Japan and Tariffs: Ideas Later: Updated Aug. 11, 2025

Japan warns of US tariffs after trade deal reached: monthly report

Article source: https://mainichi.jp/english/articles/20250729/p2g/00m/0na/041000c

Ideas

The Japanese economy doesn't grow very much and now with the tariff situation finished its going to grow even less, unless Japan can find some new economic drivers.

Even though Japan got a trade deal better than expected it's still going to have an effect on the Japanese economy but not as bad as expected.

The Japanese government is always saying the domestic economy is recovering moderately a as a way to not upset the financial markets.

Consumer might be picking up but Japanese consumers will never spend like US consumers do and maybe cultural differences make up a big part of it.

And it quite possible due to a labor shortage in Japan there might be more hiring now and companies are possibly increasing wages to keep workers and get new workers.

And its very good that the tariff deal removed the uncertainty in the marketplace as now companies have a better idea of what is going to happen and they can begin to plan accordingly.

Yes, even large Japanese companies, such a car markers have to worry about their profit margins and profitability as they are always concerned about their stockholders and what they think.

Back in the day, when Japanese car makers first entered the US market they relied on cheap cars just like other Japanese companies and they didn't worry about profits but only increasing their market share in the US. Those days are long gone of course.

Exports are never a complete linear upward thing but sometimes there are going to be ups and downs due to many variables relate to international trade.

Exports are an economic driver for the Japanese economy which is good but Japan has not been able to create any new economic drivers to help the Japanese economy grow.

Some might say foreign tourists coming to Japan and spending large amounts of money might be an economic driver but so far it hasn't helped that much.

It has to be remembered that only 30 percent of Japanese workers work for large Japanese companies and 70 percent of Japanese workers work for small and mid-size companies.

Wage increases for small and mid-size company workers were not the same as large company workers which could be a major challenge for the Japanese economy.

Yes, the tariff situation could have a major impact on the future growth of the Japanese economy, which has enough challenges without the tariff situation.

Again, the Japanese economy before the tariff situation was not in a good place and now its going to be in a even more challenging place.

If sales or profits are not what companies expect in the future, they might not hire as many workers and also at the same time might put off capital spending which is a big part of Japan's GDP.

And there is the constant challenge of private consumption or consumer spending which has never been that good in Japan except for maybe in the 70's and 80's when the Japanese economy was in its boom years.

The Japanese government and the Bank of Japan has to come up with some very creative ways to try and reduce the affects of the tariffs on the Japanese economy,

So to be fair the BOJ and the Japanese government haven't been able to steer its way out of the current stagnant state of the Japanese economy yet so there is not a lot of confidence that its up to the task related to the tariff situation.

Have a nice day!