World Trade and Japan: Updated May 28, 2025.

World trade chief says global free trade is in a 'crisis' while on visit to Japan

Article source: https://mainichi.jp/english/articles/20250513/p2g/00m/0bu/024000c

Ideas

Global trade was/is never perfect but its what has lifted millions if not billions of people out of poverty and into the middle class.

Yes, there are those who don't play by the rules or those who try to gain more market power over others but overall it's the only thing that really works all these years.

Some might say China doesn't play by the rules or some might say the US has too much market power or political power, but again it's a system in place what continues to work for the good of most countries.

Japan is not perfect but its a good example of open markets or as open as Japan wants them, as they too have high tariffs on some of their products, that protects some Japanese markets from too much competition.

Some would say, back in the 1980's that Japan wasn't playing by the rules as its companies and products were gaining too much market share with the lower prices they were charging in the US. 

But the real problem, back then, was the US became lazy and were too arrogant to upgrade their products as Japanese products were outselling many US products.

Global trade and supply chains can always be upgraded for new and better ways of doing things, but not at the expense of people or families around the world.

But the tariff situation as proposed by the US admin. is not the right way to do things as its going to completely disrupt supply chains and might put thousands of people out of needed jobs.

It seems like every ten years or less these days there are global crisis situations such as the 2001 NYC crisis, the 2008, global financial crisis, and many semi-crisis in the 2010's period and then of course the 2020 global pandemic that almost shut down the global economy.

The tariff situation potentially could be as big as the global pandemic as it could significantly challenge the global trade system and global supply chains.

The World Trade Organization like many international organizations is not perfect but it's the only real organization, at the moment, that promotes if not free trade but at least fair trade.

Japan of course has been at the forefront of global trade as its economy is healing invested in trade around the world. d

But to be fair Japan could do more to open some of its markets to more competition as it does limit some of the market and competition in those markets.

Japan, if possible, should not give in to the US admin and its high tariffs, but should try to negotiate and the US admin seems to always reduce the tariffs like it seems to be on many of the countries.

Again, the WTO is not perfect and the global trade system is not perfect, but it works for most countries even though some would say China doesn't play by the rules and some might say the US has too much market power or political power related to the WTO.

Listening to some US company CEO's saying they are trying to move their operations out of China but it could take another 12 months to move from China to Vietnam for example.

The US admin doesn't know or understand or maybe even care about international trade and absolute advantage or comparative advantage as some products can easily be made in other countries compared to the US for the good of US consumers.

The US economy is an import driven economy not an export driven economy like Japan is, as many of the world's products and especially products from China are made specifically for the US economy for US consumers.

If the tariffs become a reality, many of these products are going to cost much more, which means US consumers are going to have to pay more and some companies can't afford to absorb the tariffs and will need to pass on the increased costs to the US consumer.

It's unfortunate that the WTO doesn't have the legislative power to block any country, in the WTO from using high tariffs or anything else that might disrupt the global trading system.

Unfortunately again, the WTO doesn't really have much power kind of like the United Nations really doesn't have that much power to stop many conflicts.

All both organizations can do is promote sanctions which in reality don't have much power against another country.

Again, the multilateral system is not perfect but it's the only global trade system at the present time that seems to work. 

Do want to go back to the 1910's or 1920's with isolationist world where countries didn't trade and were left to their own devices. And then look what happened a few decades later in Europe which almost destroyed the world.

Have a nice day!