On Friday, Japanese Prime Minister Fumio Kishida proposed a $312 billion plan to build up the Japanese military over the next five years. This would represent the largest buildup since World War II. Japan will rely on tax hikes rather than bonds to fund this spending.
This spending increase is due in part to the war in Ukraine with Russia, as well as growing hostilities between China and Taiwan, and North Korea with a nuclear weapons program underway.
The defense budget increase would put Japan in line with the 2% that is agreed to be budgeted for defense by NATO nations, even though Japan is not one of them. Japan did however, for the first time in history, join NATO nations at a Summit held in Spain last June.
President Trump is mainly responsible for the NATO “2 percenters club” growth from four nations in 2016 to nine in 2019 and an expected 18 by 2024. This “club” refers to NATO nations who contribute 2% of their GDP to the defense budget of the alliance.
From The Mainichi:
TOKYO (Kyodo) — Japan’s pledge to boost defense spending to 43 trillion yen ($312 billion) over the next five years has become a high-stakes gambit for Prime Minister Fumio Kishida, who has decided to push through tax increases to fund it.
Experts see his preference for tax increases rather than bond issuance as reasonable given the country’s fiscal health, the worst among developed nations, and beefing up defenses benefits Japan’s people.
This is yet another signal that relations between Taiwan and China may be deteriorating as neighboring nations begin to ramp up military spending.