On NHK’s “Nichiyo Toron” Sunday talk show, four local economists and researchers exchanged views on the trade showdown between the United States and China and its impact on the Japanese and global economies. All the participants were alarmed by the Trump administration’s protectionism, dismissing speculation that President Trump is playing up his hard line toward China and other trading partners primarily for the sake of pleasing his bedrock supporters in the November congressional races. They projected that the U.S. leader will probably continue a tough approach beyond the midterm elections with the goal of reining in China’s emergence as an economic and technological giant. A former senior METI official in charge of North American trade forecast that in dealing with China, the U.S. administration may bring up the issue of computer chips and try to forestall Chinese access to U.S. expertise by regulating the flow of investment and engineers. Other panelists noted that since the global economy is bound to contract due to the head-on clash between the two economic giants, the Japanese economy would also probably be hit hard.
On the planned start of U.S.-Japan talks for a “free, fair, and reciprocal” trade deal, the discussants braced for Washington’s approach as evidence by the proposed tariffs on autos, worrying that Japanese car makers would sustain heavy financial losses if the import levies were enforced as suggested. Some of the panelists argued that the issue of a currency provision must not be addressed in bilateral negotiations, while others recommended that Tokyo should purchase more American defense equipment and agricultural products to mitigate U.S. trade pressure. A Cannon Global Institute analyst called for Japanese businesses to collaborate with the Japanese government to expand investment and renew infrastructure in America to help rebuild the Rust Belt with the goal of cementing the U.S.-Japan partnership. The ex-METI official expressed strong opposition to “managed trade,” underscoring that the Abe administration should never agree to a possible U.S. demand for reducing U.S.-bound exports, be they vehicles or metals. He added that Japan must keep insisting on the importance of cross-border trade based on WTO rules in order to counter what he called the Trump administration’s attempt to turn global trade into a “power game.”