Rattled by Trump, US allies eye Japan’s biggest arms opening since WW2
TOKYO — Japan’s imminent easing of arms export rules has sparked strong interest from Warsaw to Manila, Reuters reporting found, as President Donald J. Trump wavers on security commitments to allies and the wars in Iran and Ukraine strain US weapons supplies.
Prime Minister Sanae Takaichi’s ruling party approved the changes this week as she tries to invigorate the pacifist country’s military industrial base. Her government will formally adopt the new rules as soon as this month, three Japanese government officials told Reuters.
Despite largely isolating itself from global arms markets since World War II (WW2), Japan spends enough on its own military — $60 billion ($1 = 159.2100 yen) this year — to sustain a sizeable defense industry capable of manufacturing advanced systems like submarines and fighter jets.
Among the potential new customers are the Polish military and the Philippine navy, which are undergoing modernization amid regional security challenges, according to Reuters interviews with Japanese officials and foreign diplomats in Tokyo. Defense contractors Toshiba and Mitsubishi Electric are hiring staff and adding capacity to capitalize on demand, their executives said, providing previously unreported details.
One of the first deals Ms. Takaichi’s government will likely approve are exports of used frigates to the Philippines, which is locked in maritime confrontation with Beijing in the South China Sea, according to two of the Japanese officials. Reuters is the first to report the timeframe of the likely sale, which may be followed by missile defense systems, the officials said.
Warsaw and Tokyo can help plug gaps in each other’s arsenals, cooperating in areas like anti-drone and electronic warfare systems, said Mariusz Boguszewski, deputy chief of mission at Poland’s embassy in Japan.
“There are some bottlenecks that we can overcome having Japan on board,” he added, without providing details of specific deals. Poland’s WB Group, one of Europe’s largest private defense contractors, last year signed a tentative drone deal with Japanese aircraft maker ShinMaywa.
Three other European diplomats said Japan’s easing provided a chance to lessen their heavy dependence on US weapons production, which is strained by conflicts. Mr. Trump’s unpredictability, such as his threats to leave the NATO security alliance and invade Greenland, have also heightened the push to diversify, according to the diplomats, who requested anonymity to discuss sensitive matters.
“Offers are coming from everywhere,” said Masahiko Arai, senior vice-president at Mitsubishi Electric’s defense unit, which has been adding staff in London and Singapore to facilitate defense exports.
Ms. Takaichi’s office declined to answer specific questions for this story, instead referring Reuters to a Feb. 20 speech where she said she was reviewing the controls to bolster Japan’s defense production and strengthen capabilities of allies.
Tokyo’s export overhaul has previously been encouraged by successive US administrations, including Mr. Trump’s, eager for allies to contribute more to collective defense efforts.
White House spokeswoman Anna Kelly did not respond to questions from Reuters about the changes to Japanese policy but said that the two nations were closer than ever under Mr. Trump and Ms. Takaichi.
China’s foreign ministry did not immediately respond to questions about Japanese frigates potentially being sent to the Philippines. Ministry spokeswoman Mao Ning told reporters in April that Beijing was concerned about changes in Tokyo’s arms export policy and that it should “act prudently in military and security areas.”
The Philippines defense ministry declined to comment.
RISKY BUSINESS?
Japan’s first steps to relax the rules began more than a decade ago when Ms. Takaichi’s mentor, the late premier Shinzo Abe, eased a near-blanket ban on exports to encourage joint arms development with allies that would help counter China’s growing military might.
The push largely stalled, however, as many restrictions — including on lethal equipment — remained. Companies continued to shy away from overseas defense sales.
Buoyed by a bumper election win and shorn of the longtime coalition partner that had opposed more radical change, Ms. Takaichi hopes the latest easing will nudge arms makers to add the production capacity Japan needs for a major military buildup.
Some Japanese defense firms say they are ready to pivot.
Air defense systems builder Toshiba told Reuters it plans to hire about 500 people over the next three years and is constructing new testing and manufacturing facilities. It has also established a new department to handle defense exports.
“Reputational risk is not what it used to be,” said Kenji Kobayashi, vice-president in Toshiba’s defense division.
Some big Japanese brands that have sidelines in defense equipment and also make consumer goods have expressed concerns that arms sales will put off their broader range of customers.
“Rather than worrying about that, we focus on fulfilling our role and growing the business,” Mr. Kobayashi said.
A recruitment listing reviewed by Reuters from Mitsubishi Electric — whose products include fridges and missiles — shows the firm is hiring for an overseas sales role covering fighter aircraft and other military exports.
Demand for finished systems is strongest in Asia, while Europe, Australia and the United States offer markets for components and co-development of new products, said Mr. Arai, the Mitsubishi Electric defense executive.
He expects overall sales at his unit, including domestic and international, to increase by 50% to ¥600 billion ($3.8 billion) by 2031.
There remains a gap between the political messaging and the policies of some companies, however, said Latvia’s envoy to Japan, Zigmars Zilgalvis.
He gave the example of carmaker Toyota, whose subsidiary turned down an attempted purchase of engines and related parts by Latvian firm VR Cars for a military utility vehicle in 2023.
The Latvian mission had tried to help broker the failed sale, Mr. Zilgalvis said.
Toyota Customizing & Development said in response to Reuters questions that it could not accommodate the request for military vehicles “based on our business scope and policy.” It declined to comment on the upcoming revisions to Japan’s arms export policy.
VR Cars said it respected the decision.
While Tokyo is expected to maintain strict controls on sending arms to conflict zones, even Ukraine has sensed an opportunity.
Kyiv’s chamber of commerce in Tokyo will soon launch a new industry group of Ukrainian and Japanese drone firms to spur development of new technologies, timed to coincide with the rule changes, its head Kateryna Yavorska exclusively told Reuters.
EMERGING FROM WORLD WAR TWO ‘TIMEOUT’
The US has long dominated global military supply chains. It accounted for 95% of Japan’s defense imports, 85% of Australian and British purchases and 77% of Saudi Arabian buys between 2021-2025, according to a March report by the Stockholm International Peace Research Institute (SIPRI) think-tank.
But Washington’s foreign military sales program, often blamed for late deliveries and rising costs, and its tight control over defense technologies has long been a source of frustration, officials and analysts said.
One objective of Japan’s rule changes is to build defense supply chains in Asia that do not rely on the United States, said a ruling party official involved in drafting security policy.
Neighboring South Korea offers something of a blueprint: It has become the largest defense supplier to Poland and the Philippines after steady growth over the last five years, SIPRI data show.
But the potential for Japan — the world’s fourth-largest economy — is greater.
Even with the curbs, Japan’s arms industry is on a par with South Korea, Germany, Italy and Israel, and nearly twice the size of India’s, according to SIPRI’s analysis of leading defense contractor revenues in 2024. The US industry, however, is 25 times bigger.
“Japan has been kind of in the timeout box because of World War II, frankly. But they were inevitably going to swing closer towards the center of global politics,” said Andrew Koch, founder of Nexus Pacific, a Tokyo-based defense industry advisory. — Reuters
