Toward a Stronger and More Resilient

U.S.-Japan Relationship
2022
 The Importance of the U.S.-Japan Alliance

Keidanren is committed to reinforcing the strength and resilience of U.S.-Japan

economic ties by further developing the communication channels between
Japan and the United States.

Our two countries can work together in order to resolve various global issues
and exercise the leadership needed to maintain and strengthen a free and open
international economic order.

1 Toward a Stronger and More Resilient U.S.-Japan Relationship, 2022

 President Joe Biden met virtually with
Prime Minister Kishida Fumio of Japan,
and the two leaders agreed that the
U.S.-Japan Alliance has never been
stronger or more necessary. They
also shared the intention to expand
and deepen bilateral economic
cooperation.
Source: Official Website of the Prime Minister of Japan and His Cabinet
(https://www.mofa.go.jp/na/na1/page1e_000372.html) From the Summary of the Virtual Meeting between
President Joe Biden and Prime Minister Kishida
Fumio on January 21, 2022

A Balanced Economic Relationship

The United States and Japan are top economic partners and global leaders who should
continue to build their relationship into a stronger and more resilient economic alliance.
Both countries have demonstrated their mutual commitment to one another through
strong trade and investment. The United States is the top destination for Japanese foreign
direct investment and Japan is the United States’ largest foreign investor.

Japan and the United States Are Balanced Partners in Investment and Trade

Japan Foreign Direct U.S. Jobs Created by

Investment in Japanese Companies
the United States 973,800 Americans directly
$679 billion (stock) employed (2019)

Japan Imports from the Japan Plans To

United States Continue Investing
Nearly $102 billion in goods Even in the midst of the COVID-19
and services (2020) pandemic, nearly 50% of Japanese
Source: U.S. Bureau of Economic Analysis
companies in the United States are
considering expansion
Source: JETRO

Toward a Stronger and More Resilient U.S.-Japan Relationship, 2022 2

 Japan Invests in the United States

Japan Is a Leading Investor in the United States

At nearly $680 billion in cumulative stock through 2020, Japan is now the top investor in the
United States. Moreover, Japanese investment in the United States continues, with $23 bil-
lion in investment flows in 2020.

Foreign Direct Investment in Foreign Direct Investment in

the United States by Country the United States by Country
(Stock through 2020) (2020 Flows)

$29 B

$679 B
$23 B
$570 B $564 B
$481 B $18 B
$16 B
$14 B
$315 B

1. 2. 3. 4. 5. 1. 2. 3. 4. 5.
Japan Canada Germany United France Netherlands Japan Canada Germany France
Kingdom
Source: U.S. Bureau of Economic Analysis Source: U.S. Bureau of Economic Analysis

Japan Remains Major FDI Japanese Foreign Direct

Investment in the United States
Contributor to the United States (Flows, 2010-2020)
Japan is one of the largest sources of $46 B
$45 B $46 B
inbound U.S. foreign direct investment (FDI)
annually. Over the past decade, there have
been some peaks and dips in Japanese FDI $35 B
in the United States, but continued annual $33 B $34 B
contributions have moved Japan up to the
number one investor position.
$22 B $23 B
$21 B

$16 B $17 B

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: U.S. Bureau of Economic Analysis

3 Toward a Stronger and More Resilient U.S.-Japan Relationship, 2022

Japan Invests in the United States from the Ground Up
In 2020, Japan was the largest investor in expansions and new U.S. business branches from
scratch (greenfield investments), involving every aspect of the United States job market
from building construction to information technology to sales.
Greenfield Investments by Country
2020
$553 M

$412 M

$51 M
$27 M $23 M

1. 2. 3. 4. 5.
Japan Germany United Arab Israel Netherlands
Emirates
Source: U.S. Bureau of Economic Analysis

Japan Provides High Quality Investment

Japanese investment in the United States is focused on research and development. In 2019,
Japanese FDI accounted for nearly $13 billion in R&D. Since 1999, R&D spending by
Japanese affiliates in the United States has increased fivefold.
Insourced R&D Spending by Country Insourced Japanese R&D Spending
2019 1999-2019
$12.9 B

1. Japan
All Other $12.9 B
Countries
$15.3 B
$8.0 B
7. France 2. Germany
$4.5 B $11.0 B
6. Ireland $5.1 B
$5.0 B
3. Switzerland $3.4 B
4. United $10.3 B $2.5 B
5. Nether- Kingdom
lands $7.1 B
1999 2004 2009 2014 2019
$5.2 B
Source: U.S. Bureau of Economic Analysis Source: U.S. Bureau of Economic Analysis

