In May 1946 Ishibashi became finance minister in the first Yoshida Shigeru cabinet. During his tenure Ishibashi promoted expansionary fiscal policies, which were consequently criticized by the Allied occupation General Headquarters (GHQ) as promoting inflation. Conflict with the GHQ led to his absence from public office during May 1947–June 1951.
Meanwhile, in the face of the 1950–1953 Korean War, Ishibashi advanced the idea of limited Japanese military rearmament. While out of office, his opposition to Yoshida brought him into close association with Hatoyama Ichirō, and in December 1954 Ishibashi was appointed minister of international trade and industry in the Hatoyama cabinet. In this capacity, Ishibashi promoted trade expansion with the People's Republic of China (PRC) by encouraging private trade relations.
After Hatoyama's 1956 retirement, Ishibashi was elected president of the Liberal Democratic Party and formed his own cabinet in December 1956. As prime minister, he proposed further trade with the PRC, with the ultimate aim of normalizing bilateral relations. After only two months in office, however, he resigned because of illness.
Ishibashi continued to maintain his interest in improving Japan's relations with the PRC and the Soviet Union. He visited Beijing in 1959 and 1963 and traveled to the USSR in 1964. In his later years, he advocated a peace alliance that would include China, Japan, the Soviet Union, and the United States. Ishibashi died in Tokyo on 25 April 1973.
Nolte, Sharon H. Liberalism in Modern Japan: Ishibashi Tanzan and His Teachers, 1905–1960. Berkeley: University of California Press, 1987.