Apr 06, 2018 (Japan Times) - The escalating trade row between Washington and Beijing could impact Japanese companies that source production in China and export grain from U.S. subsidiaries. But many so far appear to be taking a wait-and-see approach on whether the world’s two largest economies will follow through on their proposed tariffs or find a solution that allows both to save face.
After the United States unveiled this week plans to impose a 25 percent tariff worth $50 billion on around 1,300 Chinese high-technology products ranging from electronics to health care, China fired back Wednesday with its own threat to levy 25 percent tariffs on 106 American products worth around $50 billion including soybeans, beef and cars, a move that roiled global markets.
Japan could also be hit if U.S.-bound shipments from China fall, said Kenji Yumoto, vice chairman of the Japan Research Institute.
“A tariff war between the U.S. and China could not only cut down on trade between the two nations but can affect countries like Japan, which for example exports parts to China to be assembled and sent to the U.S.,†Yumoto said.
“The question is how big of an impact this could create, and whether it will escalate. My take is that the two sides will reach a compromise in the last hour to avoid having to take action,†he said.
Washington’s plan came after an investigation into Beijing’s alleged theft of American intellectual property, and as U.S. President Donald Trump aims to reduce the nation’s $375.2 billion trade deficit in goods with China.
The plan, however, won’t be carried out immediately. Washington’s publication of its list on Tuesday kicked off a period of public comment and consultation expected to last around two months, while China’s own timing for execution depends on when the U.S. acts.