Toward a Stronger and More Resilient U.S.-Japan Relationship, 2022 4

 Japanese Affiliates Boost U.S. Exports
Japanese Companies Export from the United States
Japanese companies are the largest foreign contributors to U.S. export totals.
U.S. Exports of Goods Shipped by Foreign Affiliates
2019

1. Japan $82 B

2. Netherlands $56 B

3. United Kingdom $52 B

4. Germany $47 B

5. France $26 B

6. Canada $16 B
Source: U.S. Bureau of Economic Analysis

Japanese Manufacturing Affiliates in the United States

Export a Diverse Variety of Goods
Japanese auto manufacturers in the United States are responsible for more than 40 percent
of all exports from Japanese manufacturing affiliates, while the remaining products come
from a wide array of industries. An additional $43 billion in goods are exported through
Japanese wholesale affiliates in the United States, though industry-specific data are limited.
U.S. Manufacturing Exports by Japanese Affiliates by Industry
2019

6. Plastics & All Other

Rubber Products Mfg.
$1.8 B $4.6 B
5. Food 1. Motor
$2.2 B Vehicles & Parts
$16.2 B
4. Computers &
Electronic Products
$3.6 B
3. Chemicals
$3.8 B 2. Machinery
$5.6 B
Source: Bureau of Economic Analysis

5 Toward a Stronger and More Resilient U.S.-Japan Relationship, 2022

 Japanese Businesses Employ Americans
Japanese Businesses Employ Hundreds of Thousands of Americans
In 2019, Japan created jobs in the United States both directly and indirectly across all
industries.

Employment by Japanese
Companies in the United States
2019
Direct
1,252,300
&
Direct Indirect
973,800 1,877,612
973,800 Source: Keidanren estimates
871,300 859,900
765,100

542,900 490,600

1. 2. 3. 4. 5. 6. 7.
United Japan Canada Germany France Netherlands Switzerland
Kingdom Source: U.S. Bureau of Economic Analysis

Japanese Companies Lead All Foreign Nations in U.S.

Manufacturing Jobs
Japanese manufacturing companies employed more than half a million U.S. workers in
2019, far more than any other foreign country.
Insourced Manufacturing Employment
by Country
527,500 2019

307,400
256,700 255,300
230,500
197,300
155,200

1. 2. 3. 4. 5. 6. 7.
Japan Germany United Ireland France Switzerland Netherlands
Kingdom
Source: U.S. Bureau of Economic Analysis

Toward a Stronger and More Resilient U.S.-Japan Relationship, 2022 6

 Japanese Businesses Employ Americans
Japanese Companies Are Leaders in American Job Creation
Japanese enterprises created more than 300,000 new American jobs between
2009 and 2019.
Insourced Job Creation by Country
2009-2019

1. Canada 381,800

2. United Kingdom 343,900

3. Japan 310,100

4. Germany 291,400

5. France 247,600

6. Netherlands 204,200

7. Ireland 199,000
Source: U.S. Bureau of Economic Analysis

Japanese Companies Provide Quality American Jobs

Japanese companies offer stable and high-paying jobs.

Insourced Compensation by Foreign Companies in the United States

(By Large Investor Countries)
2019
$109,600

$91,200 $90,700
$76,300 $76,100 $72,600 $72,500

1. 2. 3. 4. 5. 6. 7.
Switzerland Japan Germany Canada United France Netherlands
Kingdom
Source: U.S. Bureau of Economic Analysis

7 Toward a Stronger and More Resilient U.S.-Japan Relationship, 2022

Japanese Affiliates Provide Jobs in All 50 States
Japanese affiliates employ Americans in all 50 states and the District of Columbia. California
tops this list with nearly 125,000 jobs.
U.S. Jobs by Japanese Affiliates, 2019

