Japanese Budget Disquiet

Takaichi’s Unlimited Budget Request Causes Concern

By Takuya Nishimura, Senior Fellow, Asia Policy Point
Former editorial writer for the Hokkaido Shimbun
You can find his blog, J Update here.
September 7, 2026
 
Japan’s Finance Ministry (MOF) closed budget requests from the ministries for FY 2027 at the end of August. Because Prime Minister Sanae Takaichi removed the limits on requests for investments in projects that could contribute to economic growth, the total number of requests significantly exceeded last year’s. These expanded budget requests, suggesting that Japan wants to provide more economic stimulus, have made the markets uneasy, as seen in the steep rise of long-term bond yields. The United States has warned Japan to adjust its fiscal policy to stop, if not reverse, these increases.
 
The MOF wraps up budget requests for the coming fiscal year at the end of August every year. The ministry examines these requests and formulates an annual budget bill by December. The Diet discusses the bill in its ordinary session normally convoked in January. The leading parties hope to pass the budget bill by the end of March; the budget would then govern projects in April or thereafter.
 
If the government needs to spend more on unexpected events, for example, recovery from a natural disaster or support for urgent economic stimulus, the government will formulate a supplemental budget in the fall. Takaichi wants to abolish the supplemental budget process to make the level of governmental spending more predictable for businesses. It is likely that her approach reflects the views of the Ministry of Economy, Trade and Industry (METI), for which economic growth is everything.
 
Historically, an annual budget has been formulated based on MOF’s estimation of the government’s tax and other revenues over the next year. Embracing a well-known principle of “calculate income, regulate outgo,” the MOF allots portions of the expected revenue to every ministry. This allotment process effectively caps the budget request of each ministry. It is the reason the annual budget request is called a “ceiling.” Through the allotment process and the examination of budget requests, MOF controls government spending and has earned the status as “the most powerful ministry.”
 
METI-leaning Takaichi hopes to reform this system. Regardless of the estimate of next year’s revenue, she ordered each ministry to submit a budget request without regard to the ceiling, at least insofar as the ministry’s expenditures above ceiling would contribute to economic growth or crisis management. The Ministry of Defense made the largest ever request at 8.9 trillion yen for projects including the introduction of AI in command and control. METI increased its own requests to support businesses on AI, semiconductors, and robotics.
 
It is not strange that the total amount of budget requests hit a new record. It swelled to 143.06 trillion yen, exceeding the previous year’s total by 20.75 trillion yen. Uncapped requests for investment amounted to 12.17 trillion yen. The MOF explains that this amount is the sum of the annual budget and the supplemental budget in FY2027. However, the amount still exceeds the sum of these two budgets in FY2026, which was 140.61 trillion yen. There is no guarantee that the government will not need a supplemental budget for an unpredictable natural disaster next year.
 
The greatest concern, however, is Japan’s payments on its government bonds. The total estimated expenditures in FY 2027 for the redemption and payment of interest on outstanding government bonds is at a record high 36.63 trillion yen. With the recent trend of policy interest rate increases by the Bank of Japan (BOJ), the payments for government bonds are expected to increase. The assumed yield rate for government bonds is 3.8 percent in FY2027, 0.8 percentage points higher than in FY2026.
 
Concern about Japan’s lack of fiscal discipline was immediately reflected in the long-term bond market. Bond prices fall as yields rise. The ten-year government bond yield hit three percent, the highest level in the last thirty years. It happened on the next day when the MOF closed budget requests. Expectations that the BOJ would hike the policy interest rate that the rise in crude oil prices would increase price inflation also caused bond yields to go up and bond prices to drop.
 
A rise in the long-term bond yield in Japan can be linked to a similar rise in the U.S. longer-term bond rate. U.S. Secretary of Treasury Scott Bessent said on September 1 that he expected Japan to “do the right thing,” effectively pressuring the BOJ to raise the policy interest rate. Referring to the success of former prime minister Shinzo Abe’s reflationary policy in stimulating the Japanese economy, Bessent said that Japan “should actually let that run and stop the reflation” in his press conference after the G20 meeting of finance ministers and central bank chiefs in Asheville, North Carolina.  That is, Bessent implied, Japan should cease further stimulus and direct its fiscal policy toward lowering inflation.
 
A reflation policy typically consists of expansive fiscal policy and monetary easing. The Abe administration used this policy to get rid of deflation. It is obvious that the current problem of Japan’s economy is not deflation, but inflation. Nevertheless, Takaichi has decided that what was good for Abe will be good for her, and she is trying to mobilize the national budget for investments to spur even greater economic growth and to pressure the BOJ not to raise the policy interest rate. Her economic policy, called “Sanaenomics,” looks to be facing opposition from the markets and the U.S.

