Corporate Japan’s nerves fray as US tariff talks drag onーNHK WORLD-JAPAN NEWS
trade talks between Japan and the US have been ramping up as the clock ticks on a pause in Washington’s plan to impose sweeping tariffs prime Minister Ishiba and President Trump discussed tariffs on the sidelines in Canada but they only agreed to continue negotiations at the ministerial level yukov Fushima from our business desk is here for more uh details on this issue so Yuko businesses in here in Japan were likely hoping for something uh more specific right yeah they certainly were a survey of about 7,000 Japanese firms this month found that many believe US tariffs will hurt their earnings tokyo Shoko research found that nearly 58% expect a negative impact from the tariffs announced by the Trump administration earlier this year the survey shows steel makers and rubber goods manufacturers like tire makers are especially worried the research firm notes that small and midsize companies that support the auto and steel sectors could also feel the pain even if they don’t deal directly with the US so Japanese companies are hoping Tokyo and Washington will come to some kind of understanding but there’s no sign of an agreement yet many point to differences on auto tariffs as a main obstacle the Japanese government wants to bring down the additional 25% levies on cars that were imposed by the US in April the chief economist at Ito Research Institute says that is not something the US side is likely to budge on japan certainly does not want to accept an additional 25% tariff as there were even concerns from domestic companies about the impact of a 10% levy from the start the Japanese side aimed to get the car tariffs down to zero that’s a big ask for the American side the US concluded a trade agreement with the UK but in that there’s still a 10% tariff on British cars so it would be a tall order for the US to accept any tariffs below 10% on Japanese cars tea says another reason a deal may be difficult to achieve is that neither side wants to give the impression it’s making big concessions he says the US sees the talks as progressing alongside negotiations with the EU and officials think getting Japan to concede will pressure the Europeans for the Japanese side he says there are political considerations prime Minister Ishiba has already sent Akazawa the minister in charge of the talks to the US six times so I can see that he wants to conclude a deal fast but the Japanese government is facing an upper house election so officials can’t make an agreement that shows big concessions before the election teta says Japan may be able to get the US to consider a review of its tariffs on automobile imports by making a concession in another area i think a key US demand is increased investment in its manufacturing industry as you know labor costs in the US are very high in addition it would be very costly to rebuild the manufacturing sector in the US which has weakened over the years it may be more costly and unprofitable but it’s a lot better than having no business at all teada also points out a couple of outside factors that may work in Japan’s favor one being the outcome of talks with other trading partners and the other being domestic political pressure in the US if the EU gets off lightly then it could be an opportunity for Japan too in addition to that we should keep in mind the price movements in the US if prices go up sharply because of the tariffs the American public may become critical of the Trump administration’s trade policies then President Trump may feel that he needs to quickly wrap up the tariff deal at an early date trade watchers have a close eye on a fast approaching date July 9th that day ends the 90-day grace period the Trump administration gave to negotiate after imposing what it called reciprocal tariffs on countries around the world but Tenna says the deadline may now be problematic for Washington the situation in the Middle East is quickly worsening so the US government may not have all the resources it needs to proceed with the trade talks at the moment the date of July 8th or 9th is certainly looming but I think the most likely scenario is the US administration will once again extend the date for pausing what it calls reciprocal tariffs well we may not see an agreement as so soon and there seems to be many variables that impact the course of the talks japanese companies could be dealing with uncertainty for some time to come
A survey finds most firms worry US levies will hurt earnings. An expert says Japan may need to offer more local investment if it wants the US to compromise on auto tariffs.
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