Export Hit to Japanese Cars Inevitable with Introduction of Universal Tariffs
As former President Donald Trump's return to the White House becomes more visible, voices expressing concerns about the 'America First' policy are spreading, especially among Japanese media.
On the 16th, local public broadcaster NHK reported on Trump's official nomination as a presidential candidate, forecasting that if a second Trump administration is launched, exports to the U.S. could decline due to additional tariffs and the yen could weaken.
Previously, former President Trump had announced that if re-elected, he would impose a universal 10% tariff on trade partners and a high 60% tariff on Chinese imports. The U.S. Republican Party also officially adopted a platform including Trump's signature pledges such as universal tariffs, increased traditional energy production, deportation of illegal immigrants, and large-scale tax cuts, signaling the advent of 'Trump 2.0.'
NHK analyzed this by stating, "On the surface, it appears to be a tough stance against countries with trade surpluses with the U.S., such as China and Mexico, but if universal tariffs are uniformly introduced, Japan will inevitably suffer export hits, especially in the automobile industry." It also pointed out that if additional tariffs raise inflation, long-term U.S. interest rates will rise accordingly, potentially sustaining yen weakness. However, since Trump had previously criticized 'a weak yen as a disaster for the U.S.,' predicting the direction of the yen-dollar exchange rate remains difficult.
Japanese media also focused on the background of J.D. Vance, the Republican vice-presidential candidate. The Yomiuri Shimbun explained that Senator Vance hails from the 'Rust Belt' and has strongly opposed Japan Steel's acquisition of U.S. Steel. NHK also diagnosed that "Vance, born in Ohio where the automobile and steel industries once thrived, may strengthen policies for the manufacturing working class."
With the possibility of Trump's return to the White House emerging, countries around the world, including Japan, are busy preparing countermeasures. Japan, where the term 'Moshitora' (meaning 'What if Trump') had circulated early on, attracted attention with its swift 'insurance-taking' diplomatic strategy, including the summit between Prime Minister Fumio Kishida and President Biden in April and a meeting between former Prime Minister Taro Aso, the ruling party's second-in-command, and former President Trump.
Additionally, Germany reportedly dispatched Michael Link, the Coordinator for Transatlantic Cooperation, as a special envoy to the U.S. earlier this year to engage with Republican governors, initiating behind-the-scenes efforts to prepare for potential punitive tariffs on European Union (EU) imports by the U.S.
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