JAPAN UPDATE - View from Australia

                          Japan Update 2026

Australia-Japan Research Centre

Australian National University

Wednesday 9 September 

9 AM - 5 PM (AEST, UTC+10)

Tuesday 8 September

7 PM - 3 AM (EDT)

in-person and live streamed on Vimeo

👉REGISTRATION

Please indicate whether you will attend in person or online (via live stream on Vimeo) at the checkout. All attendees will receive a confirmation email with instructions for accessing both the in-person and online events

PROGRAM

Registration & tea and coffee (8:30-9:00am)

Welcome (9:00am)
Shiro Armstrong, Director, Australia-Japan Research Centre, The Australian National University

Introduction
Rebekah Brown, Interim Vice Chancellor of The Australian National University

Opening Keynote
Tim Ayres, Minister for Industry and Innovation and Minister for Science

Vote of Thanks
HE Kazuhiro Suzuki, Japanese Ambassador to Australia

The New Normal in Japan's Economy (9:45-10:45am)
Keynote: Koji Nakamura, Bank of Japan

Chair: Ippei Fujiwara, University of Tokyo and Keio University
Katrina Di Marco, Deputy Secretary, Treasury

Morning Tea (10:45-11:15am)

Foreign Policy and Political Choices (11:15-12:45pm)
Chair: Lauren Richardson, The Australian National University
Yves Tiberghien, University of British Columbia and Taipei School of Economics and Political Science
Naoko Eto, Gakushuin University
Tomohiko Satake, Aoyama Gakuin University
Evelyn Goh, The Australian National University

Lunch (12:45-1:45pm)

The State of Japanese Studies in Australia (1:45-3:00pm)
Keynote: Sawako Shirahase, University of Tokyo
Chair: Simon Avenell, The Australian National University
Nana Oishi, The University of Melbourne
Kent Anderson, The Australian National University
Carolyn Stevens, Monash University

Afternoon tea (3:00-3:30pm)

The Next 50 Years of the Australia–Japan Relationship (3:30-4:50pm)
Keynote: Peter Drysdale, The Australian National University
Chair: Geraldine Doogue, Australian Broadcasting Corporation
Kate Kitagawa, La Trobe University
Shiro Armstrong, The Australian National University
Melissa Conley Tyler, The University of Melbourne

Closing and Thank You (4:50-5:00pm)
Ippei Fujiwara, University of Tokyo and Keio University
Simon Avenell, Director, Japan Institute, The Australian National University

Asia Policy Events, Monday September 7, 2026

It is a federal holiday in both the U.S. and Canada on Monday. The U.S. Congress is on a weeklong recess. The U.S. House of Representatives will take the following week for recess as well. 

STATE DEPENDENCE OF MONETARY POLICY DURING GLOBAL SUPPLY CHAIN DISRUPTIONS. 9/7, 5:00-6:30pm (JST), 4:00-5:30am (EDT), VIRTUAL. Sponsor: Canon Institute for Global Studies (CIGS), Tokyo, Japan. Speaker: Francesco Zanetti, International Research Fellow, CIGS.

Asia Policy Events, Monday August 31, 2026

Asia Policy Point's weekly Asia Policy Calendar returns from summer recess. Thus, only Monday events will be posted here, on our blog, for the rest of the year. If you want to access the full calendar, please subscribe via this LINK.

TAKEAWAYS FROM THE 2026 INTERNATIONAL AIDS CONFERENCE. 8/31, 9:00-10:00am (EDT), VIRTUAL. Sponsor: Global Health Policy Center, CSIS. Speakers: J. Stephen Morrison, Senior Vice President and Director, Global Health Policy Center, CSIS; Lloyd Mulenga, Professor of Infectious Diseases, University Teaching Hospital, Zambia; Doris Macharia, President, Elizabeth Glaser Pediatric AIDS Foundation; Jirair Ratevosian, Research Scholar, Duke Global Health Institute; Omar Sued, HIV Treatment and Care Regional Advisor, Pan American Health Organization.

US-NORTH KOREA REMAINS RECOVERY COOPERATION: PAST, PRESENT AND FUTURE. 8/31, 2:00-3:00pm (EDT), VIRTUAL. Sponsor: National Committee on North Korea (NCNK). Speaker: Kelly McKeague, Director, Defense POW/MIA Accounting Agency.

