Postwar Global Trading Order Stands at Critical Juncture

Tokyo, May 6 (Jiji Press)–The post-World War II global trading order is at a crossroads, and Japan, a country that lacks natural resources and has instead benefited from the free trade system, faces a daunting task of addressing the situation. Neoliberalism, which aims to maximize profits globally based on market mechanisms, has caused hollowing-out of domestic manufacturing industries in many advanced countries. In response, the United States and European countries are leaning toward protectionism, helping deepen divides among developed nations. In the meantime, China is maneuvering to boost its presence in emerging economies in the Global South. U.S. President Donald Trump adopted a high tariff policy toward many other countries, including U.S. allies, after returning to the White House in January 2025. Trump has voiced his ambition for the United States to own Greenland, an autonomous territory of Denmark, as part of efforts to secure natural resources. Early this year, the Trump administration conducted military strikes on Venezuela, which had been increasingly taking a confrontational stance against the United States. In March, the European Union announced the industrial accelerator act, which will be debated by the European Commission, the executive organ of the EU. The EU says that the new legislation is intended to reduce the region’s economic dependence on China and strengthen industries in member European countries. At the same time, it apparently gives preferential treatment to EU-made products. A senior official of a Japanese economy-related ministry warned, “Globalization has been reviewed, and the involvement of governments is increasing.” Supply constraints caused by the COVID-19 pandemic and moves to tighten export controls amid rising political tensions have revealed that having manufacturing bases in China to excessively focus on economic efficiency is a major risk. Against the background, simultaneously promoting economic security and free trade has become an important strategy. With the U.S.-led critical minerals trade bloc, the World Trade Organization and many other economic frameworks in mind, the Japanese government plans to foster the semiconductor and other key industries and boost relations with Global South countries. Tokyo is also seeking to increase trustworthy partners and exploring ways to interconnect like-minded countries to reduce the influence of China. The government presented a program related to these strategies at an online summit associated with the Japan-led Asia Zero Emission Community framework, which includes Southeast Asian nations and Australia, in April. Specifically, Japan said that it will provide a total of 10 billion dollars in aid to nations struggling to procure fuel amid the de facto blockade of the Strait of Hormuz, a critical oil transport waterway in the Middle East. The program was “welcomed very much” by participating nations, Japanese trade minister Ryosei Akazawa said. There are growing concerns in Japan that Trump may make some concessions to Chinese President Xi Jinping at their meeting planned this month. Japan hopes to create a group of nations that support a rules-based free trade system and to stabilize the international trading order by putting the free and open Indo-Pacific initiative, proposed by the country, into action from the stage of explaining its principles. END [Copyright The Jiji Press, Ltd.]