Economy Japan Inc. and Trump 2.0

[thomas]

William Pesek argues in Forbes magazine that with Trump 2.0 looming, Japan better brace itself for unprecedented economic challenges ahead: Trump pledged to impose 60% tariffs on China and perhaps a 20% blanket across-the-board levy on all goods globally.

Though Trump's initial 2017-2021 trade war was largely aimed at China, Japan arguably suffered the worst collateral damage. One of Trump's first major acts in 2017 was unilaterally withdrawing from the Trans-Pacific Partnership trade pact, leaving Japan in a tight spot vis-à-vis China. The U.S.-led TPP was aimed at curbing China's economic dominance. Trump 2.0 could be far more calamitous for Asia's second-biggest economy. One reason is that Japan Inc. isn't in a great place as 2025 approaches. For example, Japan's 2.4% inflation rate is outpacing average wage gains at a moment of decelerating national growth. The yen is sliding again, upping the risks that Japan will import more inflation via elevated energy and food prices. These are the pre-existing conditions that Japan will carry into the Trump 2.0 era and the ginormous trade wars sure to shake Asia's economic foundations.

In last month's election, the Liberal Democratic Party experienced its third significant loss of outright power since 1955. Although Prime Minister Shigeru Ishiba remains in office, he now leads a minority government with limited political leverage to push forward economic reforms. Since the early 1990s, Japanese leaders have typically only lasted around 12 months in office. This short tenure forces them to focus more on maintaining their positions than effectively governing. So far, Ishiba's time in office, which began on 1 October, has shown little indication that he will be known for significant accomplishments.

However, Japan could benefit by pushing through structural reforms long overdue:

That's a bigger problem than usual, as Trump 2.0 makes giant trade wars great again. If there's any silver lining here, it's that Trump's policies will catalyze Japan to become more self-reliant. Its $4.2 trillion economy is still too dependent on exports for comfort. Trump's return may light a fire under Japanese bureaucrats to accelerate efforts to increase the role of domestic consumption in driving growth. There's not a moment for Ishiba's new government to waste, particularly if he, too, only gets one year in office. Topping his to-do list are moves to reduce bureaucracy, loosen labour markets, incentivize greater innovation and productivity, empower women and convince global investors to rediscover Tokyo stocks that fresh upgrades are underway.

Trump 2.0 Will End Japan’s ‘Peter Pan’ Act Once And For All

It’s been nearly a decade since then-Bank of Japan leader Haruhiko Kuroda amused global markets with talk of Peter Pan saving the day.

www.forbes.com

 

[thomas]

Meanwhile, the Asian Times argues that Trump 2.0 could bring Japan and China closer together:

However, the potential effect of Trump's policies on relationships between other countries is much less discussed. In the absence of US trade and security guarantees during Trump's first term, regional rivals China and Japan entered a detente, a period of thawing relations. With Trump's second term on the horizon, will relations between China and Japan again thaw? The Chinese-Japanese relationship is an example of "hot economics, cold politics." This term, which originated in the early 2000s to describe the distinctive relationship between these two countries, still holds today. Over the next decade, China and Japan have agreed to cooperate on an estimated $26 trillion of regional infrastructure projects. In 2021, trade between China and Japan edged above US$372 billion. Japan now serves as China's second-largest trade partner, behind only the US, with China serving as Japan's largest trading partner. Yet political animosity is a source of continuing tension. Japan's invasion of China during the Second World War, in which over 20 million Chinese people died, has left an enduring legacy. Anti-Japanese sentiment is a core characteristic of contemporary Chinese nationalism, which routinely calls for vigilance against what it considers to be an inherently militaristic Japanese culture.[/center]

Trump 2.0 could drive China-Japan closer together - Asia Times

Donald Trump was declared the winner of the US presidential election on November 6, sealing a historic and improbable return to the White House. His

asiatimes.com

 

[mdchachi]

Trump pledged to impose 60% tariffs on China and perhaps a 20% blanket across-the-board levy on all goods globally.

Trump almost never follows up on his pledges, promises or rhetoric so I highly doubt this will happen. I doubt they would put tariffs on goods that the U.S. doesn't make domestically which is almost everything. Maybe they will for certain agricultural special interests.

 

[salyavin]

I agree, Trump says and tweets many things but it is not clear what he will actually do. I was just telling my wife that yesterday. Tariffs making things more expensive especially the vast number of things not made in the US is just not likely and would lead to a lot of anger from his own base.

One he said that may be convenient is Trump wants to end the 'double taxation' of Americans living overseas. What could change if it removes having to do tax paperwork while abroad as a US citizen. We are not quite sure what he means. Most US citizens abroad are not double taxed.

