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Julian Ryall

Japan’s exporters face mounting uncertainty as they brace for potential new US tariffs under Donald Trump’s second term, with many working on tactics to limit the impact of the president-elect’s “America first” policy.
Individual companies are playing their cards close to their chests, however, wary that their apprehensions could draw unwanted attention from the incoming administration – leaving business organisations to articulate the collective worries of Japanese firms.
Masakazu Tokura, chairman of the Japan Business Federation (Keidanren), told a press conference in Tokyo on November 26 that if Trump followed through with his plans to impose tariffs on all imports, then there would inevitably be a negative effect on Japanese firms.
“If this really happens, the impact on Japanese companies could be enormous,” he said. “We will closely monitor the situation.”

He cautioned also that Trump could be underestimating the responses of America’s trading partners.
“If an economic power like the United States raises tariffs, it might result in countermeasures which could affect many countries. These measures would have a significant impact on America as well,” Tokura said.
“As we have always said, we hope that the US will exert its leadership to support a free and open economic order based on international rules.”
Keizai Doyukai, of the Japan Association of Corporate Executives, had expressed similar reservations, saying in a statement issued on November 6: “We will keep an eye on the development of the new US administration going forward, such as a line-up of its members, which may show how the policy measures advocated by the former president in the election campaign will be crystallised.”
The association called on Japanese Prime Minister Shigeru Ishiba to meet Trump as soon as possible to “build a personal relationship”, but also to hedge the nation’s bets by working with China to “activate trade and investment in a mutually beneficial manner”.
It also wants Japan to develop “more robust relations” with the developing economies of the Global South, such as India and the member states of the Association of Southeast Asian Nations, and encourage more nations to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
The association said it would send a delegation of senior executives to Washington in February, to get a better understanding of the new administration’s policies and the feelings of US business leaders – but added that Japan must “brace for various scenarios”.

Japanese companies are “concerned” but are making preparations for whatever hurdles the Trump administration might throw up, according to Martin Schulz, chief policy economist for Fujitsu’s Global Market Intelligence Unit.
“Japan has one of the highest current account surpluses with the US so it is clear that Japan will be on the radar of the Trump 2.0 administration,” he told This Week in Asia.
“On the other hand, Japanese exports are extremely competitive at the moment because the yen is extremely weak and is likely to remain that way.”
By strategically investing in US manufacturing to circumvent import duties, Japanese firms have an edge over other countries seeking to sell to the American market.
“This allows the Japanese government to point out to their US counterparts that they should not simply look at the trade figures, but focus more on the jobs that Japanese firms have created in the US,” he said. “That is a very strong argument, that Japan is a partner, not a competitor.”
Many Japanese firms – particularly in the automotive sector – have similarly invested in facilities in Mexico and Canada, to take advantage of the trade agreement that Trump signed with those two countries in his first term in office. Trump now appears to be undermining that deal and has identified Mexico and Canada as states that will be subject to new import tariffs.
If Trump cannot be talked around from tariffs, Japanese firms are hoping that the three nations are able to reach a new agreement that would continue to permit an uninterrupted flow of trade across their borders, although some firms are seeking alternative arrangements.
Masanori Togawa, chairman of air conditioner maker Daikin Industries, said on Monday that if Trump introduced new duties of as much as 25 per cent on imports from Mexico, where Daikin has manufacturing plants, it would switch to producing for markets in South America.

Car manufacturers may be facing the biggest challenges, with Honda Motor and Toyota Motor both having plants in nations neighbouring the US. Toyota made 520,000 cars in Canada in 2023, with a large number shipped to the US. Honda produced 370,000 units in Canada during the same period, with 77 per cent sold over the border.
Other sectors that are “vulnerable”, according to Schulz, are large-capacity storage batteries and the electronics industry.
Noriko Hama, a professor of economics at Doshisha University in Kyoto, said the Japanese economy was likely to be better able to weather the inevitable storm that would follow the introduction of tariffs as it was less dependent today on exports than it was in the 1970s and 1980s.
“Individual companies know they will have to act to protect their businesses, but I am sure there are ways they will be able to circumvent these tariffs,” she said. “It is also very possible that they may be threats that are never put into action, a show for the domestic audience as he promises to protect ‘Fortress USA’, which goes down wonderfully with the public there.
“Japan and Japanese companies need to approach trade issues with the Trump White House in a very calm and detached way and avoid anything that riles him up,” she added. “There are ways around the problem.”


