Trump Tariffs
(In response to a question regarding the first round of tariff negotiation attended by Japan's Economic Revitalization Minister Ryosei Akazawa) First of all, I welcome the fact the negotiations have started. It is also great that the two sides have shown alignment in working to reach a trade deal that can be announced by their heads of state as soon as possible. However, as Prime Minister Ishiba himself has noted, Japan must not rush into a hasty agreement lacking essential content, and it will be necessary to tackle the issues with the prospect of drawn-out negotiations in mind.
I want to see the Japanese government pursue these negotiations with determination while exploring countermeasures for both the mid- to long-term and short term.
As a resource-poor island nation, Japan has no choice but to develop itself as a force in the fields of science and technology, as well as trade and investment. Accordingly, over the medium and longer term, Japan should demonstrate its leadership by working together with likeminded nations and members of the Global South to sustain and strengthen the free and open international order based on the rule of law.
In the near term, it will be necessary to provide steady financing and other forms of assistance to the small and medium-sized enterprises impacted by Trump's tariffs.
(In response to a question regarding the stance shown by the US in linking tariff negotiations with demands that Japan bear more of the cost of stationing US troops on its soil) Tariffs and the security treaty are fundamentally separate issues, and Japan should emphatically convey that point. From 1978 through 2024, Japan appropriated a cumulative 8.5 trillion yen in budget expenditures to foot the cost of stationing US troops on its soil. It needs to make that fact clear and discuss tariffs with the US as a separate, singular issue.
(In response to a question regarding US demands that Japan remove nontariff barriers on automobiles and open up its market for agricultural goods) I have nothing specific to say regarding pending negotiations on issues in those fields.
Ultimately, though, it's the car industry that stands to be hardest hit. This industry is broad in its scope, and the US has already levied a 25% tariff on automobiles, separately from its reciprocal tariffs. Even should Japan continue to emphasize the contributions Japanese companies have made as the top source of foreign direct investment in the US economy and the second-largest source of jobs created in the US by foreign firms, I don't know whether that will be enough to persuade the US to drop its tariffs on automobiles.
Looking ahead, SMEs in the downstream supply chain may be impacted. In the near term, the government is likely to hammer out measures to provide them with financing and other forms of assistance.
(In response to a question regarding the impact Trump's tariffs could have on negotiations for wage hikes and efforts to boost the minimum wage) My impression is that the momentum for wage increases is off to a smooth start with the spring labor-management wage negotiations this year. However, as the tallies compiled by the Japanese Trade Union Confederation (RENGO) indicate its survey had slightly fewer respondent labor unions compared to this time last year, I believe they are trying to ascertain what will happen with Trump's tariffs. In any event, I hope the tariffs don't dampen the strong momentum shown by wage increases toward taking lasting root.
Regarding the minimum wage, under the principle of market competition, it is a law of nature that poorly productive companies will be weeded out. However, given the legally mandated nature of the minimum wage, I have to question the logic of increasing it to a level so high that many SMEs will be unable to implement it and end up forced out of the marketplace. We need to have a more thoughtful discussion on these issues, bearing the impact of the Trump tariffs in mind.
(In response to a question regarding recent moves in the exchange rate spurred by the tariff negotiations between Japan and the US) I want to see every effort made to avoid any sudden and sharp volatility, given the desire to see the exchange rate follow a steady course, not only now but in general.
(In response to a question regarding the outlook for the currently volatile financial and capital markets in the US, which have experienced a triple dip in the US dollar, government bonds, and stock prices that in turn has led to a surge in the price of gold) The current turmoil in the US financial and capital markets is likely a manifestation of the fears surrounding Trump's tariff policies and other factors behind the uncertain economic outlook. Future trends in the market are also tough to predict, given they will largely reflect the policy moves taken by President Trump.
President Trump's policies have three stated objectives: (1) reducing the trade deficit; (2) reviving the nation's manufacturing base; and (3) increasing tax revenue. However, to begin with, trade is based on the principle of competitive advantage, and the current trade balance and industrial structure have been shaped by that foundation. Given that relocating industrial structure requires the acquisition of new technologies and personnel, luring manufacturing industries back to US soil will not be that easy. On the other hand, based on the principle of competitive advantage, the US has built competitive industries in the digital and financial spheres, and it also appears to be profiting from them.
President Trump's future moves are difficult to predict, so they will likely continue to influence the financial and gold markets.
(In response to a question regarding the sudden participation by President Trump in the first round of trade negotiations and his bringing up the subject of costs associated with stationing US troops in Japan despite the absence of Japanese defense officials from the gathering) Considering that the purpose of this first round was to work out details for the negotiation process to get underway, it was probably inevitable that the Japanese side would be unprepared to immediately address some of the issues on the agenda presented by the US side.
I want Japan to avoid rushing into an agreement and to make proposals that effectively separate the mid- to long-term and short-term issues from each other. I have heard the Japanese government has launched a comprehensive cross-sectoral task force comprising ministries and agencies capable of effectively dealing with the various challenges related to the recent US tariff measures. I look forward to seeing it take appropriate action.
Expo 2025 Osaka, Kansai, Japan
(In response to a question regarding the status of Expo 2025 after its first week in operation and the challenges in creating an atmosphere of excitement) Although it faced numerous hurdles along the way, it is highly significant that this event has succeeded in clearing them one by one and finally launched.
While some issues have been marked by a sense of confusion or lack of experience, I look forward to seeing improvements made on a daily basis. Overall, I am told the response from Expo visitors has been extremely favorable, with approx. 80% of those participating in a questionnaire survey indicating a desire to visit the event again. I imagine many visitors will have an even more impressive experience of the Expo once they see the Grand Ring. Expo 2025 has many fascinating pavilions, more than can be experienced in a single day, and we plan to continue appealing to the public and underscoring the charms of this event.
Although in total, only 32% of respondents to an Asahi Shimbun public opinion survey stated they wanted to visit Expo 2025, measured by age group and region, that sentiment was respectively shared by 45% of respondents in the 18–29 age bracket and 51% living in the Kinki district. In that sense, I feel the Expo is off to a good start. All the same, to even out visitor traffic and avoid an overconcentration of visitors through the latter stages of the Expo, we will endeavor to generate an even stronger mood of excitement.
Choice of Separate Surnames for Married Couples
(In response to a question related to the creation of a system allowing separate surnames for married couples and asking whether Keidanren intends to update its list of problems attributable to using one's former surname as their common surname, noting the point made that most of the issues attributed to the use of one's former surname have already been resolved) Although we haven't dropped the idea of updating that list (in the future, if necessary), the current reality is that some problems persist. For instance, although a recent government survey found that 70% of all banks already allow depositors to open accounts using their former surname, approx. 30% of banks and most credit unions and credit associations still do not allow former surnames to be used for account opening, indicating certain problems have not yet been resolved.
Moreover, in the first place, a system allowing separate surnames for married couples is a matter pertaining to the identity of those who opt to use a separate surname, not something that should be debated solely from the perspective of expediency. This is a matter that should be settled through public discourse, and I would like to see our lawmakers move forward with their discussions on it at an early date.
(In response to a question regarding different surnames for parents and children in households where the spouses have chosen separate surnames) Opinions vary on the subject of surnames for children. Keidanren's stance has been aligned with the position articulated in the 1996 Legislative Council draft report (namely, that children's surnames be chosen at the time of marriage, and that all siblings share the same surname). This, too, is a question I want our lawmakers to resolve through careful debate.