A recent survey by Reuters indicates that a growing number of Japanese companies view a potential Kamala Harris presidency as more favorable for their business interests than a second term for Donald Trump. The survey reflects concerns about protectionism and unpredictability in policies.
As the upcoming U.S. presidential election draws near, countries worldwide are closely monitoring the situation. Japan, as a key ally of the United States with thousands of American troops stationed there, would be directly affected by any renewed U.S.-China trade tensions given that both nations are among Japan’s primary trading partners.
The survey revealed that 43 percent of Japanese firms favor Harris based on their corporate strategies, whereas only 8 percent prefer Trump. Additionally, 46 percent of participants stated that either candidate would be acceptable, while 3 percent expressed no preference for either.
One manager from a ceramics company noted that a Trump presidency could lead to renewed trade wars, prompting the need to adjust business strategies. Past interactions with Trump’s administration have occasionally strained relations, particularly due to demands for increased military support payments and ongoing trade disputes.
A representative from a chemical company mentioned that under Harris, they could expect continuity in policies, allowing for greater clarity in future operations. The survey also highlighted that should Trump be re-elected, 34 percent of companies would need to reassess their foreign exchange strategies, 28 percent would realign their supply chains, and 21 percent would reduce operations in China.
Trump has suggested implementing a universal 10 percent tariff on U.S. imports and a significant tariff on Chinese goods, which could disrupt global markets. The survey, conducted by Nikkei Research between July 31 and August 9, included responses from 243 out of 506 contacted companies.
In terms of operations in China, 13 percent of Japanese firms are contemplating reducing their presence regardless of the election outcome, while 3 percent are considering expansion, and 47 percent plan to maintain their current level of involvement. Among those looking to scale back in China, 35 percent cite a lack of economic recovery potential, 29 percent highlight intense price competition, and another 29 percent express concerns over economic security.
China’s economic growth has recently slowed, with exports increasing at their lowest rate in three months, raising alarm about its manufacturing sector’s future. Notable Japanese companies like Honda Motor and Nippon Steel have recently announced reductions in their Chinese operations.
The survey also addressed recent Japanese interventions in the foreign exchange market, with 24 percent of respondents viewing these actions as appropriate. In contrast, 9 percent considered them inappropriate, and 64 percent deemed them unavoidable. The yen reached a 38-year low against the dollar earlier this year before authorities intervened to stabilize it.
Regarding interest rates, 51 percent of participants believe the Bank of Japan should only raise rates in cases of excessive currency fluctuations, while 22 percent do not support moves to alter monetary policy for foreign exchange purposes. Expectations for the yen’s performance show 32 percent anticipating it will trade between 145 to 150 yen to the dollar by year-end, while others predict it could strengthen or weaken further. The yen’s value has fluctuated significantly, illustrating ongoing volatility in the currency market.