Almost nine out of the 10 Japanese enterprises expect US President Donald Trump’s policies to adversely affect business, a Reuters study said on Thursday.
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Almost nine out of the 10 Japanese enterprises expect US President Donald Trump’s policies to adversely affect business, a Reuters study on Thursday said, the clearest sign of increasing concern in the highest direct investor of the United States.
The survey results show how the prospect of higher tariffs and the increase in the friction of trade between the United States and China has captured the view of companies in the world’s fourth largest economy.
Japan, a strong American ally, is also deeply dependent on China as a production base and a major market for its machinery and other exports.
About 86% of respondents said Trump’s policy measures would have an unfavorable or somewhat opposite effect on their business environment, with the remainder expecting a positive or somewhat positive impact.
In the same monthly study in December, 73% said Trump’s second term in the White House would be harmful to their business environment. Trump officially took office last month.
Among the firms that considered Trump’s policy initiatives as negative, 72% chose his trade strategy – including the imposition of more tariffs – as the most harmful factor, and 26% chose the deepening of friction between the United States and China.
“Protectionism reconciliation has nothing but a negative effect on the global economy,” a manager wrote in a study service firm.
Trump has already announced 25% tariffs on steel and aluminum imports, imposed 10% fees for goods from China, and threatened Canada and Mexico with steep tariffs, which are currently in a 30-day detention.
He has also led his economy team to create plans for reciprocal tariffs for any country taxing US imports and to oppose non-tariff obstacles.
Japan does not impose car tariffs, but the US government said during Trump’s first term that a variety of non-tariff barriers prevented entering the Japan automobile market.
On Tuesday, Trump threatened tariffs “in the 25%” neighborhood for automatic imports as April 2.
“If the vehicle industry were to get a hit of tariffs around the world, semiconductor sales can also be affected,” one official in an electronic company said, underlining a possible effect.
Delegation is seen positively
Among the firms that saw Trump’s policy measures as positive, 37% chose tax regulation and tax reduction as the most useful factor, while 37% chose his policy to help increase fossil fuel production .
Asked about their plans for business operations and investment in the United States, 16% said they were taking a more careful stance, while 80% said they had no plans for changes.
During his first meeting within the person with Japanese Prime Minister Shigeru Ishiba this month, Trump pushed Japan to invest in American energy and technology and demanded a way out of a US Nippon Soppon dispute (XN), opens the new tab.
Trump said Nipon Steel was now watching a “investment not a purchase”, and he was fine with that. Japan’s senior government spokesman Yoshimasa Hayashi later said that the Japanese steel manufacturer was thinking of proposing a bold change in plan from his previous approach to seeking a purchase.
The survey was conducted by Nikkei Research for Reuters for 11 days until February 14th. Nikkei Research reached 505 companies and 233 responded in anonymity.
Evaluate the impact of growth
At the Bank of Japan, 61% of respondents saw its latest increase in the rate, as it was appropriate, while 25% believed that the step was taken very early and 15% considered it too late, the survey said.
Boj raised interest rates to 0.5% from 0.25% in January in the view that Japan was on the verge of steady reaching its 2% inflation target.
“The excessive weakness of Jeni caused the constant flow of national wealth. To arrest the trend, further interest rate growths are OK,” one manager said in a majority.
“This will push those companies that cannot survive in a” world with interest rates “, which must be a normal state, bend or transform.”
Asked about the ideal time for the other rate increase, 24% chose July-September quarter this year and 24% of the other chosen “next year or later”, while 24% showed that rate increases do not were desirable at any time.
Central Bank Board member Naoki Tamura said this month that the paint should increase interest rates to at least 1% to the second half of the fiscal year starting in April.
About 44% of respondents from the survey said an increase in interest rate to 1% would adversely affect their capital costs, while 21% increase the rate mentioned beyond 1.5% would have that effect.
“In parallel with the increase in norms, we want the government to expand measures to facilitate capital spending,” one official said in a rubber producer.