Japan PM Ishiba likely ‘weakened’ in tariff negotiations with US: Analyst

Japan PM Ishiba likely ‘weakened’ in tariff negotiations with US: Analyst

Japan’s ruling LED coalition is projected to lose its majority in the upper house. This deals a major blow to Prime Minister Shigerro Ishiba who’s vowed to stay in his post to achieve the country’s economic goals. Public broadcaster NHK said that the ruling coalition has secured 47 seats with one seat yet to be decided. It needed 50 to retain control of the House. Mr. The Shapas government is facing concerns over Japan’s cost of living crisis and growing anti-immigration sentiment as President Trump’s tariff deadline looms as well. For more, let’s speak now to Ellis Krauss. He’s Professor Emmeritus at the School of Global Policy and Strategy at UC San Diego. Professor Krauss, thank you so much for joining us on the show today. So, thank you for having me. So, what exactly is the projected result saying, Professor? Because we we know that the LDP knew it had to fix inflation. It had to fix stagnant wages after losing the lower house in October. So what happened? You think? Was it for lack of trying? Was it the wrong policies? Or was it just or did it just run out of time? Well, I call this the damned if you do, damned if you don’t election because no matter who was governing, I think they would have a difficult time both solving Japan’s challenges but at the same time satisfying the Japanese voter uh and the opposition parties. Um to give one example, if Ishiba stands up to Trump on tariffs, but Trump imposes the draconian tariffs he’s promised to get to hit Japan with, including on their key industry of automobiles, the economy will tank or go down and that will dissatisfy the voters. If he doesn’t stand up to Trump and gets into some sort of halfway decent agreement, he’ll be accused of being weak by the opposition parties who want him to stand up to Trump. So there’s no way that Ishiba could win on that issue. There are several other issues that Ishiba would have a hard time winning on as well, including the price problem uh and the debt problem. No matter what he does, the opposition parties are going to demand the opposite. And this is a key characteristic, unfortunately, of many opposition parties in Japan. I must say that this election also shows the influence of social media, as did last year’s House of Representatives election, and the results of it are not good, as they have not been good in many countries, including my own. the um so social media had an impact and I think what you’re seeing frankly is the fragmentation of the Japanese party system whether on the left or the right the conservatives or the opposition they’re all fracturing in one way or another from the past. Understood, professor. So he’s caught between a rock and a hard place. He in the meantime is saying I’m not stepping down. So what options does he have now? Isn’t he actually very vulnerable, you know, to possible no confidence votes going ahead? He’s very vulnerable to that, but at the same time, he’s done actually better than many pundits predicted in handling the same situation in the lower in the lower house, which is actually the more powerful house, the House of Representatives. He did not take another party into coalition. He stuck with the Clean Government Party. has been a coalition partner for years. But what he’s done is what frankly many pundits missed and that is the LDP did back in the 70s when it nearly lost the majority and that is it negotiated bill by bill with particular opposition parties and actually the passage rate at that time actually went up for the ruling party. Um the situation is different now of course but he is probably going to try the same thing for the upper house as he’s done for the lower house. Fortunately for him, there are two middle-of the road center parties who don’t disagree that much with the LDP on some key issues and that is the renovation party which is based upon the concai region and also the big winner of this election by the way the um democratic party for the people which is a center party. It agrees with the LDP on security, defense, and foreign policy generally, but it’s more to the left on social issues. The big danger for this government is spending. Frankly, the uh markets are very jittery right now because the LDP did not win a major majority, which would have at least uh sent a message of stability. They didn’t lose by much. they the actual predictions for the range of um minimal and maximum losses, it was right in the middle on almost every party according to the polls. Um so they didn’t do as well as they had hoped. They didn’t do as badly as they could have is is the message of this election. But what it’s going to mean is almost every opposition party, even the center parties are demanding some sort of relief for consumers given the price increases. The growth in wages since January have gone down 3%. And the consumer price index and not including food has gone up 3%. So there’s quite a net loss for consumers and that is what they’re so angry about. Frankly, the foreigner issue is a very complicated one. The other big winner in this election was the new party, the Sansto, which also won 13 seats. And uh it is just a xenophobic uh party that makes absolutely outrageous and untrue claims. Um this is something we’re used to in the US for the last 200 years, immigrants becoming the target of political claims in order to gain support. It’s very