WASHINGTON NEW HAMPSHIRE 5,100

14,400 MAINE
MONTANA NORTH DAKOTA VERMONT 600 1,100
500 900 MINNESOTA
OREGON 10,500
10,500 NEW
IDAHO WISCONSIN YORK MASSACHUSETTS 25,600
SOUTH DAKOTA 8,700 44,700
1,100 400 RHODE ISLAND 2,100
WYOMING MICHIGAN
100 35,000 CONNECTICUT 7,900
IOWA PENNSYLVANIA NEW JERSEY 26,200
NEBRASKA 4,900 26,900
NEVADA 6,500 OHIO
7,100 INDIANA DELAWARE 1,400
ILLINOIS 56,000 71,300 WEST
UTAH 58,000 MARYLAND 5,200
3,100 COLORADO VIRGINIA DISTRICT OF COLUMBIA 800
7,600 KANSAS MISSOURI 3,900 VIRGINIA
11,600 16,900 KENTUCKY 15,200
44,400
CALIFORNIA N. CAROLINA
124,700 TENNESSEE 28,500
ARIZONA OKLAHOMA 47,500
NEW MEXICO 4,200 ARKANSAS S. CAROLINA JOBS SUPPORTED
11,200 5,600 16,000
1,400 100 - 3,000
MISSISSIPPI GEORGIA 3,000 - 7,000
9,900 ALABAMA 38,500 7,000 - 15,000
TEXAS 20,900 15,000 - 30,000
75,100 FLORIDA
LOUISIANA 30,000 +
ALASKA 3,800 22,000
2,600

HAWAI’I
21,200
Source: U.S. Bureau of Economic Analysis

Japanese Affiliates Provide Most Jobs in Manufacturing

Japanese manufacturing affiliates operating in the United States employed more than half a
million Americans in 2019, the single largest sector. More than 211,000 of these manufactur-
ing jobs were in motor vehicles and parts.
U.S. Jobs by Japanese Affiliates by Industry, 2019

527,500

212,600

50,600 45,700 63,400

39,700 34,400

1. 2. 3. 4. 5. 6. 7.
Manufacturing Wholesale Trade Finance & Information Retail Trade Professional, Other
Insurance Scientific, & Technical Industries
Services
Source: U.S. Bureau of Economic Analysis

Toward a Stronger and More Resilient U.S.-Japan Relationship, 2022 8

 Japanese Companies Are Good Corporate Citizens
Japanese Companies Value Their American Employees and Their
Local American Communities
Leaders in corporate social responsibility, Japanese companies frequently establish
charitable foundations to empower communities and engage at a local level. From Alabama
to Wyoming, Japanese corporations endow cultural events at museums and theaters;
provide disaster relief and donate to hospitals for disease prevention; send employees into
the community to volunteer to tutor at elementary schools; provide job training for high
schoolers and underemployed adults; cook meals at shelters; and engage in numerous
other charitable activities. Japanese companies believe in giving back to local communities.

Community Outreach and Corporate Social Responsibility

Japanese companies are dedicated to good corporate citizenship in the communities where
they operate. Examples of community engagement include the following:
 Arts and Theater  Hospitals and Disease Prevention
Supporting the community through Providing expertise and financial support
patronage of the arts. to promote public health and welfare,
 Youth Education including various initiatives to combat the
Empowering youth through programming COVID-19 pandemic.
to prepare them for the workforce.  Ending Hunger and Homelessness
 Empowering Veterans and the Supporting the nutritional and housing
Disabled needs of local communities.
Expanding workplace opportunities for  Environmental Protection and
military veterans and the disabled. Sustainability
Promoting sustainable and environ-
mentally sound practices.
Promoting Diversity in Employment
Japanese companies support inclusive and diverse employment initiatives.

 Gender  LGBTQ+
Empowering women in the workforce. Promoting a supportive working
 Diversity environment for LGBTQ+ employees.
Drawing and supporting applicants from a  Disability
variety of racial and ethnic backgrounds. Ensuring an accessible and
 Age accommodating workplace.
Providing employment opportunities for  Military Service
adults of all ages. Providing opportunities to reintegrate
veterans into the workforce.

9 Toward a Stronger and More Resilient U.S.-Japan Relationship, 2022

“The U.S.-Japan relationship is the most important bilateral relationship
in the world, bar none.”

-Mike Mansfield, former U.S. Senator and Ambassador to Japan

Long recognized and respected as the leading voice for Japanese businesses,
KEIDANREN (Japan Business Federation) seeks to establish consensus in the
business community on a variety of important domestic and international
issues, and works for their steady and prompt resolution. At the same time, we
communicate with a wide range of stakeholders including political leaders,
administrators, labor unions, and citizens. We also strive for the resolution of
international issues and the development of closer economic relations with
various countries through policy dialogue with the governments and economic
associations of each country as well as international organizations.

Membership
 1,461 Corporate Members
 109 Nationwide Industrial Associations
 47 Regional Economic Organizations
As of January 2022

Keidanren
1-3-2, Otemachi
Chiyoda-ku, Tokyo 100-8188
http://www.keidanren.or.jp/en/
america@keidanren.or.jp

Keidanren USA
1200 Seventeenth Street, NW, Suite 201
Washington, D.C. 20036
http://keidanren.us
washingtondc@keidanren.us