Half of Japanese companies have seen their profits hurt by the U.S.-China trade war, although few firms are planning to shift operations or supply chains out of China yet, a Reuters poll found.
The Reuters Corporate Survey highlights the worsening collateral damage to global trade, beyond the immediate China-U.S. relationship, from the tariffs Washington and Beijing have slapped on each other’s goods.
The trade war between the world’s two biggest economies and a related global slowdown are hurting output and exports in Japan. Manufacturers’ confidence hit a six-and-half year low in September, the Reuters Tankan poll found.
Washington and Beijing imposed new tariffs on Sept. 1 in the latest escalation, though financial markets maintain hope for a breakthrough from talks that are to resume mid-month.
The Reuters survey showed 45% of Japanese firms have had their profits affected to some extent by the U.S.-China tariffs, while 6% have been greatly affected. Some 42% of firms said they have hardly been hit, and 7% see no impact at all.
That is worse than a similar Reuters poll last October that found just one-third of Japanese companies hit, with 58% of Japanese firms hardly affected by the trade war and 8% seeing no impact.
The latest survey, conducted Aug. 29-Sept. 9 for Reuters by Nikkei Research, canvassed 504 big and midsize companies, of which 250 responded on condition of anonymity to speak freely.
Corporate managers fretted about ripple effects ranging from exports and investment to supply chains and broader economic growth.
“I’m concerned that (the trade war) could trigger a global depression,” wrote a manager at an electric-machinery maker, responding to questions in the survey.
A retailer also cited fears of a recession, which the manager said could hurt sales to Chinese tourists – a strong source of growth for Japan’s longest postwar expansion – and badly affect the establishment of new businesses in China.
“I strongly hope that the U.S.-China confrontation is resolved quickly as it is a destabilising factor for global economy and weighing on business sentiment,” wrote a manager at a machinery maker.
Despite the damage so far, just 11% of Japanese firms said they are considering moving their business bases or supply chains out of China. About half said they had no specific plans to move out of China.
However, since more than one-third of companies said they have no related business in China, the proportion of companies active there that are considering moving is relatively higher.
Asian countries outside China were by far the most popular destination for companies relocating, followed by those bringing operations home to Japan, with North America and Europe lagging behind as destinations, the survey showed.
A trade war started by abe’s master trump, mind you. Asian countries outside of China are also feeling the effects so unless the host nation can provide incentives or subsidies to relocate facilities to their countries, capital investment in an unstable economy is pretty risky. Exchange rate volatility could also impact the bottom line drastically. What trump has started is a no-win for everyone.
China is Japan’s largest trading partner, which is to say, of course Japanese companies aren’t leaving China.
This whole trade war thing is to prevent China from replacing the US as world hegemon. That is why Huawei has been baned in the US. Chinese technology is surpassing US technology, and the US is running scared. The Huawei ban is just an attempt to protect US tech companies. You can still buy Huawei in Japan. We aren’t running scared. We have more confidence than the US.
They are intimidated by China. They say if you withdraw from China, you will never been able to come back to China to do businesses.
The problems with all these misled information as though China cannot succeed without USA will be the detriment to USA itself.china are not the same China forty years ago .It’s is more self reliance and have it own market which is bigger than Europe and USA .Their market growing the west are paranoid or their past of doing bad thing to other countries include Japan they fear no more control over other.china definitely will not bend to any unreasonable deal and it will not negotiate for giving up it principle and economic model which are working very well for China .The west especially USA very huge debt finance by the world try to destabilize China that not going to work .It will backfire. Any unreliable business partner that leave China for USA policies will not be welcome back .Even their import to China will face hurdle in future.china knew very well the bad intention of certain western country in particular USA. Therefore it is best to ignore .But unfortunately the Japan Inc become too dependent on USA and it economic have been lagging for the last twenty years after a trade deal that totally one-sided for USA benefit.
No mention of the effect on exports of removal of SK from the white list.
Is it to say there isn’t any effect or it is not mentioned because it was initiated by the grand master.
China is an overblown mess that got rich selling cheap junk to the U.S. Now that the U.S. doesn’t want her junk anymore, all the other countries leaders are upset with America because soon they will have to deal with all the junk China makes. Thank God America woke up!
all the other countries leaders are upset with America because soon they will have to deal with all the junk China makes. Thank God America woke up!
actually as this article states most non American companies arent leaving China, anybody with half a brain knows the Chinese domestic market will be the largest in the world within 30yrs and anybody who wants to be left out of a middle class market of almost 500million people is just plain stupid. Even most American companies will keep a presence in China, they know manufacturing in China for the Chinese market will be the most efficient compared to importing those same products.
Everyone knows that China is the future and the USA is the past. So of course, few firms will shift from China just to please the US (i.e., Trump).
The US is a NET exporter of energy*crude,LNG,…..China ? That is the mean reason China can’t win this trade dispute.
Ttrump is setting up America for failure
Everyone knows that China is the future and the USA is the past.
I would love to know where you get your information.
China is the future and the USA is the past.
China is a communist dictatorship on the path of protectionist neo-mercantilism with it’s “Made in China 2025” initiative. So, yeah, maybe you’re right.
China is a communist dictatorship on the path of protectionist neo-mercantilism with it’s “Made in China 2025” initiative. So, yeah, maybe you’re right.
You seem to be using sarcasm to imply the conclusion is not likely due to your precise, but I don’t see how your premise makes your conclusion not likely.