new in Japan in the post-war and um it could be dangerous. It could just be a flash in the pan. I think it’s a combination really of over tourism, but the real targets of this new party are not the tourists, but the permanent foreign residents, especially those from Asia and Africa. And there’s just very little justification for their outrageous claims about them. uh and uh there’s just nothing you can do now with social media, you know, propagating all of these false claims and many voters buying into it. Obviously, professor, I want to go back to uh that big deadline, August 1st, uh that you mentioned at the start of your chat with us with these 25% tariffs that Japan needs to whittle down. Can you talk to us about the real impact that this election result has on Japan’s position in negotiating with the Trump administration? Is it significantly weakened and that tariff negotiator that the US has become used to say Akazawa um does this make him you know in a in a position that’s a little tight like who does he answer to now at home? Well, he answers to Ishiba really, but at the same time, this is again the damned if you do, the damned if you don’t uh problem especially with the tariffs and that is Ishiba cannot appear weak although the election is over but uh if he appears weak the demands for his resignation could uh increase both from within the party and without. um if he doesn’t get an agreement because he stands up to the US that will make a lot of Japanese and opposition parties happy. But at the same time, the economy is not going to do well as a result in the short term at least. So again, he’s in a very difficult position. This election has not made that better. It isn’t disastrous. It could have been disastrous, but it is probably weakened him in negotiations with the US. I think Japan is going to have to make some sort of concessions. I don’t know what those could be. Uh many people and economists have pointed out Japan really is why Japan is even the target of Trump’s rage is beyond a lot of economists. Um it is not a major problem for the US. It’s just has a trade deficit. Well, lots of countries have trade deficits for the US for good reasons. Consumers don’t buy US products in many cases. Professor, you know, as the LDP coalition government grapples, you know, with what to do, no good uh, you know, I suppose solutions as you were saying, is there anything that the opposition can draw? I mean, is it in a position, I mean, you you mentioned two who are centrists and who might align themselves with uh uh Ishiba, but there are eight others. I mean, are they in a position to be united and form an alternative government? Uh, I think absolutely not. If you look at the opposition parties and there were 10 major opposition parties running in this election not counting the very small insignificant ones and there are many more of those. Um the opposition ranges from extreme left to extreme right and everything in between. There are many single issue parties. Uh it’s a party to abolish NHK the public television network and that’s its major issue for example. um they don’t agree on anything except they’d love to achieve power and some of the major opposition parties might have a chance at that if they could get the smaller opposition parties to go along and if they could find agreement among themselves. So far that has not happened and frankly I think it’s unlikely to happen although not impossible. Um but I think it’s more likely that they will indivi on individual bills cooperate the major opposition parties with the LDP. Um the real difficulty for the LDP is that all the opposition parties want tax cuts. Some on gasoline taxes which of course would exacerbate the climate pro problem and Japan’s goals in that area. Another damned if you do, damned if you don’t. um and they want and or they want a cutting of the consumption tax. But if they do that, it increases the Japanese deficits and the currency market, the bond market, which is already very jittery. Um and and the stock market in Japan are not going to like that. So it is a very very difficult problem for Ishiba. I don’t I don’t envy him at all. I don’t know what he can do to satisfy both the opposition parties and face the challenges that Japan faces right now. Thank you so much, Ellis Krauss, professor emmeritus at the School of Global Policy and Strategy at UC San Diego. And you can get more coverage on Japan’s political landscape. And that’s at our website cn.asia, Asia, also via our mobile app, including this article that dives into PM Shigeru Ishiba’s projected week mandate and how it could impact the country’s economy and its relations with the US.

Japan’s ruling coalition lost control of the upper house in an election on Sunday (Jul 20), further weakening Prime Minister Shigeru Ishiba’s grip on power. While the ballot does not directly determine whether Ishiba’s administration will fall, it heaps pressure on the embattled leader who also lost control of the more powerful lower house in October. Ishiba’s government is facing concerns over Japan’s cost of living crisis and growing anti-immigration sentiment as United States President Donald Trump’s tariff deadline looms. Ellis Krauss, Professor Emeritus at the University of California San Diego’s School of Global Policy and Strategy, shares with CNA’s Asia First his thoughts on the impact the election result has on negotiations with the Trump administration.

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