"The real problem for U.S. citizens living abroad is the administrative burdens of filing a U.S. tax return to do these calculations," says Luscombe. "It is not clear what the Trump campaign is proposing, whether it is to cease U.S. taxation of U.S. citizens living abroad except on their income from U.S. sources, or some more limited steps to try to address compliance burdens."

 

[musicisgood]

I agree, Trump says and tweets many things but it is not clear what he will actually do. I was just telling my wife that yesterday. Tariffs making things more expensive especially the vast number of things not made in the US is just not likely and would lead to a lot of anger from his own base.

One he said that may be convenient is Trump wants to end the 'double taxation' of Americans living overseas. What could change if it removes having to do tax paperwork while abroad as a US citizen. We are not quite sure what he means. Most US citizens abroad are not double taxed.

"The real problem for U.S. citizens living abroad is the administrative burdens of filing a U.S. tax return to do these calculations," says Luscombe. "It is not clear what the Trump campaign is proposing, whether it is to cease U.S. taxation of U.S. citizens living abroad except on their income from U.S. sources, or some more limited steps to try to address compliance burdens."

Actually one is taxed oversea if their income is over 92000 dollars ( something like that ). I am not taxed on my Social Security or Japanese pension here, but the Biden administration I got the feeling something is about to change and it has nothing to do with Trump. As the letter I got from the (... US ) is under the Biden administration.
The want to tax the freaking hell out of us living overseas. Believe me, they will do it to. Try opening a bank account without a US Social Security Number and your employer needs its also. I know, I've had to do it.

 

[johnnyG]

Try opening a bank account without a US Social Security Number and your employer needs its also. I know, I've had to do it.

Really? --you don't have a social security number? (then how are you getting social security?)

Retirees (above a certain age) have a larger basic exemption here in Japan, but when you do your tax filing here, Social Security (which you can list as: アメリカ合衆国社会保障制度) is at least classed as pension income (and not salary/earned income).

And you also include your pension here, along with social security payments received, on your US tax filings.

Banking is extremely easy with the state department federal credit union (SDFCU). Easy to set up with a foreign address, can cash US checks, and I think you can even get a credit card.

 

[salyavin]

"Americans living abroad to exclude their foreign earned income by up to $126,500 per person in 2024," Working in Japan (or Thailand) it is not terribly common to make that much as an individual as Japanese salaries are lower. I work in information technology and if I was in Japan I would make well below that for the same position, not only due to the base salary being a LOT lower but the yen to dollar value. If I am there on a temporary corporate rotation that does pay US wages but that is not going to happen again and is a lot less common these days I believe. There are a few corporate elites who can do it, oil work, dangerous work in the middle east but I believe they are a tiny fraction of US citizens especially in Japan. US citizens working for local wages are not making high dollar amounts.

Thank you johnnyG for SDFCU! I was not aware of that. Unfortunately since I did not serve I do not believe I qualify.

 

[thomas]

Wow, major news:

Live Updates: Supreme Court Strikes Down Trump's Sweeping Tariffs

The Supreme Court ruled Friday that President Trump exceeded his authority when he imposed sweeping tariffs on imports from nearly every U.S. trading partner, a major setback for his administration's second-term agenda. The court's 6-3 decision has significant implications for the U.S. economy, consumers and the president's trade policy. The Trump administration had said that a loss at the Supreme Court could force the government to unwind trade deals with other countries and potentially pay hefty refunds to importers. Mr Trump is the first president to claim that a 1970s emergency statute, which does not mention the word "tariffs," allowed him to impose the duties unilaterally without congressional approval. Chief Justice John G. Roberts Jr. said the statute does not authorise the president to impose tariffs. "The president asserts the extraordinary power to unilaterally impose tariffs of unlimited amount, duration, and scope. In light of the breadth, history, and constitutional context of that asserted authority, he must identify clear congressional authorisation to exercise it," the chief justice wrote.

Supreme Court Strikes Down Trump’s Sweeping Tariffs: Live Updates

In a major setback for President Trump’s economic agenda, the court ruled that he could not invoke the International Emergency Economic Powers Act of 1977 to set tariffs on imports.

www.nytimes.com

Does this render all the tariff agreements nil and void? Will Japan still be committed to its 550bn USD "investment deal"?

 

[Ukigumo]

Trump's a d*ck!

 

[Grandpa Frank]

Executive order doing away with the Supreme Court coming soon , LOL.

 

[mdchachi]

Does this render all the tariff agreements nil and void? Will Japan still be committed to its 550bn USD "investment deal"?

So far it just means the Trump is not accepting the ruling and says he will continue to apply tariffs via other laws.

Trump's a d*ck!

?

 

[Grandpa Frank]

Wondering when ICE agents will arrest the Supreme Court justices ??

 

[Ukigumo]