How do Japanese companies view the new US government?
With the start of the Trump administration in the United States, Japanese companies are on alert. If the proposals made before taking office, such as raising tariffs and re-examining energy policies, are realized, the impact will spread to the entire supply chain. Some business operators said, “It is difficult to deal with it in the past.” Therefore, it is necessary to prepare before the implementation of the new government’s policies.
In a speech on January 20, local time in the United States, Trump said, “I will not tax the American people to make profits for other countries, but I will impose tariffs on foreign countries to make profits for the American people.” He also told the media that it is possible to impose a 25% tariff on Canada and Mexico.
The supply chain built by Japanese companies in North America will also be affected. Panasonic Holdings Group CEO Yusuke Kusami believes that “there are many cases where products are produced in Mexico, where labor costs are lower, and then shipped to the United States. Many companies, including our company, will be affected.”
The Japanese automobile industry has many bases in Mexico. Honda Vice President Shinji Aoyama expressed his concerns at a press conference in November 2024: “If the tariffs are permanent, we will have to consider countermeasures in the medium and long term, including production in the United States or in non-tariff target countries.”
Trump said during his campaign that he would impose tariffs on China. Mutsuo Iwai, president of Japan Tobacco (JT), which acquired a US company in 2024, said: “We must consider how to build logistics and value chains in advance to prepare for further tensions caused by the split between China and the United States.”
In the “100 Presidents Questionnaire Survey” conducted by the Nihon Keizai Shimbun (Chinese version: Nikkei Chinese Network) in December 2024, Japanese companies doing business in China were asked about their strategies, including procurement. The proportion of those who answered “will adjust” their strategies was 8.6%, and the proportion of those who answered “considering adjustments” was 32.4%. ANA Holdings President Koji Shibata said: “There are also many goods and passengers traveling from China to the United States via Japan,” and he is closely watching the tariff trend.
In his presidential inauguration speech, Trump also proposed to increase the production of oil and liquefied natural gas (LNG). JERA President Hisayoshi Okuda pointed out that “LNG also has the risk of becoming a bargaining chip in political negotiations. The view that the United States is the most important source of purchases has not changed, but over-reliance on American energy will also cause problems in national security.”
The flow of talent, goods, and funds may also change with policies. Akijin Koichi, chairman of the Japan Shipowners Association and president of Kawasaki Kisen Kaisha, said that “the situation of shipping is becoming increasingly uncertain,” and pointed out that the business of each shipping company “will face a difficult situation if it only follows the past practices,” and has a sense of crisis.
In the Trump administration, the leadership of regulatory agencies is also unusual. Vaccine skeptic Robert F. Kennedy Jr. became the Secretary of Health, and Martin Makary, who pointed out that the current medical system is too bloated, became the Director of the U.S. Food and Drug Administration (FDA).
Chugai Pharmaceutical President Osamu Okuda warned that medical administration may undergo major changes. He pointed out: “I hope that the United States will continue to lead the world in science, evidence-based medicine and pharmaceutical administration in the future.”
On the other hand, some people believe that the operation of a government that emphasizes economic growth will bring business opportunities. Kenichi Hori, president of Mitsui & Co., said, “We will further strengthen our domestic business in the United States in areas such as transportation,” and plans to increase investment in the United States despite many uncertainties.
Furukawa Electric Industries has subsidiaries in the United States related to optical fiber cables. On the one hand, it can be expected that demand will expand, and on the other hand, it also exports automobile-related parts from Mexico to the United States. President Hideya Morihira said, “Positive and negative factors are intertwined. We will take timely and appropriate measures to minimize risks and maximize benefits.”
Mitsui Chemicals has automotive synthetic resin production bases in the United States and Mexico. Although Mexico was subject to tariffs during the last Trump administration, the production base in the United States became its advantage and promoted the increase in market share. President Osamu Hashimoto said, “If the allocation of resources such as production can be properly arranged, it may become an opportunity.”
Housing demand is also expected to expand. During his campaign, Trump proposed making it easier to buy single-family homes. “He mentioned that he would provide strong support (for the purchase of single-family homes), which is undoubtedly a tailwind,” said Sekisui Tsuen & Co. President Yoshihiro Nakai. Sekisui Tsuen & Co. will actively expand its local business, centered on M.D.C. Holdings, a U.S. company that it acquired in April 2024.