US-China trade war impact on Japan limited but risks high if United States imposes new tariffs, analysts say
- New American tariffs would hit smartphones, computers and other products for which Japan is a large supplier of components and fabricating machines
- Beijing expected to enact more economic stimulus measures to offset impact of any new American tariffs imposed by US President Donald Trump
The US-China trade war has so far only had a limited impact on Japan’s lukewarm economic growth, but the affect is likely to grow if Washington imposes further sanctions on Chinese imports, Japanese analysts said.
The downward pressure on Japanese growth over the last year, in fact, has been less to do with the trade war and more to do with declining global demand for smartphones, which has hit Japanese exports. The lingering effects of China’s deleveraging campaign to reduce debt and risky lending that has cooled Chinese investment in new equipment, much of which is manufactured in Japan, has also played a part.
The stakes are high not only for Japan, but for global trade as Japan is the second largest economy in Asia and the third largest in the world behind the US and China.
“The US-China trade dispute so far has had hardly any impact on Japan,” said Mitsubishi UFJ Research and Consulting economist Shinichiro Kobayashi. “If anything, Chinese companies have been cautious about capital investment in anticipation of an escalating trade dispute, which has lowered demand for Japanese machines.”
