Chance and challenge: Japan Inc. worried but hopeful about Trump

TOKYO: President Donald Trump’s salvos on trade and currency are rattling Japan Inc., but many here hope Prime Minister Shinzo Abe can sell him a “win-win” package of job creation and investment when they meet this week, averting a return of the Japan-bashing of the 1980s.
Abe moved early to build a personal rapport with Trump, meeting him in New York shortly after he was elected. With Japan’s largest export market at stake, its businesses need him to keep at it.
Japan’s status as the cornerstone US ally in the Pacific was reassuringly reaffirmed in a recent visit by US Defense Secretary Jim Mattis. Tokyo has reiterated its commitment to spending more on its own security and buying more military aircraft and other equipment from the US.
That will not directly affect trade figures, however, which are measured by the private sector.
Japan logged the second largest trade surplus with the US last year, at $68.9 billion dollars. That is way below China’s, at $347 billion, and on a par with the surpluses run by Germany and Mexico.
Still, there is plenty to worry about.
After taking office, Trump pulled the plug on US involvement in the Trans-Pacific Partnership, then a dozen, now 11-member trade pact the Obama administration promoted as a way to expand US exports and influence in the Pacific Rim and counter China’s growing economic sway.
Trump has criticized Toyota Motor Corp. for planning to build an assembly plant in Mexico, complained Japanese do not buy enough US-made cars, and accused Japan of engineering its monetary policies to help Japanese exporters.
Abe will not be traveling with any business leaders during his trip, which begins Thursday. But following the lead of Softbank tycoon Masayoshi Son, who met with Trump in November and promised 50,000 jobs and $50 billion in new investments, officials say they are hammering out a job-creation package of infrastructure investments to propose during Abe’s visit.
According to various versions of the proposal reported in Japanese newspapers, key areas of investment may include building high-speed trains, joint development of robotics, artificial intelligence and space technologies and ramping up imports of US natural gas in Japan and elsewhere in Asia by building more liquefied natural gas facilities on this side of the Pacific.
Resource-poor Japan imports almost all its energy needs since most of its nuclear reactors were shut down after the 2011 Fukushima nuclear disaster. Price and currency trends can blunt any impact on the trade balance: In 2016, Japan’s imports of liquefied petroleum gas, or LPG, from the US jumped nearly 44 percent by volume, but the value of those imports fell slightly.
Japanese businesses have in general been supportive of so-called “Abenomics,” the prime minister’s attempts to keep Japan’s growth going. And they are applauding his effort to woo Trump.
Abe’s pro-active approach makes sense, says Willian Saito, an entrepreneur, educator and adviser to the Japanese government.
If the US wants Japanese bullet-train technology, or if Japan wants to diversify its energy portfolio, “it is a win-win,” Saito said. “I see all change as an opportunity. You can definitely make the best of it,” he said. “If we have an economic-centric plan here, this is in the interest of both leaders.”