A recent Reuters survey reveals that nearly 90% of Japanese companies anticipate negative impacts from U.S. President Donald Trump’s policies, highlighting significant concerns within Japan’s business community.
Widespread Business Concerns
The survey, conducted by Nikkei Research, gathered responses from 233 firms between February 4 and February 14. Approximately 86% of respondents indicated that Trump’s policy measures would adversely affect their business environment, a notable increase from 73% in December.
Among the concerns, 72% of companies pointed to Trump’s trade strategies, including the imposition of additional tariffs, as the most detrimental factor. Additionally, 26% cited escalating U.S.-China tensions as a significant issue. A manager at an information services firm commented, “Ratcheting up protectionism has nothing but a negative effect on the global economy.”
Specific Industry Impacts
The automotive sector faces particular challenges. President Trump has threatened to impose 25% tariffs on auto imports by early April, which could have far-reaching consequences. An official at an electronics company noted, “If the auto industry took a hit from tariffs worldwide, semiconductor sales may be affected as well,” highlighting potential ripple effects across related industries.
Nissan’s CEO, Makoto Uchida, expressed concerns over proposed tariffs, indicating that such measures could prompt the company to relocate production from Mexico. With 320,000 vehicles exported annually from Mexico to the U.S., tariffs would significantly impact operations. Uchida stated, “We may have to consider shifting production if tariffs are enforced.”
Governmental Responses
In response to these challenges, Japan’s Trade Minister, Yoji Muto, plans to visit the United States in March to seek exemptions from the proposed tariffs on steel and automobiles. Muto aims to engage with U.S. officials, including Commerce Secretary Howard Lutnick and Energy Secretary Chris Wright, to discuss potential solutions and emphasize the importance of the automotive industry to Japan’s economy.
Monetary Policy Perspectives
The survey also explored sentiments regarding the Bank of Japan’s recent interest rate hike to 0.5%. A majority, 61%, viewed the increase as appropriate, while 25% believed it was premature. Opinions on future rate hikes varied, with 24% suggesting an increase in the July-September quarter and another 24% advocating for delays until the following year or beyond.