An American Progressive View of Asia

Matt Duus

INTERVIEW: U.S. Progressive Leader Eyes Greater Cooperation with China

First published in JiJi Press, 8/17/2026, reprinted here for educational distribution

Washington, Aug. 17 (Jiji Press)--A United States guided by progressive foreign policy would seek to improve cooperation with countries around the world, including China, said Matt Duss, a prominent progressive thought leader in the United States, in an interview with Jiji Press this month.

   The recent electoral success of left-wing candidates in the United States has led to growing interest in progressivism within the country. Although progressivism is usually associated with domestic reforms intended to reduce inequality and increase social justice, its foreign policy tenets are less widely understood.

   "As a progressive, I take the ethic of solidarity seriously. I think we live in an interconnected world," said Duss, executive vice president at the Center for International Policy, a progressive think tank based in Washington. "Our security and prosperity should not come at the expense of the security and prosperity and safety of communities elsewhere."

   In terms of security, Duss calls for a re-evaluation of the U.S. force posture globally, saying that the presence of U.S. troops creates less stability in some regions such as the Middle East. He sought to reassure, though, that any changes to the terms of the U.S.-Japan alliance would be done in close consultation with the Asian ally.

   "I think we need to pay close attention to the debate within Japan. There's obviously a lot of concern within Japanese society about the continuing U.S. troop presence. I think we should take that seriously with Japan as a partner democracy," he said. "I think one thing that we can promise is that a progressive administration would not act precipitously in making these decisions."

   Duss, who previously served as foreign policy advisor to Senator Bernie Sanders, arguably the leading voice in the American progressive movement of the last 10 years, says that, while he is sympathetic to the concerns of some in Asia over the rise of China, it is incumbent on the world's two largest economies to find ways to coexist to bring stability and safety to the region and the world.

   "But I think it's a mistake to characterize the (U.S.-China) relationship mainly as competition. There is going to be cooperation. I would hope there will be more cooperation than competition, and I think the United States needs to really press forward to identify those areas of cooperation."

   While citing climate change, pandemics, and global development as areas ripe for increased cooperation with China, Duss rejects the orthodoxy of the U.S. foreign policy establishment that China's massive global infrastructure project intended to connect emerging markets and developing nations with Beijing, known as the Belt and Road Initiative, is economic warfare.

   "Many people here in Washington see this as a threat," Duss said. "They see these regions as an arena of competition with China. I don't think it's necessarily right to characterize that all as competition."

   Overall, progressive foreign policy differs most from the trade and economic strategies of the past by focusing on the needs of working families and communities ahead of the "elite establishment."

   "I don't want to pit American workers in some kind of zero-sum competition against workers in China or Japan or anywhere else in the world. I think we need a kind of new global trade order that really puts the needs of workers front and center."

   While Duss foresees a significant shift in trade policy under a progressive administration, he does not stray far from long-standing strategy in terms of Taiwan, perhaps the most strategically sensitive issue in the U.S.-China relationship. Instead of saying how a progressive U.S. administration would react to an invasion of Taiwan, Duss emphasized the need to maintain the current admittedly "unsatisfactory" status quo.

   "I think the best course forward is to lower the temperature to make clear that the United States does not support any kind of military solution by either side, we maintain a 'One China' policy, (and) that this issue should be resolved peacefully," he said, largely echoing existing U.S. policy.

   While there will be points of disagreement between the United States and China, such as Taiwan or the "absolutely atrocious" treatment of its Uighur minority population, Duss asserts that preventing ties from worsening is in everyone's interest.

   "(In) a relationship that is so broad and multifaceted and so consequential for the entire global community, I think the focus needs to be on identifying areas of cooperation and coexistence between the United States and China," he noted.

Another Japan Resource

 

A NEW JAPAN RESOURCE

JapanHands

JapanHands is a free, online public resource highlighting Japan-focused organizations and events to (for) English-speaking audiences.

Through an online directory, an events calendar, and a newsletter, JapanHands says it "aims to cultivate a wider and more inclusive generation of  'Japan Hands' "—individuals with the knowledge, relationships, and experience to engage meaningfully in Japan’s interactions with the world community. It hopes to expose its viewers to a broad and sympathetic view of "things Japanese."

Organizations can register at no cost and post their events on the shared calendar. The public can freely access all listings, programs, and opportunities on the site. JapanHands is an open, inclusive hub for anyone interested in Japan-related activities in North America and beyond.

JapanHands is a passive site that depends upon the initiative of its viewers and participants to enroll their organizations and to publicize their events. Corrections and updates are also the responsibility of contributors.

Developed by the National Association of Japan-America Societies (NAJAS), in partnership with the American Friends of the International House of Japan (AFIHJ) and with generous seed funding from the United States–Japan Foundation, JapanHands represents a long-term investment in the infrastructure and public diplomacy that supports Japan’s engagement with the U.S. and the world.

