Japan Cuts Growth Forecast as Automakers Reel Under U.S. Tariffs | WION Business Watch
All right, next up we also take a look at the impact of Trump’s tariffs on global economies. Japan is one of the first countries to cut its economic outlook. The government has downgraded its GDP growth forecast for the fiscal year from 1.2% to 7%. The government cited a drag from elevated US tariffs that are curbing capital investment and dampening household consumption amid persistent inflation. This revision, while still slightly more optimistic than the private sector’s.5% forecast, underscores growing concerns over weakening domestic demand and global trade tensions. Industrial sentiment pads a murkier picture. Although Japan’s services sector enjoyed a rebound in July, manufacturing continues to sputter. Input cost pressures raising, but weaker export demand, especially in autos, remains a burden. The auto industry long bell weather for Japan’s strong export strength is bearing the brunt of Trump’s tariffs. Toyota has sharply reduced its full year operating profit forecast largely due to a hit from US import levies coupled with the strong yen and rising material costs. Honda’s outlook is comfortably strained. The company has trimmed its estimates as it adjusts to the new trade landscape. Experts say these developments reveal a fragile recovery for Japan’s economy. While services show signs of resilience, the combined pressures of elevated tariffs and softening exports threaten to stem growth and temper industrial morale.
The United States has agreed to revise a key element of its trade deal with Japan after a clerical error led to higher-than-agreed tariffs on Japanese imports. Japan’s chief negotiator, Ryosei Akazawa, confirmed that Washington will correct its July 31 executive order, reinstating a 15% tariff ceiling on Japanese goods in line with the July 22 agreement.
#japan #business #trump #tariff #wion
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