Is Japan : The Biggest loser of The US China Trade War

Japanese industry is suffering from the China vs US trade war and a degraded relationship with South Korea. Exports in July dropped by 1.6 per cent from a year earlier, while manufacturers’ business confidence also fell The ongoing China-US trade war, as well as Japan’s trade dispute with South Korea, threaten to further dim the outlook for the Japanese manufacturers . Trade tensions between Americans and Chinese and imbroglio with South Korea weigh on activity in Japan. Monday, September 2, Tokyo announced a 6.9% decline in industrial investment between April and June, the first in eight quarters. The same day was announced a decline in corporate profits of 12% over an identical period. Exports also suffer: they fell 1.6% in July, for the eighth consecutive month. Exports to China, Japan’s biggest trading partner, shrank 9.3 per cent year-on-year in July, down for the fifth month. Shipments to Asia, which account for more than half of Japan’s overall exports, declined 8.3 per cent in the year to July. Japan has also been embroiled in an intensifying trade row with South Korea, further threatening to hurt the outlook for its manufacturers. The gloomy data adds to the challenge for Japanese policymakers worried that a prolonged downturn in external demand will drive a sharp economic downturn at home. Exports in July fell 1.6 per cent from a year earlier, Ministry of Finance data showed on Monday, dragged down by car parts and semiconductor production equipment. That compared with a 2.2 per cent decrease expected by economists. These disappointing figures are attributed to the consequences of the stand-off between the United States and China, whose last rebound is Beijing's decision, announced on September 2, to seize the World Trade Organization (WTO) to protest the imposition, on September 1st , by the United States of customs duties at 15% on the equivalent of 110 billion dollars of Chinese imports. A new blow for Japanese groups selling in the United States products assembled in China and are forced to transfer their productions, mainly to Southeast Asia. Ricoh, which accounts for 28% of its sales in the United States, moved in July the production of photocopiers from the Middle Kingdom to Thailand. Nintendo did the same for its Switch consoles, and Kyocera transferred its production of printers to Vietnam. "The effect on our results should be limited," believes his CEO, Hideo Tanimoto. Separately, the Reuters Tankan survey showed Japanese manufacturers’ business confidence turned negative for the first time since April 2013 in August, underlining the darkening outlook for the export-reliant economy. Anxiety about a global slump rose to fever pitch recently after an inversion in the US Treasury yield curve implied a growing risk of a recession there, and data showed Germany’s economy was in contraction and China’s was worsening. Export-reliant economies such as Japan have been hit hard by the china US tariff war, which has already upended supply chains and undermined global trade, investment and corporate earnings.











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