China, Japan, and South Korea held high-level talks on Saturday in Tokyo to deal with what’s coming from Washington. Trump is back in office, and he’s about to slap new tariffs on April 2.
That’s less than two weeks away. So the foreign ministers of the three biggest economies in East Asia got together to figure out how to respond. They met in person, with tensions up and trade pressure growing fast.
Wang Yi, who leads China’s foreign affairs, said, “China, Japan and South Korea have the need and responsibility to further strengthen communication with each other, enhance mutual trust and deepen cooperation.” He said this after the trilateral meeting, which took place at Japan’s foreign ministry offices.
Takeshi Iwaya from Japan and Cho Tae-Yul from South Korea were both there with him. This wasn’t some diplomatic courtesy call. They wanted to lay the foundation for a future summit between their leaders. But time is running out. The global economy is still struggling, and Trump’s next round of tariffs is right around the corner.
Ministers avoid naming tariffs but try to calm trade fears
The agenda didn’t include Trump’s tariffs officially, according to Japanese officials, but they knew it would come up. Wang didn’t mention them by name, but he said, “We uphold multilateralism and free trade, and strive to develop economic blocs and globalization in a more inclusive direction.”
That line was aimed at the U.S. without actually calling them out. The Japanese foreign ministry said ahead of the meeting that they would focus on regional cooperation and North Korea, but it was clear everyone had Washington on their minds.
China and Japan also used Saturday to restart direct economic talks. That hadn’t happened in six years. Those talks happened the same day, showing how urgent things are. Beijing and Tokyo haven’t exactly been friendly.
China banned seafood imports from Japan after the Fukushima nuclear plant started releasing treated wastewater. The ban is still in place. They’re also locked in a territorial fight over disputed islands in the East China Sea. Both sides have had ships and planes patrolling that area.
But they can’t afford to break ties. Japan still needs China. China is Japan’s top trading partner. Japan’s companies are deeply tied to the Chinese market. Even as tensions grow, big firms still make money there. Norihiko Ishiguro, the chairman of the Japan External Trade Organization, said, “Large Japanese companies are still making profits from China, so Japan has no choice but to continue to do business with China.”
He said that while addressing concerns that Japanese firms are losing confidence in China. Surveys from late 2024 showed more Japanese companies were becoming cautious. Geopolitical risks, tighter regulations, and stiffer competition from Chinese firms are pushing Japanese firms to reconsider their exposure.
Japan’s foreign ministry confirmed the Fukushima issue and the general business climate in China were both on the table in the Saturday talks. Iwaya made it clear earlier in the week that Tokyo wanted results. “I look forward to taking this opportunity to work with China to reduce our issues and concerns step by step, while increasing areas of cooperation and collaboration,” he said.
China and Japan’s past keeps coming back in today’s tensions
The talks happened in a region where old wounds never fully heal. Japan and China have centuries of rivalry behind them. They shaped each other’s cultures and economies, but they also fought bloody wars. Japan invaded parts of China in the early 20th century. The massacre in Nanjing is still remembered in China. That history makes it hard for the two sides to fully trust each other, especially when military tensions rise.
Xi Jinping has increased China’s defense spending since taking office in 2013. That number has doubled in 10 years, based on data from the Stockholm International Peace Research Institute. Japan answered with a military expansion of its own. In 2022, Tokyo launched a five-year plan to increase defense spending to 2% of GDP. That plan costs about ¥43 trillion, or $273 billion. After the war, Japan relied on the U.S. for security. That’s still the case today, but Washington has started to support Japan building up its own forces—especially to counter China’s military activity near Taiwan.
Tokyo says Taiwan’s security affects Japan directly. In 2022, Japan accused China of firing ballistic missiles into Japan’s exclusive economic zone. That happened during Beijing’s military drills near the Taiwan Strait. Chinese coast guard ships and fighter jets have been moving near the disputed islands Japan controls in the East China Sea. China says those islands are theirs. Japan’s defense ministry responded by adding more missile bases in that area. Their concern is clear: if conflict breaks out over Taiwan, Japan could get pulled in fast.
China’s growing cooperation with Russia is also making Japan nervous. The two countries have held joint air and sea drills near Japan. In August 2024, a Chinese military plane entered Japanese airspace. Tokyo responded immediately with a formal protest. But China pushed back too. They claimed a Japanese destroyer had entered their territorial waters in July. This kind of back-and-forth is happening more often.
Japan’s military white paper last year mentioned China more than 1,000 times. It warned that China is building out everything from nuclear weapons to cyberwarfare tools. Beijing responded by accusing Japan of forgetting its history and going back to militarism.
Japanese companies rethink China as business risks grow
Back in the late 1970s, Japan saw China as the future of manufacturing. Companies like Panasonic and Toyota built factories there. Clothing brands like Uniqlo sourced products from China and sold them globally. The relationship worked. Japan got cheap labor. China got technology and jobs. For years, it seemed like a win-win.
That’s changed. Now, Chinese companies are going head-to-head with Japan in high-end products. They’re no longer just making cheap goods. Chinese brands are making electronics, cars, and semiconductors that rival Japanese products. Japan is starting to look more like a supplier than a manufacturer. It’s shipping parts to China instead of finished goods.
Chinese brands like Shein are growing fast inside Japan. At the same time, carmakers like BYD are competing with Toyota and Honda—not just in China, but globally. Japanese firms are feeling the heat. A survey from the Japan External Trade Organization in November 2024 showed only 58.4% of Japanese firms in China expected to report a profit in 2024. That’s a serious drop. Some companies, like Mitsubishi Motors and Nippon Steel, have already cut operations or pulled out completely.
Doing business in China is also becoming more dangerous. A new counter-espionage law in China has scared off Japanese investors. Several Japanese nationals have been detained in recent years. That’s made executives more cautious about traveling or sending employees into the country.
Tech companies are under pressure too as Tokyo Electron and Nikon, which are two of the biggest names in Japan’s semiconductor supply chain, have been hit by new export controls. The U.S. pushed Japan to block exports of high-end chipmaking tools to China. These rules hurt Japanese firms directly. They can’t sell critical machines or chemicals that China needs to make cutting-edge chips.
Cryptopolitan Academy: Coming Soon – A New Way to Earn Passive Income with DeFi in 2025. Learn More
News – Cryptopolitan – Read More