- FUTURE DESIGN 2040
- Trump Tariffs
- Anti-DEI Policies in the US
- Disclosure of Annual Securities Reports Prior to General Meetings of Shareholders
- Passing of Kazuo Sumi, Former Chairman of Hankyu Hanshin Holdings
FUTURE DESIGN 2040
I have decided to release in book form a more-detailed version of the FUTURE DESIGN 2040 vision I announced in December last year. It is slated to become available at book stores from May 10. I reiterate my desire that everyone will take this opportunity to peruse it.
I decided to release it as a book because I want the issues we have raised to reach as many people as possible. I want your assistance in broadly familiarizing the public with its content.
I am hopeful this release of my FUTURE DESIGN 2040 vision in book form will provide an impetus to deepen public discussion on Japan's future image from a medium- and long-range perspective.
Trump Tariffs
(In response to a question regarding the second round of Japan-US tariff negotiations attended by Japan's Economic Revitalization Minister Ryosei Akazawa) In noting that Japan and the US have not yet reached common ground, I believe Prime Minister Ishiba meant that the second round of negotiations had concluded without much progress toward bringing the US side's expectations and the Japanese side's positions on the issues closer to an accord.
To avert committing to a hastily prepared agreement, it is important that the Japanese side continue to engage in these negotiations with determination and strive to have all of the tariff measures revised, including the tariff rates on specific product imports.
However, now that the impact of the high tariff duties is already being felt, it is also imperative that our negotiators strive through vigorous negotiations to have these tariffs canceled as quickly as possible.
In that context, Prime Minister Ishiba and Minister Akazawa have both spoken of a "hurry slowly" approach, and I also want to see Japan adopt a prompt but measured approach by hanging tough, digging in, and negotiating with a sense of resolve.
(In response to a question regarding the potential schedule for future negotiations) Although it is possible a top-level meeting between Japan and the US could come during the upcoming G7 Summit in mid-June, I have no specifics on the actual schedule. As working-level negotiations are already under way, a date for such a meeting should eventually materialize.
The US side has also shown some inconsistency. To ensure against any blunders that could arise from rushing into an early agreement, I want the Japanese side to approach the negotiating table by strengthening its basic stance and avoid making compromises against a deadline.
Regarding that basic stance, it is essential that Japan, as a resource-poor island nation, develop itself as a leading power in the arenas of trade and investment. Moreover, it should demonstrate its leadership in the interest of sustaining and strengthening the free and open international order based on the rule of law. To that end, Japan urgently needs to expand its networks for economic partnership agreements and free trade agreements that leverage the framework of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
(In response to a question regarding US President Trump's announced plan to levy a 100% tariff on foreign-made movies) I feel the US has gotten carried away with the sheer scope of the tariffs it plans to use as bargaining chips at the negotiating table. After all, the US is a nation that has achieved strong growth particularly in the IT and digital industries under a framework of free trade based on the principle of comparative advantage. Despite this, it has hammered out policies based on excessive tariff duties to protect its manufacturing industry and other sectors that have faced difficulty in boosting their comparative advantage. That is something I find hard to comprehend.
Above all, the content is cultural, and policies that deprive its own people of opportunities to experience creative products from other nations are undesirable.
(In response to a question regarding the cautious earnings guidance in a string of corporate financial statements issued this term, with attention to the impact of Trump's tariffs and the outlook for a global economic slowdown) Many companies are more worried about the indirect rather than direct impact from the Trump tariffs, namely that uncertainty about the future will lead to weaker levels of consumption and investment. However, I suspect few companies have factored impacts of that nature into their reported earnings outlooks due to the difficulty involved in quantifying them. That said, some companies in the automotive and other sectors directly affected by product-specific tariffs will probably release earnings outlooks that do factor this impact in to a certain extent.
Anti-DEI Policies in the US
(In response to a question regarding the views of Keidanren—as an organization that has advocated for sustainable capitalism—on the pronounced shift toward anti-DEI policies in the US since President Trump assumed office) The main reason Keidanren has advocated for sustainable capitalism stems from its view that excessive market fundamentalism has exacerbated, entrenched, and perpetuated inequality, and that steps should be taken to remedy this status quo. Based on that perspective, we have endeavored to promote a fair and just society, foster the revival of a broad-based middle class, and create a virtuous cycle between economic growth and the distribution of wealth.
In that context, the motive for pursuing DEI initiatives has been to foster respect for the human rights of diverse stakeholders, including women and foreign nationals, promote the competition and inclusion of different values through public discourse, and on that basis generate innovative value-added that conventional capitalism rooted in mass production and mass consumption has not been able to deliver.
Although I realize gender is not necessarily the main factor underlying the anti-DEI policies espoused by President Trump, in Japan, a nation that by international standards has lagged significantly in closing the gender gap, it is crucial that we accelerate our pro-DEI initiatives.
Incidentally, almost 80% of corporate respondents to a recent opinion survey in the US indicated they have no intention of changing their DEI-oriented policies regardless of the anti-DEI initiatives hammered out by the Trump administration. That to me suggests the anti-DEI movement is unlikely to become a major trend.
Disclosure of Annual Securities Reports Prior to General Meetings of Shareholders
(In response to a question regarding the corporate disclosure of annual securities reports before general meetings of shareholders) Disclosing securities reports the day or several days prior to general meetings of their shareholders is in itself something some companies are able to do. However, with the volume of securities reports also containing nonfinancial information set to mushroom in the period ahead, not so many firms will be prepared to disclose it significantly in advance of their general shareholders' meetings in an adequately digestible format that investors can examine. Should listed companies act to disclose their securities reports in advance, as recently requested by Finance Minister Katsunobu Kato, it conceivably will be necessary to explore practical disclosure methods and reporting content that companies can accommodate. This could also include revisions to the Companies Act and Financial Instruments and Exchange Act. I imagine debate over this issue will heat up in the period ahead.
Passing of Kazuo Sumi, Former Chairman of Hankyu Hanshin Holdings
I met Mr. Sumi on several occasions outside the business context and gained the impression he was a man of great character and insight. In his later years, I am told he was extremely troubled by a harassment incident involving the Takarazuka Revue, a theater company he directed. I offer my heartfelt condolences to his family and friends.