During the Ikeda administration (1960–1964), Japan’s index of import liberalization accelerated from 40% in 1960 to 93% in 1964, approximately same as in the European Economic Community countries. Such rapid liberalization, however, prompted severe anxiety among the Japanese, who feared their economy might be swallowed up by “black ships.” Focusing on actions of the Economic Affairs Bureau (EAB) in the Ministry of Foreign Affairs and the leadership of Prime Minister Ikeda Hayato, this article explores the rising of Japan’s economic nationalism, its underlying logic, and how Japan government restrained it.<br> Under insistence from the U.S. government, Japan decided to liberalize its trade restrictions in 1960. Such overt foreign pressure, however, fueled economic nationalism among Japan’s governmental agencies. Believing trade liberalization was needed to not only meet U.S. demands to expand free trade and defend the dollar but also strengthen Japan’s economy, EAB urged Ikeda to take assertive action. Consequently, Ikeda expressed his determination to hasten the removal of trade restrictions when he visited the U.S. in 1961.<br> Nonetheless, intense nationalism was inherent in the Japanese government, especially among its economic agencies. Although they considered trade liberalization necessary, they rejected its basic theory—the principle of comparative advantage—fearing that Japan’s infant heavy industries might be forced out, obliging Japan to specialize only in light industries. Hoping to avoid that outcome, the Ministry of International Trade and Industry (MITI) introduced legislation titled “Temporary Measures for Promotion of Specific Industries” intended to create a new industrial structure and strengthen competitiveness of the Japanese heavy industry through public-private cooperation. However, this bill could not muster enough support for enactment because it emphasized regulation rather than free trade.<br> Instead of trade regulations, Japan’s economic agencies regarded higher tariffs as the means to prevent acceleration of imports. In opposition, the U.S. and the General Agreement on Tariffs and Trade (GATT) called for linear tariff cuts at the start of the Kennedy Round negotiations. MITI and the Ministry of Agriculture resisted drastic tariff cuts, but their insistence on protecting domestic industries was so self-serving that Japan was reproached during the GATT negotiations. It was Ikeda’s initiative that persuaded the intractable economic agencies and enabled Japan to participate affirmatively in the Kennedy Round negotiations.<br> This article concludes that Ikeda’s leadership was essential to Japan’s overcoming of the forces of economic nationalism and liberalizing its trade policies. Ikeda believed that the Japanese economy would become more vigorous and competitive through trade liberalization.