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Sep 10, 20205 min read

What does the end of the Abe Era mean for the United States?

By: Anish Beeram


Why did the Abe Era end?

The Abe Era was a Japanese political period in which Prime Minister Shinzo Abe reformed the economy and Japanese foreign policy. As of August 28, 2020, Abe formally announced his resignation after eight years, claiming poor health as the primary cause for the decision. However, many believe that political turmoil may have primarily spurred his announcement of departure:

  • As a response to COVID-19, Abe proposed poor policy changes. This included the distribution of two washable cloth masks to every Japanese household, which was quickly rejected by lawmakers and the public. Plus, the Japanese economy suffered massive losses after the Abe administration launched stimulus packages to reverse the ramifications of tax hikes, as public debt increased to over 200% of the country’s GDP. In addition, wage stagnation and low labor productivity overshadowed Prime Minister Abe’s final year.

  • Throughout his tenure, Abe was plagued by various scandals. These include controversies of wasting taxpayer money on extravagant cherry blossom viewing parties, as well as a cover-up by the Financial Ministry regarding discounted land. These situations involved abusing government power to gain economic capital. The claims also spread accusations of cronyism within the Japanese government, where Abe appointed members to the government who would help to carry out his political agenda. Unfortunately, Mr. Abe failed to adequately defend or explain himself to the public and associated press.

Ultimately, public support for the Abe administration has plummeted since the start of the coronavirus pandemic, reaching its lowest levels yet since the start of his term.


What had the Abe administration accomplished over their eight years?

Prime Minister Abe through his tenure effectively saved Japan economically and internationally.

  • Economics: Prior to the Abe administration, Japan was struggling with high rates of deflation, where the price of goods dropped, along with the wages of Japanese working-class citizens. However, this was countered with Abe’s strong economic plan, known as “Abenomics.” He raised the Japanese GDP and consumer price index through a three-pronged approach.

1) Aggressive fiscal policy in which he regularly injected the economy with stimulus. He boosted the economy with close to 30 trillion yen (about $300 billion), while creating new jobs through infrastructure projects. These included the construction of new earthquake-resistant roads and bridges to improve public structures and facilities.


2) Unconventional monetary policy by increasing the amount of money that consumers had to spend. The Bank of Japan accomplished this through an asset purchase program, where the bank bought consumer goods with the intention of giving more money to the public. They concurrently made it easier for consumers to make purchases on the market by bolstering the market’s liquidity. The banks also readily employed negative interest rate policy. This meant that banks would charge you interest, instead of paying you interest. Negative interest rates incentivized consumers to spend money more frequently, instead of leaving it in a bank. The result was consumers having more money to spend and a reason to spend it, pulling the country out of a deflationary spiral.


3) A structural reform program where business regulations were lowered, the labor market was reformed, corporate tax cuts were embraced, new sectors of the economy emerged, and the market as a whole was diversified. In addition, during this period, women were encouraged to enter the workforce. These reforms solved a past labor shortage and caused the value of produced goods to increase.

The economic policy changes bolstered the Japanese economy while reversing the historic downward trend.


  • International standing: Through a process of agricultural reform, Abe aimed to create the Trans-Pacific Partnership (TPP), which was a free trade agreement between Japan, the United States, and other Pacific Rim countries like Thailand. The purpose of the partnership was to aid in the modernization of the farming industry. However, President Trump pulled out of the TPP, as he sought a bilateral trade deal between the US and Japan. Despite the lack of American presence, Abe continued with the TPP, creating a new version known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Meanwhile, China-Japan tensions began escalating quickly, as Japan opposed Chinese presence near Japanese islands in the East China Sea, leaving the country in a hazardous international quagmire. Additionally, during this time, President Trump and Prime Minister Abe were able to remain on friendly terms, despite growing international tensions and rising conflicts of geopolitical interest.


What is next for the United States post-Abe Era?

Shinzo Abe’s resignation has sent shockwaves through the international community as a sheer result of his long tenure. He developed strong relations connecting Japan to Europe, central Asia, and the United States. However, his departure is sure to cause massive changes:

  • Increased tensions between the US and Japan. Few leaders of democratic countries have had good relations long-term with the Trump administration. Thus, the presence of a new prime minister almost guarantees that tensions will escalate. Especially considering the volatile international climate during the coronavirus pandemic, few politicians, Japanese and American, are holding faith that good relations will continue between the two countries.

  • Loss of potential trade deals. Abe was known for pioneering new trade opportunities internationally, and they were legitimized by Abe’s economic prosperity domestically. Unfortunately, a change in leadership during a pandemic-induced economic crisis does not bode well for Japanese prospects internationally. Thus, the United States is very likely to push away any Japanese trade deals for the foreseeable future as a result of uncertain Japanese markets. Ultimately, Abe’s departure will increase American isolationism from the current international scene.

  • The heightened conflict between the US and China. During his tenure, Abe was well known for balancing economic ties between the US and China and serving as the intervention between the two powers. With his resignation, China is in a prime position to make power grabs in the East China Sea, in attempts to further spread their influence. This will inevitably lead to escalated tensions between the US and China, with each country trying to defend and expand their hegemony with the lack of a Japanese presence.

Shinzo Abe has been a constant factor in Japanese politics for the better part of the last decade. His presence has led to Japanese economic stability, as well as the trust of many international leaders. Ultimately, the United States will struggle on the international landscape with Abe’s departure from politics.


Discussion Questions:

  • How can Japan continue its economic prosperity under new leadership during the pandemic?

  • Will the coronavirus pandemic influence the United State’s response to Abe’s resignation?

  • How can Japan rebound from the shock of Abe’s departure?

  • How will Abe’s departure impact US-China relations?

  • Does Abe’s resignation foreshadow escalating conflict in Eastern Asia?


Sources Used/Further Reading:



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