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Japan

From Toyota to Daikin, Japan’s exporters brace for tariff pain under Trump 2.0

Cars for export are loaded onto a cargo ship at a port in Yokohama. Japanese exporters are working on tactics to limit the impact of Donald Trump’s “America first” policy. Photo: AP

Masakazu Tokura, chairman of the Japan Business Federation, known as Keidanren. Photo: Kyodo

US president-elect Donald Trump has said he will hit China, Mexico and Canada with new tariffs. Photo: Getty Images via AFP

A Honda EV is seen at a motor show in Thailand in November. Honda is among the Japanese manufacturers with plants in countries neighbouring the US. Photo: EPA-EFE

Crunch time for Japan’s Nippon Steel in race to complete US Steel takeover before Trump 2.0

The Nippon Steel logo is displayed at the company’s headquarters in Tokyo, Japan. Photo: Reuters

Donald Trump has vowed to block the Nippon Steel acquisition of US Steel. Photo: TNS

US Steel’s Mon Valley plants in Pennsylvania. Nippon Steel has said it is pushing ahead with the acquisition of the US steelmaker. Photo: AP

As China looks to rebuild bridges with Japan, will ‘better relations’ last beyond Trump?

Japanese Prime Minister Shigeru Ishiba (left) and Chinese President Xi Jinping shake hands ahead of their talks in Lima on November 15. Photo: Kyodo

A China Coast Guard vessel sails near a Japan Coast Guard vessel off Uotsuri Island, one of a group of disputed islands called Senkaku Islands in Japan, also known in China as Diaoyu Islands, in the East China Sea. Photo: Kyodo via Reuters

Travellers wait in line to check in for flights to Japan at Beijing Capital International Airport. Chinese President Xi Jinping has expressed a “strong commitment” to advancing people-to-people exchanges between the two countries. Photo: Kyodo

Japan downplays Trump pick Tulsi Gabbard’s warnings of its military threat to US

Donald Trump alongside Tulsi Gabbard during a town hall meeting in La Crosse, Wisconsin, on August 29. Photo: AFP

Is Japan’s Ishiba too ‘weak’ to deal with Trump? Split views on when meeting should occur

Japanese Prime Minister Shigeru Ishiba. Photo: Pool via Xinhua

Japanese Prime Minister Shinzo Abe shakes hands with US President Donald Trump during their meeting in the Oval Office at the White House in Washington on February 10, 2017. Photo: Reuters

Japan braces for Trump’s return, fears trade war and military pressure: ‘we just do not know’

A selection of newspaper front pages in Tokyo on November 7, with images of US president-elect Donald Trump the day after his election victory. Photo: AFP

Japan’s then Prime Minister Shinzo Abe and Donald Trump in November 2016. Photo: @realdonaldtrump/Instagram

A group of disputed islets, known as the Diaoyu Islands in China, and the Senkakus in Japan, are seen in the East China Sea. Photo: Kyodo/Reuters

Donald Trump visits his campaign headquarters in West Palm Beach, Florida, on November 5. Tokyo is concerned about a second Trump administration due to his unpredictable decision-making. Photo: Reuters

This Week in Asia

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Asia

East Asia

Japan should work to show Trump it is a partner instead of a competitor, and develop ‘more robust’ ties with other economies, analysts say


Japan should work to show Trump it is a partner instead of a competitor, and develop ‘more robust’ ties with other economies, analysts say.
