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 a great potential market, but it is even more crucial to the Japanese economy as the best source of two essential raw materials—coking coal and iron ore. These can be supplied from other parts of the world but only at costs which in the long run may prove prohibitive. Before the war this vast continental area was already of the greatest economic importance to Japan. Today with her economic situation far more precarious and her dependence on heavy industry greater than ever before, continental coking coal and iron ore, as well as China's fabled four hundred million customers, loom very large to the Japanese.

The question of trade between Japan and the continent is a source of current uneasiness in American-Japanese relations and a possible area of specific future disagreement which could assume major proportions quite suddenly. In it the problems of economy and defense merge, and the difference in approach between the United States and Japan becomes all too clear.

The Communists are not likely to trade on a large scale with Japan except for industrial goods of a type which contribute directly or at least indirectly to military power. Unless there is spectacular improvement in Chinese-American relations, it seems improbable that the United States will be prepared to permit, much less approve, an unrestricted flow of such strategic materials to the Chinese Communists. The Japanese, on the other hand, while ready to abide by temporary embargoes, are certainly not ready to forgo trade with the continent indefinitely. To them there seems much less risk in strengthening the Chinese industrial economy and military potential in this way than in continuing to hamper the Japanese economy by preventing the normal interchange of goods between Japan and the continent.

In the United States some feel that the question of Japanese-Communist trade is academic, because the Communists are not likely to offer terms which even Japan will find desirable to accept. This may well be true, but it does not make the problem an academic one so far as Japanese-American relations are concerned, for the Japanese cannot discover the impossibility of doing business with the Communists until they first make a sincere attempt to trade with them, unhampered by American-inspired restrictions. So long as this attempt has not been made, the dream of profitable economic intercourse with the Communists will be a powerful political force pushing the Japanese toward a realignment of their external economic and political relations and serving as a potent source of friction and misunderstanding with the United States.

The problem of Japanese trade with the Communist continent, thus, is likely to become more acute with time. How it develops or is eventually solved depends to a large extent on the unpredictable course of world events as a whole, but it is not hard to imagine a situation in which it would become the prime cause for a complete disruption of cooperation and friendship between the United States and Japan. For instance, if the Japanese economy remains as weak as seems probable, the Japanese are likely to become more insistent on the necessity for substantial trade with China just at a time when the United States may be demanding a greater degree of rearmament in Japan. Instead of compromising these demands each country might become more intransigent because of what it consideresconsiders [sic] to be the unreasonable attitude of the other, widening the cleavage between them by alternating acts of attempted coercion or defiance. Thus the