Incoming U.S. President Donald Trump could impose tariffs on Japanese automobiles exported to the US, Stefan Angrick, a senior economist at Moody’s Analytics, stated in a current interview.
Angrick warned that this poses an enormous threat to the Japanese economic system.
Throughout his presidential marketing campaign, Trump vowed to impose blanket tariffs of 10% to twenty% on all imported items. Given the U.S. commerce deficit, he could focus consideration on Japanese auto exports.
Nonetheless, Angrick stated that such tariffs are unlikely to be realized as they may gas inflation in the US. Noting that Japan is the world’s largest investor in the US, he predicted that potential tariff hikes can be restricted if Japanese automakers promise to increase funding and shift manufacturing to the US.
In the meantime, the economist expressed concern a couple of resumption of the tit-for-tat tariff warfare between the US and China, as officers within the new U.S. administration are anticipated to incorporate hardliners towards China, including that it might inevitably hit the Japanese economic system.
If tariffs push up import costs and reignite inflation in the US, the Federal Reserve can be pressured to maintain rates of interest excessive, Angrick identified. In that case, the Financial institution of Japan must speed up the tempo of fee hikes, he famous.
