% of GDP on defense to 2027—two years ahead of schedule.
On the economic front, Takaichi’s approach was equally bold. The Trump-Takaichi summit culminated in a new document committing both countries to the steady implementation of trade agreements, building on a deal earlier in 2025 that had already established a baseline 15% tariff on most Japanese imports to the U.S. In return, Japan pledged approximately $550 billion in investments targeting American sectors like semiconductors, energy infrastructure, and manufacturing. As a gesture of deepening bilateral ties, Takaichi expanded preferential market access for Japanese automakers and semiconductor firms, while opening Japanese public procurement to select U.S. defense and digital infrastructure companies under new regulatory oversight structures.
One of the most significant developments was the announcement of a bilateral agreement on critical minerals. This deal aimed to secure joint stockpiles of rare earths, lithium, and cobalt, with an emphasis on U.S.-Japan joint ventures for processing facilities in countries such as Australia and Indonesia. Trump hailed the agreement, stating, “our allies are our supply chains,” a sentiment echoed in Japanese government statements. For Japan, the deal secures critical inputs for its burgeoning battery and defense industries. For Washington, it reassures that Tokyo is a reliable partner in efforts to de-risk supply chains from China—a strategic priority for both countries.
Yet, as ECFR notes, the new U.S.-Japan framework risks overshadowing the 2023 EU-Japan critical raw materials partnership, which was designed to diversify both sides away from Chinese dependencies. The July 2025 EU-Japan summit had envisioned a “competitiveness alliance” to coordinate industrial policy, expand research cooperation, and initiate negotiations on an information-security agreement for defense technology and cyber projects. But with Tokyo’s bandwidth increasingly absorbed by Washington’s gravitational pull, the window for deeper EU-Japan cooperation may not remain open indefinitely.
Despite these challenges, there remains fertile ground for Europe and Japan to deepen their partnership. Both are advanced industrial economies with a commitment to democratic governance, open trade, and global standards. The institutional scaffolding for cooperation—the 2019 Strategic Partnership and Economic Partnership Agreements—remains in place. As ECFR argues, the EU should not only treat Japan as a partner in multilateralism but also as a key pillar of its competitiveness and security agenda. Operationalizing the economic security commitments from the July summit—such as a joint EU-Japan critical minerals corridor, harmonized ESG standards, and co-development of mining and processing projects—could help Europe remain relevant in Tokyo’s evolving resource diplomacy.
On the security front, Takaichi’s accelerated rearmament and increased defense spending are creating new opportunities for European industry. The push to reach 2% of GDP on defense by 2027 will require new procurement channels and co-development partnerships. As ECFR suggests, European firms could find meaningful roles in areas like electronic warfare systems, satellite communications, and maintenance for defense equipment already operated by Japan. The burgeoning EU-Japan information-security agreement could provide the legal foundation for such exchanges, allowing for deeper strategic alignment without encroaching on sensitive areas involving U.S. cooperation.
Meanwhile, Takaichi’s government has inherited a cautiously improving relationship with South Korea and is expanding security dialogues with Britain and Australia. Europe is encouraged to engage these networks through minilateral formats—such as EU-Japan-South Korea on economic security or EU-Japan-UK on maritime and cyber resilience. This approach aligns with Tokyo’s preference for “networked deterrence,” meaning flexible, multilateral, and technology-enabled defense coalitions.
According to The Diplomat, there are notable vectors of continuity and change in the U.S.-Japan alliance. While economic matters have taken precedence and differences over tariffs and trade orders are more visible, the security relationship remains robust. Japan continues to act as a guardian of the free and open Indo-Pacific order, advocating for multilateral initiatives like the CPTPP—even though the U.S. does not formally participate. The alliance continues to prioritize security cooperation to counterbalance and deter China, with Japan building layers of security frameworks that go beyond sole dependence on the U.S.
Dr. Jeffrey Hornung, a senior political scientist at the RAND Corporation, outlined five areas where the Japan-U.S. alliance could shape Indo-Pacific regional dynamics: capacity-building of regional states, deepening minilateral groupings, responding to countries in need through aid, energy security cooperation, and defense industrial cooperation. For instance, the Japan-U.S. Energy Security Dialogue provides a venue to strengthen energy security, accelerate clean energy transitions, and diversify supply chains for critical minerals and technologies—a priority as both nations seek to reduce vulnerabilities to global supply chains dominated by China.
Domestic political challenges persist for both Tokyo and Washington. In the U.S., Trump’s broad-ranging agenda has not always enjoyed universal support, and his administration has yet to articulate a comprehensive Indo-Pacific or China strategy. This lack of clarity sometimes leaves Japan without a consistent message from Washington, potentially opening the door to friction. For Takaichi, despite high approval ratings, her party’s recent electoral setbacks mean she must shore up voter trust by focusing on domestic “bread-and-butter” issues. Any perception that she is neglecting these in favor of geopolitical initiatives could threaten her administration’s longevity and limit her political capital for new projects.
All told, the U.S.-Japan alliance stands at a crossroads. The two countries are in strong alignment on strategic issues and have demonstrated an ability to leverage their partnership for regional and global impact. Yet, as both ECFR and The Diplomat note, the ability to turn these strengths into concrete results may prove difficult unless both sides are able to balance domestic demands with ambitious international goals. For Europe, the challenge is to seize the momentum from the July summit and embed itself in Japan’s new policy architecture through bankable projects and strategic alignment. Failing that, Brussels risks being sidelined as Japan becomes more deeply enmeshed in a U.S.-led economic and security bloc.
Japan’s new era under Takaichi is one of opportunity and risk, with the nation poised between its traditional partners and new priorities. The choices made in Tokyo, Washington, and Brussels in the coming months will shape not only Japan’s future but also the broader dynamics of the Indo-Pacific and beyond.