Through these links, you can search the organization directory, browse for events, and subscribe to the newsletter for occasional updates. Here you can apply to list your organization in the directory. Currently, the directory is light on policy and academic organizations. Also not listed are the many Japanese governmental and business organizations that are in Washington, New York, and Los Angeles.

OTHER ONLINE RESOURCES ON THINGS JAPANESE

• H-JAPAN - Network on Japanese History and Culture. The mother of scholarly Japan resources. Events, news, books, jobs. A bulletin board.
• International Japan Studies Database of scholarly events. Harvard University's listing of events. Mainly conferences. A passive site with all listings sent in by the event sponsors themselves.
• Japan Past & Present. Global information hub for the Japanese humanities. Event, scholar, organization, and research resources 
• Modern Japan History Association Member Directory. Find a real historian.
• JapanGov. The official web portal of the Government of Japan, provides some information regarding Japan society, culture, and policy. Directory of ministries and agencies. N.B.: Always use the Japanese-language sites for detailed and up-to-date information.

Can Takaichi Win the Tax Cut Battle?

Dispute over Takaichi’s Proposed Consumption Tax Cut

By Takuya Nishimura, Senior Fellow, Asia Policy Point
Former editorial writer for the Hokkaido Shimbun
You can find his blog, J Update here.

August 17, 2026

Prime Minister Sanae Takaichi announced on July 30 that she would introduce legislation to reduce the consumption tax rate for food from eight percent to one percent. She hoped the reduction would take effect in April 2027 and continue for two years. The rate would return to eight percent in 2029. Although the national council she launched has not yet reached a consensus on this issue, Takaichi had before her two affordability options: a tax cut or a cash handout. Without meaningful discussion with others, Takaichi picked the former. Even some lawmakers in the ruling Liberal Democratic Party (LDP) opposed Takaichi’s arbitrary decision.

A consumption tax cut was originally a plank in the platform of the opposition parties for the Lower House election in February 2026. Recognizing its appeal to the voters, Takaichi took a similar approach for the LDP but with the cut limited to food and to a two-year period, after which the eight percent rate would return. A refundable tax credit would then be introduced. That was Takaichi’s plan.

After achieving victory in last February’s Lower House election, Takaichi launched the multi-partisan National Council for Social Security to discuss and implement her plan. Why social security? That is because revenue from the consumption tax is designed to be spent on social security. The Japan Communist Party and Sanseito were excluded from the council because they had opposed the refundable tax credit. The council had an arbitrary nature from the beginning.

The council failed to reach a consensus. The leading parties, supposedly backed by Takaichi, proposed a reduction in the consumption tax rate on food from eight percent to one percent and an additional cash handout equivalent to the remaining one percent of the consumption tax. The parties sought the same economic effect as the complete elimination of the consumption tax on food. The opposition parties demanded the opposite of what Takaichi later proposed: a cash handout rather than any reduction in the tax rate.

The interim report that the council submitted to Takaichi on July 29 was nothing more than an enumeration of opinions of the parties. They all at least agreed on a cash handout based on family income starting in fiscal year 2029. The council effectively turned down a refundable tax credit because a tax credit would require complicated reform of the taxation system. The council replaced the credit with a cash handout.

It was the next day when Takaichi decided to pick the brains of the leading parties. She advocated for a de facto moratorium on the consumption tax on food for two years and the introduction of another cash handout based on family income. Takaichi tends to make unilateral decisions, leaving minority opinion behind, when she fails to achieve a consensus on an important issue. This habit was seen in the reform of the Imperial House Law in which she insisted on patrilinear succession to the throne of the Emperor.

Takaichi requested the LDP to approve her tax reduction/cash handout plan by early August. However, multiple disputes arose in a meeting of the LDP Research Commission on the Tax System on July 31. One controversy is whether Japan has the fiscal resources to support a tax cut. The moratorium on the consumption tax cut for two years will cost ten trillion yen. Takaichi has not revealed a viable resource for her policy, only referring to some vague reform in spending.

This ambiguity about the fiscal resources for a consumption tax cut has already caught the attention of the markets, which are decidedly skeptical. Although Takaichi reiterated that the tax cut would not require the government to issue more bonds, the long-term interest rate hit a new high in these past three decades. The Japanese yen kept depreciating, inviting coordinated intervention by the governmental authorities of Japan and the United States.

