I'm interested, how did US economic/military power feed in to the Plaza Accord?

mark_l_watson 4 days ago | parent | next [-]

Short answers: dollar dominance and market access leverage.

The argument for benefits of US economic power are clear. Less clear is military power:

The Plaza Accord was framed as cooperation among G5 allies. But in practice U.S. security guarantees gave it disproportionate influence. Japan, for example, had little independent military capability, so its security reliance on the U.S. translated into willingness to accept U.S. economic pressure.

	▲	bigthymer 4 days ago \| parent [-]
		> The Plaza Accord was framed as cooperation among G5 allies. But in practice U.S. security guarantees gave it disproportionate influence. Japan, for example, had little independent military capability, so its security reliance on the U.S. translated into willingness to accept U.S. economic pressure. Really hit the nail on the head here. If we extrapolate this way of thinking to Europe, the US keeps pushing Europe to fund more of its own defense. If Europe does so, the US will probably find that a more independent Europe may be less likely to agree with the US on other global issues since Europe will need the US less in Europe.

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dworks 4 days ago | parent | prev [-]

They made Japan agree to doubling the exchange rate of the Yen, which crashed their exports among other things.