If Donald Trump’s enthusiasts and detractors about the United States president of the United States may be in something in the 80’s.
This is the decade of its heyday, when New York’s larger worldview of commerce, economics, geopolitics and culture seemed to be consolidating. At the time, Japan Trump saw as the bogey man eating lunch and plundering America’s future. Today, Xi Jinping’s China is the object of Trump’s ire.
But what if Japan also finds itself high up on Trump’s enemies list in ways for which Tokyo hasn’t bargained?
There are few tactics in which Prime Minister Shigeru Ishiba’s country can cause the Trump 2. 0 team. One of them is not to show enough compliance by providing Washington with wonderful publicity concessions. Another is that Ishiba’s Liberal Democratic Party temporarily failed to act enough to bring army spending to more than 3% of gross domestic product.
The real spark could be a weak yen exchange rate at odds with Trump’s 1980s view of global dynamics.
While Trump prepares to return to the White House on January 20, facing China is his most sensitive economic project. From enforcing the price lists of 60% in continental goods to limb their technological sector and the backdrop of a weaker dollar instead of Yuan, the Trump team has its paintings cut to do so.
But the fall of Japanese Yen will surely open the way on the Trump radar screen. It is true that Trump Anti-China advisors, such as Peter Navarro, and hard-line businessmen, such as Robert Lighthizer and Jamieson Greer, give him the earth’s configuration. A key variable is how a weak yen can make Chinese leader XI think that Beijing will also reduce the level of Yuan.
In the past, Washington largely gave Tokyo a pass on its beggar-thy-neighbor policies. The idea being that if the end justifies the means and a weak yen revives Asia’s second-biggest economy, then America wins, too. Even Trump 1.0 looked the other way as Japan, then-led by Trump cheerleader Shinzo Abe, pursued a soft-yen strategy.
Things may be very different this time. Trump has rejected Ishiba’s requests for a meeting since his victory in the November 5 election. Although Japanese officials say Trump will meet with Ishiba in February, Trump made a bilateral break with myriad other global leaders, but not those from Japan. To add insult to injury, Trump World even invited Xi to Trump’s inauguration.
Being on Washington’s B-list is the last place Tokyo wants to be as Trump launches a trade war like Asia has never seen before. Particularly at a moment of great economic uncertainty for Japan.
Trump perfected his “man food” four decades ago. This occurred around the time Michael Keaton starred in 1986’s Gung Ho, A Tale of Japan Inc. , exploiting Detroit auto workers. It was at the height of Japan’s “Bubble Economy” era when Washington struck the “Plaza Deal” monetary deal at a New York hotel that Trump owned for a time.
This is a moment that Michael Crichton immortalized in his best-seller Rising Sun. And Trump’s businessman on Day Communicate is shown complaining that Japan had “systematically sucked America’s blood, aspirated to blood!They indulged in murders. They ended up winning the war.
Not so fast, because the deflation reached the spring of 1990. The spring of Champagne belonged to the unions obtained the greatest salary profits in 33 years. To sign that the virtuous salary cycle and admission profits that the Bank of Japan has worked to produce to produce 25 years of 0 interest rates.
Not so much. By the end of 2024, it was clear that average national wages were not keeping pace with the inflation rate. And since China exports deflation, the BoJ on December 19 that Japan was not in a position to normalize its interest rates. He left the official rates at 0. 25%.
This presented a paradox for global investors who had rushed to the average Nikkei 225 movements. If Bod thinks that Japan wishes Wheels of Economic Education after all this time, why do they deserve to bet on Japan Invray?
And even though China faces daunting challenges — not least of which a giant property crisis — Team Xi is making inroads into raising China’s game in semiconductors, electric vehicles, biotechnology, aviation, robotics, renewable energy, artificial intelligence and high-speed rail. China’s success in EVs has Honda Motor and Nissan Motor rushing to join forces. Few Japan watchers had that matchup on their bingo cards.
The BOJ’s reluctance to raise rates affects the yen. Last July, when the UEDA team raised the price charts to the highest level since 2008, a rising yen spooked Nikkei investors. It also surprised Tokyo’s political establishment. It is not difficult that Ishiba’s LDP and its coalition partners are pressuring the BOJ not to tighten the financial situation in the short term.
Trump’s return only raises the stakes. If the yen passes the 160 point on the dollar, from 157 now, and borders towards 170, how long can it be before Trump 2. 0 extends the tariff to one hundred percent, since it is threatened in automobiles. And South Korea is too.
Never brain that Trump’s tariffs, dreams of a weaker dollar, and “trickle-down” tax strategy are drawn from the 1980s. And that they seek to revive a global formula that no longer exists. The era of the 1980s, to which Trump turns out keen to return, may just draw Japan into the fray in a way that Tokyo does not anticipate coming.