At the meeting of the LDP, lawmakers erupted in frustration. “Finding a resource for the tax cut must be our promise to the voters,” said former Minister of Defense Tomomi Inada, calling for a cash handout instead of a tax cut. Other lawmakers referred to the difficulty in the resumption of the tax rate two years later. An immediate return to eight percent from one percent will mean a noticeable tax increase for taxpayers. “I’ll be responsible for the resumption of the tax rate,” said Takaichi, but no one can guarantee that she will still be the prime minister in 2029.

Having seen an abrupt drop in the approval rating for her cabinet, Takaichi is bent on a consumption tax cut, convinced that the policy can restore her popularity. But the discussion on the consumption tax rate is showing signs of political struggle.

Tomomi Inada is one of the female leaders who would be expected as an alternative to Takaichi. She firmly protested the bill for easing conditions for retrial that was proposed by the Ministry of Justice. Another possible female leader, former Minister of Economy, Trade and Industry Yuko Obuchi, stepped down as a core member of the LDP commission on the tax system. Both are frustrated with Takaichi’s arbitral process in deciding such highly important policy as consumption tax cut. 

This internal dispute on a single issue in the LDP reminds us of the sharp opposition over postal reform during Prime Minister Jun-ichiro Koizumi’s tenure in the early 2000s. Facing firm opposition from veterans in the LDP, Koizumi employed populism for his agenda backed by a high approval rate. He labeled those rivals “as protesting powers” against reform and accomplished the postal reform by ousting the protesters from the party. That was called “theater politics” in which a hero defeats bad guys. Can Takaichi be as clever as Koizumi in handling party politics?

The LDP officially approved Takaichi’s consumption tax cut plan on August 5. Takaichi’s allies in the party rallied for implementing her agenda. But some LDP lawmakers are still skeptical about cutting the consumption tax, which is a fiscal resource for welfare policies for aged people. There promises to be an intensive discussion on the tax cut bill in the fall session of the Diet.

The Future of American Competitiveness

The U.S. Needs to Fund Research to Be Competitive

Michael Schiffer, Senior Advisor at Scalare Advisors, Senior Fellow at the Center for American Progress, and APP Member.

First Published August 19, 2026 on the American Leadership Initiative Substack.

The United States is in the midst of a fundamental reconsideration of its economic relationship with the rest of the world. Tariffs, export controls, investment screening, supply-chain diversification and efforts to bring manufacturing back to American soil have moved from the margins of economic policy to its center. The rationale is straightforward: in a world of geopolitical competition and vulnerable supply chains, the United States cannot afford to depend on foreign sources for technologies and products that are essential to its economic and national security.

While this premise has broad support, there is a legitimate debate over how tariffs should be designed, how broadly they should be applied, and what costs Americans should be willing to bear in pursuit of greater economic resilience. But there is a more fundamental question that has received less attention: what happens if the United States uses trade policy to encourage production at home without maintaining the scientific, technological and industrial capabilities needed to make that production competitive?

Trade policy can change the incentives facing American companies. It cannot, by itself, create the engineers, scientists, technicians, factories, research institutions and supply chains that allow those companies to compete.

Much of American innovation has its roots in government funded research. The land-grant universities that trained generations of engineers, DARPA’s investments that helped produce the internet, and the NIH research infrastructure that has generated generations of medical discoveries were all the products of Americans making long-term bets on the country’s productive capacity and backing those bets with public resources to build the infrastructure, knowledge and human capital on which private enterprise could flourish.

That model of public investment is more important now than ever because the nature of international economic competition has changed. China and other countries are investing heavily in advanced manufacturing, artificial intelligence, biotechnology, energy and the infrastructure that supports them. Companies are reconsidering where they manufacture and source critical inputs. Governments are competing for investment and technological talent. Supply chains are being reorganized not only according to cost and efficiency, but according to resilience and national security. The result is a new economic landscape in which trade policy and domestic investment are inseparable. And success will require combining open markets with technological leadership, industrial policy, and worker training with secure economic partnerships.

The semiconductor industry provides perhaps the clearest example. The CHIPS and Science Act reflected a recognition that advanced semiconductor manufacturing is not simply another industry. Chips underpin virtually every modern economy, from automobiles and telecommunications to artificial intelligence and defense. The program’s early results suggested that targeted industrial policy could generate tangible benefits: CHIPS-funded projects created tens of thousands of jobs and raised wages in affected communities. Semiconductor manufacturing jobs now average $57.78 an hour, demonstrating that investments in advanced manufacturing can anchor high-value economic activity in American communities while strengthening capabilities essential to national security.

The engineers and scientists who develop new technologies do not appear when policymakers decide that a particular supply chain has become strategically important. They emerge from universities, laboratories and research programs that require years of sustained investment.

