This paper discusses the economic relationship between the United States and Japan emphasizing the time frame of the 1980's decade.
Japan is an island with 127.4 million inhabitants who enjoy a gross domestic product per capita of $31,267 and one of the highest life expectancy rates in the world (CultureGrams, 2008). The good standards of living the Japanese enjoy in the 21st century are due to the economic strategies the government of Japan and the prime minister selected in 1982, Nakausone Yasushiro, help built. The economic cooperation between the two nations was influenced by the willingness of Japan to help the United States establish diplomatic relations with various Asian such as Pakistan and Turkey. This opens the doors for the Japanese to increase its level of imports to the United States. The United worldwide had been building up trade deficits with many nations due to their high level of involvement in international affairs and mainly because of the consumerism of its people promoted by the same capitalistic system its government build. The Japanese yen gained a lot of value in relation to the US dollar which helped Japan purchased many goods including high-tech machinery and plenty of inventory and supplies along with other intellectual technological transfers that was instrumental in Japanese economic model of using innovation to dominate the technological marketplace.
One of the key industries whose development was accelerated in the 1980's that helped Japan increase gross
domestic product was the car manufacturing industry. From 1981 to 1985 the Japanese total exports of cars to the United States increased from 1.68 million cars per year to 2.3 million car units per year, an increment of 37% in just four years (Aizcorbe, 2007). The rising price of gasoline was one of the main factors many customer began to preferred buying Japanese fuel efficient models over American muscle cars, ironically in today age the American car industry is now imitating the trend the Japanese started to implement in the early 1980's implying the Japanese economic vision in this industry was two decades ahead of its time. Another factor that helped the Japanese economy was the use of sound industrial ecological applications which helped the nation achieve significant energy efficient improvement in the 1980's attributed to technology substitution for energy (Watanabe & Fukuda, 2006).
The overall trade between Japan and the United States during this period of time heavily favored the Japanese nation. Embargo's and protective tactics began to be placed against Japan by the United States. This did not stop Japan which diversified its manufacturing operations into new business segments that allowed the nation to proliferate its export of products and services to other nations of the world. Japan is a key allied of the United States which during the 1980's continued the cold war in an effort to decimate the Soviet Union which eventually they accomplished. The United without realizing gave rise to new player and helped convert Japan from a developing nation into the G8 member it is today. During the 1980's the trade advantage Japan enjoyed over the United States surpass the 40 billion mark at all times, which in essence made Japan the top creditor of the United States at the time.
During the 1980's the economies of Japan and the United States moved in opposite direction. Japan was a rising star making strategic investment and taking