In the 1970s and 1980s, the scale of trade between the two countries reached new highs year after year. The deficit of the United States became larger and larger. In 1985, it reached US$50 billion, accounting for one third of the total US trade deficit. The Americans can’t stand it anymore and they must deal with Japan. Caterpillar, the excavator, is very famous. Their construction vehicles are among the best in the industry. But in the 1980s, Caterpillar was beaten hardly by Komatsu Manufacturing Co., Ltd. (KOMATSU), then President Lee Morgan drew up a report that pointed the problem directly to the exchange rate, and said, “As long as the dollar depreciates by 20%, my bulldozer can be pushed to the capital of the Japanese Empire”. At that time, many entrepreneurs in the United States felt that they could not play with Japanese companies because of the exchange rate, not because of the quality of their products. Lee Morgan’s report ignited anti-Japanese sentiment in the United States. Japanese cars were the first to suffer. At that time, the United States imported a large number of Japanese cars, and the market share once reached 20%, which impacted the domestic automobile industry. In the early 1980s, 60,000 workers were unemployed. Automobiles were also the largest part of the U.S. trade deficit with Japan. Cars were smashed in various gestures throughout the United States. The Japanese semiconductor industry has received key attention from the United States. The two countries signed a “U.S.-Japan Semiconductor Guarantee Agreement”, requiring Japan to increase imports of American semiconductor products. Some Japanese products were even added with 100% tariffs, followed by the signing of a second agreement, forcing Japan to contribute 20% of the domestic semiconductor market to foreign companies. This is not over yet. In the 1990s, South Korea entered the semiconductor industry and joined forces with the United States to drive the Japanese semiconductor industry into a cold winter. As of last year, Japan’s top ten semiconductor companies were only Toshiba, ranking ninth. The United States also used “301 investigations” against Japanese companies on a large scale and tried trades it deemed “unfair” and “unreasonable”, and then the president issued policies to retaliate against related companies.
In 1987, the United States also initiated a “Toshiba Incident”, claiming that Toshiba violated the technological embargo against socialist countries and sold 8 machine tools to the Soviet Union to upgrade their submarine technology. The U.S. government and opposition were furious and fined 15 billion U.S. dollars and banned all Toshiba products from exporting to the United States for a period of 5 years. Although history has proved that the technology of the Soviet submarine has nothing to do with Toshiba, and that more than one company has violated the embargo.
From the mid-1990s to the present, Japan’s economic development has stagnated for more than two decades. In 1995, the GDP was 5.4 trillion U.S. dollars, and in 2019 it was 5.1 trillion U.S. dollars. On the contrary, it dropped a little. If you look at Japan’s GDP growth rate over the years, you will find that this is basically a wavy line that does not rise. It will rise a little this year and will shrink next year. The total amount will remain basically unchanged. This is what the Japanese call “The lost 20 years”, and it will be the “lost 30 years” immediately. Today, it is hard to imagine how rich Japan was in the 1980s and 1990s, but after the burst of the bubble economy, everything changed. Back in 1983, under the pressure of the United States, the internationalization of the yen was officially put on the agenda. One year later, Japan fully opened up its financial markets. In the same year, the yen exchange restrictions were lifted, and international capital swarmed into the Japanese market. The Japanese exclaimed that the “financial black ship” is coming. In 1853, the U.S. Navy “founded the country with black ships” and forced Japan to open up port trade.