This is why reductions or uncertainty in federal research funding matter to economic competitiveness even when the immediate objective is fiscal restraint. The damage is rarely visible in a single budget year. It appears later, in the technology that is never developed, the company that is never founded, the researcher who takes a position elsewhere, or the manufacturing facility that chooses a different country because the surrounding ecosystem is stronger. In addition to growing investment in federal R&D, we must increase investment in U.S. STEM education, as well as reopen immigration to high skilled workers from around the world.

The United States has seen this dynamic before. Google’s origins, for example, can be traced in part to a National Science Foundation grant to two Stanford graduate students. The lesson is not that every government-funded research project produces a Google. It is that the economic returns from public investment in science are often unpredictable, long-term and vastly larger than the original investment.

That makes the current debate over trade policy particularly consequential. The administration has increasingly used tariffs and other trade measures to encourage domestic production, including in semiconductors and critical materials. The logic is understandable: if foreign dependence creates strategic vulnerability, changing the price and availability of imports can encourage companies to build capacity in the United States. Recent trade measures on semiconductors and polysilicon explicitly connect import policy with strengthening domestic supply chains.

But a tariff is an instrument, not a strategy. It can change relative prices. It can discourage dependence on a foreign supplier. It can give domestic producers greater room to compete. What it cannot do is determine whether American companies have the technology, workers, energy, infrastructure and supplier networks needed to take advantage of that opportunity.

If policymakers want companies to manufacture more in America, the country must also have the research institutions, skilled workforce, infrastructure, energy, component suppliers and technological ecosystems necessary to support it, and invest in the capabilities that allow American companies and workers to compete when market incentives change.

A serious American industrial strategy does not require Washington to decide which individual companies should succeed. It requires government to build the conditions in which strategically important industries can succeed: world-leading research, a skilled workforce, reliable and affordable energy, modern infrastructure, access to capital, predictable investment incentives and trade relationships that expand markets while reducing dangerous dependencies. Tariffs and trade policy are one component of that strategy, not a substitute for the entirety of it.

For decades, the argument was that trade policy, technology policy and economic statecraft had direct consequences for American wages, jobs and communities. That connection remains real. A semiconductor factory creates jobs not only inside the fab but throughout a regional network of suppliers. A research university trains the scientists and engineers those companies will eventually need. A federal research grant can generate technologies that become the foundation of entirely new industries.

The reverse is also true. Weakening those ecosystems can make otherwise sensible trade and industrial policies less effective.

Nor should industrial strategy stop at the water’s edge. The United States does not need to produce every important input domestically. But it does need to ensure that America and its allies collectively possess the capacity to produce the technologies, materials and components on which our prosperity and security depend. Building resilient economic partnerships with trusted countries should be treated as part of industrial strategy itself.

Americans can disagree about tariffs and the appropriate role of government in the economy. They can disagree about how much protection domestic industries should receive and how quickly supply chains should be reshaped. But if the United States is going to ask American workers to compete in a more contested global economy there should be consensus that we need to make sure they have the tools to do so.

The objective is not simply to return to an era when efficiency and low consumer prices were the only measures of a successful trading system. The objective should be capacity: the ability to innovate, manufacture, adapt and compete when circumstances change.

And that is ultimately how today’s trade policies should be judged. Tariffs can change the terms on which Americans trade with the world. Export controls can limit access to sensitive technologies. Supply-chain policies can reduce dangerous dependencies.

But none of those tools can substitute for the underlying capabilities of a competitive economy.

The United States has spent generations building those capabilities. The challenge now is to make sure that, even as we rethink how America trades with the world, we do not neglect the investments that determine whether America can continue to lead.

Asia Policy Events, Week of August 23, 2026

Asia Policy Point is on summer recess, like the U.S. Congress. We will, however, post some events weekly for our readers and members. If you want to receive these directly to your mailbox, you have to become a "member" of APP. An individual, nonshareable membership is only $105/year and includes our occasional papers of on Japanese politics and access to our office while visiting Washington. SIGN UP HERE.

Week of August 23, 2026

8/18-24 -King of Jordan Abdullah II ibn Al Hussein pays a state visit to China.
8/19-22 - Chinese Foreign Minister Wang Yi visits South Korea and Indonesia.

8/21 -  Annual Ulchi Freedom Shield exercise with South Korea ends. The exercise began on Aug 17 concludes one week earlier than scheduled by order of President Trump. Associated live-training events have been reduced, with certain events canceled or converted to simulations.”

8/23 -Kazakhstan is set to hold snap parliamentary elections.

8/23 – 1939. Molotov Ribbentrop Pact (non-aggression Treaty between Nazi Germany and the Soviet Union) signed. Germany-Soviet alliance enabled WWII.

