All national dailies reported extensively on what they called the “escalated trade war” between the U.S. and China, underscoring that the prolonged trade friction between the world’s two largest economies may potentially hamper global economic growth since both sides appear determined not to make concessions any time soon. The papers projected that the Japanese economy will probably be hit hard by the latest U.S. punitive tariffs that will cover smartphones, domestic appliances, textiles, and other daily necessities because many Japanese manufacturers of these products operate extensive supply chain networks across China to assemble them for shipment to foreign markets, including the U.S. According to the dailies, corporate output and exports to China will probably drop, resulting in a contraction of Japan’s GDP. Stock prices may also plummet, as market players are bound to become bearish about the economy.
Noting that President Trump is likely to hold talks with his Chinese counterpart Xi in Osaka in late June on the sidelines of the G20, the articles predicted that the summit will be a crucial point in determining the course of the global economy as both sides will probably choose to enforce their fourth rounds of punitive tariffs if no agreement is reached. Yomiuri added that a breakdown of the Sino-U.S. trade talks could adversely impact the ongoing trade liberalization negotiations between Washington and Tokyo because the Trump administration may be tempted to step up the pressure on Tokyo to obtain quick deliverables in the absence of a deal with Beijing.
As for the GOJ reaction to the U.S.-China trade friction, Asahi took up remarks Finance Minister Aso made to the press on Tuesday. He reportedly projected that the friction will not be resolved easily because the two countries are apparently “competing for hegemony.” With regard to the tit-for-tat tariffs, the cabinet minister was quoted as saying: “Measures designed to restrict trade do not serve anyone’s interest.”