US, Japan double down on defence ties. What does it mean for China?

There is a growing alignment between Tokyo and Washington in the defence sector. In January, Japanese defence minister Shinjiro Koizumi met Pentagon chief Pete Hegseth in Washington, and they agreed to expand joint defence production and strengthen supply chains. This will include joint production of air-to-air missiles and surface-to-air interceptors, as well as collaboration on critical minerals.

Additionally, the United States welcomed Japan’s commitment to rapidly strengthen its own defence capabilities, including increasing its defence budget to a record 9 trillion yen for the upcoming fiscal year and continuing to partner with US forces in Japan and the region. In this context, the regional strategy has primarily re-oriented towards industrial capacity and allied production.

The agreement also envisions a larger military presence and the expansion of more sophisticated and practical joint drills across southwestern Japan, a region that includes Okinawa and serves as a strategic outpost for monitoring the Taiwan Strait, China, and the Korean Peninsula. Both Tokyo and Washington view the first island chain as a critical barrier to unchecked power projection into the Pacific.

What is the new proposition?

In recent months, China-Japan relations have taken a downturn, further embroiling the two countries in a heated diplomatic spat. Prime Minister Sanae Takaichi’s remarks on Taiwan, suggesting Japan could intervene militarily if China attacks in November, were followed by a Chinese export blockade of “dual-use” items with potential military applications to Japan. Furthermore, Japan’s tourism sector took a hit amid the escalation, hampering people-to-people ties.

As the security environment in Asia is rapidly becoming more severe and the regional security architecture deteriorates, Japan has been deepening defence-industrial cooperation with the United States. With the 2022 National Security Strategy highlighting the need to fundamentally strengthen its defence capabilities, the defence industry has become a core government priority. In this context and reinforcing this, Prime Minister Takaichi Sanae is set to boost defence spending and further develop defense-industrial policy.

Given China’s growing military capabilities, Washington has a similar focus and overlap in its intentions. In January 2024, they launched their first National Defense Industrial Strategy (NDIS), signaling a push to strengthen cooperation with its allies and partners.

There is a shift in perspective on the bilateral relationship to enable a strong denial-defence posture amid the ongoing unstable geopolitical situation. The United States and Japan affirmed their commitment to deploying advanced capabilities in Japan. This will include maintaining close coordination, building on the successful 2025 deployment of the US Typhon missile system (a canisterised ground launcher for Tomahawk and SM-6 missiles) to mainland Japan. The two countries will scope Japan’s future role in increasing AIM-120 Advanced Medium-Range Air-to-Air Missile (AMRAAM) production capacity following the bilateral feasibility study for AMRAAM co-production.

Furthermore, there will be a fourfold increase in the production of Standard Missile 3 Block IIA missiles in Japan as part of the missile defence cooperation. Japan is also committed to developing a secure and sovereign cloud platform for government data to enhance bilateral information sharing, planning, and coordination.

In April 2024, the US–Japan Defense Industrial Cooperation, Acquisition, and Sustainment (DICAS) forum was launched by then-prime minister Kishida Fumio and then-president Joe Biden. Tokyo advanced its bilateral cooperation with Washington through this platform, aiming to strengthen joint deterrence by promoting multiple collaborative projects. Similarly, in May 2024, the Partnership for Indo-Pacific Industrial Resilience (PIPIR) was launched to meet growing US domestic and international demand. It adds a multilateral layer to US–Japan defence–industrial cooperation, potentially deepening their bilateral ties while Washington and Tokyo also explore cooperation with other strategic partners.

Furthermore, in February and March 2026, exercise Iron Fist was conducted. This included 2,000 Japan Ground Self-Defense Force (JGSDF) troops conducting large-scale defense training alongside about 3,000 US military personnel. The 20th iteration of Iron Fist was significant as it was more geographically dispersed, with its expansion reflecting amphibious and littoral defense capabilities. The training across the islands signals US commitment to defending Japan and upholding overall deterrence.

The US-Japan partnership is transitioning from a bilateral coordination to networked multilateral frameworks. There is an alignment toward long-term military and industrial integration, suggesting a distributed and networked deterrence strategy. The new framework signals greater integration across technology, intelligence sharing, and industrial resilience. Hence, the alliance is evolving into a more regionally networked security partnership.

The stumbling blocks

The bilateral and multilateral defence-industrial cooperation is emerging as a new field of investment and is a win-win situation for both countries. It reinforces the idea that Japanese hard-power diplomacy has made a comeback and further cements the US-Japan alliance based on mutual trust and respect.

However, several challenges need to be addressed. This includes the strained industrial capacity in Japan due to an expanding demand, both domestic and international, labour shortage especially in the defence sector, where specific skills are required, and hesitation on the part of defence companies to increase investment in production, due to the unpredictability of the future demand curve. Together, this creates production bottlenecks, delays, risks,and higher costs, particularly on a potential regional scale.

Another significant barrier is the rigid export and information-sharing controls. For example, US export laws, including the International Traffic in Arms Regulations (ITAR), can prolong and complicate reviews, hindering time-sensitive cooperation between Indo-Pacific partners. In the US–Japan context, differences between the two countries’ industrial-security frameworks necessitate regulatory procedures, creating barriers to further collaboration. In order to derive full benefits of the Japan-US partnership, a partial waiver for close allies could facilitate further collaboration making it more efficient.

A win-win situation

Japan has reoriented itself slowly to play a larger role in the dynamics of the Indo-Pacific region. It is bolstering its capabilities with force modernisation as part of a reassessment of its security posture and response to regional developments. Combined with the equipment and investments and based on its own independent judgment, it is taking necessary steps to ramp up its role. The process of revising Japan’s three national security documents, along with a robust partnership, is steadily advancing towards a broad-based Japan-US security cooperation that strengthens the deterrence and response capabilities of the Japan-US alliance. These efforts would improve and reinforce deterrence, defence proficiency, and contribute to the long-term stability and security of the Indo-Pacific.

There is an expansion of the US–Japan defence–industrial cooperation within both bilateral and multilateral frameworks. Amidst Japan’s plans to strengthen its defence capabilities, the US-Japan alliance remained unwavering. The true measure of deterrence would emphasise speed, scale, and capacity, reflecting the willingness to invest in a shared security architecture.

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