8/23 - Singapore Prime Minister Lawrence Wong gives an annual address to mark the independence of the city-state. 

8/23-24 - Kuwait Foreign Minister Sheikh Jarrah Jaber Al-Ahmad Al-Sabah pays an official visit to China.
8/23-25 - Mexican Foreign Secretary Roberto Velasco Álvarez visits South Korea.

8/25 - Kuwait Foreign Minister Sheikh Jarrah Jaber Al-Ahmad Al-Sabah pays an official visit to South Korea.

8/23-27 - World Water Week.

8/24-26 - Inaugural Silk Road Finance & Technology Forum, Tashkent, Uzbekistan.
8/24-27- 2026 Nuclear Energy Conference and Expo (NECX), Dallas, Texas.
8/27-29 - Jackson Hole Economic Policy Symposium 2026, Jackson Hole, Wyoming. 
8/29 – 1949. Russia’s first nuclear test, RDS-1.
8/29 – International Day against Nuclear Tests.
8/29 – 1945. First POW camp on the Home Islands of Japan evacuated, Omori on Tokyo Bay and the nearby Shinagawa “hospital,” which rescuers said was “an indescribable hellhole of filth, disease, and death.” (Today, the Heiwajima Motor Boat Racing venue is located at the site of this former POW camp on the artificial island built by the POWs. The camp held Louis Zamperini and Pappy Boyington. Motor boat race gambling was established by unindicted Class A war criminal and black marketeer Ryoichi Sasakawa and remains controlled by his organization, the Nippon Foundation and revenue supports the Sasakawa family of foundations).
8/31 - Seoul's Central District Court sentences Ms. Han Hak-ja, 83 , leader of the Family Federation for World Peace and Unification, commonly known as the Unification Church, for on charges of political fund violations and bribery involving former first lady Kim Keon Hee.

BOMBING IS NOT VERIFICATION: THE LIMITS OF STRIKES ON IRAN’S NUCLEAR PROGRAM. 8/24, Noon (EDT), VIRTUAl. Sponsor: Council on Strategic Risks. Speakers: Andrew Weber, Former Assistant Secretary of Defense for Nuclear, Chemical and Biological Defense Programs; Rose Gottemoeller (Former Deputy Secretary General, NATO; Moderator; Mallory Stewart, Former Assistant Secretary of State for Arms Control, Verification, and Compliance.

AI AGENT CONTAINMENT FAILURES: TECHNICAL REALITIES AND POLICY RESPONSES. 8/24, 2:00-4:00pm (EDT), HYBRID. Sponsor: CSIS. Speakers: Representative Suhas Subramanyam (D-VA), Member, Cybersecurity, Information Technology, and Government Innovation Subcommittee; Ian Reynolds, AI Policy Manager, Hugging Face; Helen Toner, Executive Director, The Center for Security and Emerging Technology; Mackenzie Arnold, Director of US Policy, LawAI; Aalok Mehta, Director, Wadhwani AI Center; Matt Pearl, Director, Strategic Technologies Program.

BEYOND THE TALIBAN: FIVE YEARS OF AFGHAN RESILIENCE AND RESISTANCE. 8/25, 10:00am-3:00pm (EDT), VIRTUAL. Sponsor: National Endowment for Democracy. Speakers: Ryan Crocker, Former U.S. Ambassador to Afghanistan; Nick Schifrin, Foreign Affairs and Defense Correspondent, PBS NewsHour; Annie Pforzheimer, Former U.S. Senior Foreign Service Officer; Minister Counselor (Retired); Melanne Verveer, Executive Director, Georgetown Institute for Women, Peace and Security Former U.S. Ambassador-at-Large for Global Women’s Issues; Adela Raz, Director, Afghanistan Policy Lab, Princeton School of Public and International Affairs. Former Afghanistan Ambassador to the U.S.; Lotfullah Najafizada, CEO, Amu TV; Fawzia Koofi, Former Deputy Speaker of the Afghan Parliament and Founder, Women for Afghanistan; Mariam Safi, CEO, Organization for Policy Research and Development Studies; Wazhma Frogh, Human Rights Lawyers and CEO, Women and Peace Studies Organization; Nasir Andisha, Founder, Center for Dialogue and Progress, and Permanent Representative of Afghanistan to the UN in Geneva; Parwiz Kawa, Executive Director, 8AM Media; Damon Wilson, President and Chief Executive Officer, National Endowment for Democracy.

