The U.S. trade deficit with Japan had just begun to be statistically,
and certainly politically, significant. But even when it amounted to only
a few billion dollars, I saw that it could become a major economic and
political issue over time. As a result, I was deeply involved in trying to
persuade Japanese officialdom to liberalize trade, open markets, and
revalue the yen to a more credible level. Innumerable Japanese trade
and political delegations came to see me in those days, trying to convince
me that it was impossible for Japan to make these changes. From
the head of Nippon Steel, which had emerged as one of the world’s
largest steel companies, and from many other CEOs of what were by
then world-class Japanese companies, I heard the ritualized incantation
about how Japan was a “humble island nation with no natural
resources still suffering from the devastation of the war.” This “poor”
nation could not possibly make the changes Americans wanted, I was
told over and over