American protectionism is throwing cold water on Japanese corporations’ overseas expansion. According to a survey conducted from November 2017 through January 2018 by the Japan External Trade Organization (JETRO), for the first time in four years less than 60% of companies said they will “expand operations overseas going forward.” Over half of companies identified “policies of the U.S. administration” as a risk factor in having operations in the United States. JETRO comments: “Risks have been increasing further recently with the U.S. import restrictions on steel.”

The survey was conducted of 9,981 Japanese companies interested in overseas operations. Responses were received from 3,195 companies.  Asked about their overseas expansion policy over the next three years or so, including setting up bases for operations, 57% of companies said they plan to “expand,” down by about 4 percentage points. This is the lowest figure in the past five years. Some 68% of companies said they plan to expand exports, down by about 2 points.

Some 59% of companies cited “policies of the U.S. administration” as a risk in having operations in the United States. This exceeds by a large margin the second most frequently given response of “no reason in particular” (22%).