 

PRESS CONFERENCE: HOW WILL OKINAWA’S NEXT ELECTION IMPACT JAPAN? 8/25, 1:00-2:00pm (JST), MIDNIGHT-1:00am (EDT), HYBRID, Sponsor: Foreign Correspondents' Club of Japan (FCCJ). Speakers: Naomi Machida, Head of the Ginowan Churamizu Kai; Takamatsu Gushiken — Head of Gamafuya.

ENGAGING NAYPYIDAW IN 2026: BANGKOK AND NEW DELHI’S CONSIDERATIONS. 8/25,  2:30-4:00pm (SGT), 2:30-4:00am (EDT), VIRTUAL. Sponsor: ISEAS Yusof Ishak Institute. Speakers: Dr Lalita Hanwong, Assistant Professor, History Department at Kasetsart University in Bangkok, Thailand; Dr V.S Seshadri, Senior Fellow for Economic Security at the Delhi Policy Group. 

THE CHALLENGE OF GULF-CHINA TIES: REASSESSING BEIJING’S ROLE AFTER THE IRAN WAR.  8/25, 10:00-11:00am (EDT), VIRTUAL. Sponsor: Arab Gulf State Institute. Speakers: Mohammed Al-Sudairi, Senior Researcher, King Faisal Center for Research and Islamic Studies; Aaron Glasserman, Distinguished Fellow, Weatherhead East Asian Institute, Columbia University; Chuchu Zhang, Associate Professor of International Relations, School of International Relations and Public Affairs, Fudan University; Moderator: Robert Mogielnicki, Non-Resident Fellow, AGSI. 

EVALUATING THE FUTURE OF U.S.-SOUTH KOREA-JAPAN TRILATERALISM. 8/25, 10:00-11:00am (EDT), HYBRID. Sponsor: Korea Economic Institute. Speakers: Eun A Jo, Assistant Professor of Government, William and Mary; Ayumi Teraoka, Assistant Professor of Politics, Brandeis University; Bruce Klingner, Senior Fellow, The Maureen and Mike Mansfield Foundation; Moderator: Arius Derr, Director of Communications, Korea Economic Institute of America. 

THE LIMITS OF IDEOLOGICAL ALIGNMENT. 8/26, 10:00-11:00am (EDT), VIRTUAL. Sponsor: American German Institute. Speakers: Zsuzsanna Végh, DAAD/AGI Research Fellow, American-German Institute; Program Officer, German Marshall Fund of the United States (GMF); Moderator: Eric Langenbacher, Senior Fellow and Director of the Society, Culture, & Politics Program, American German Institute.

THRIVING, SURVIVING, ZOMBIFYING OR DYING: WHAT FUTURE FOR USMCA. 8/26, 11:00am (EDT), VIRTUAL. Sponsor: Quincy Institute for Responsible Statecraft.  Speakers: Juan Carlos Baker Pineda, CEO and founding partner, Consultores Internacionales Ansley; Simon Lester, nonresident fellow, Baker Institute International Economics Program; Rachel Ziemba, adjunct senior fellow at the Center for a New American Security (CNAS); Moderator: Karthik Sankaran, senior research fellow in geoeconomics in the Global South program, Quincy Institute.

WHY AMERICA IS RUNNING OUT OF MUNITIONS. 8/26 1:00pm (EDT), VIRTUAL. Sponsor: Foreign Policy. Speakers: Tom Karako, Director, CSIS’s Missile Defense Project; Moderator: Ravi Agrawal, Editor in chief, Foreign Policy.

BOOK TALK: HEAVEN DOES NOT BLOCK ALL ROADS: A HISTORY OF TAIWAN THROUGH THE LIFE OF HUANG CHIN-TAO. 8/26, 4:00pm (EDT) IN PERSON ONLY. Sponsor: Yokosuka Council on Asia-Pacific Studies. Speakers: Anna Beth Keim, freelance journalist who has been reporting on Taiwan since 2015; Moderator: William Yale, Yokosuka Council on Asia-Pacific Studies. PURCHASE BOOK  

A VISION FOR THE FUTURE OF MULTILATERALISM. 8/26, 4:00pm (EDT), HYBRID. Sponsor: Stimson. Speaker: Rafael Grossi,Director general of the International Atomic Energy Agency.  

AI AND AUTONOMY ON THE MODERN BATTLEFIELD. 8/27, 3:45pm (EDT), HYBRID. Sponsor: Atlantic Council. Speakers: Gen. (ret.) James Cartwright, USMC, Board Member, Atlantic Council, 8th Vice Chairman, Joint Chiefs of Staff; Owen J. Daniels, Nonresident senior fellow, Forward Defense, Atlantic Council; Moderator: Joe Costa, Director, Forward Defense, Atlantic Council.