According to polling results from Reuters, a third of Japanese businesses are now reporting negative impacts from the ongoing trade spat between China and US President Donald Trump, up from just 3% in May of 2018.
Key highlights
Reuters poll results also showed that 53% of reporting firms are increasingly concerned about the continued fallout from still-escalating trade frictions, while a small percentage of those respondents have also said they are looking at moving their production from China to other countries. Of the companies who cited detectable impact from the trade war, an overwhelming majority said they were feeling it "to some extent", with only 2% calling the impact significant, however the fear that things are going to continue getting worse are on the rise.
Trade frictions are having a large impact on exports from China of raw materials that are used to build or finish products within the US, and despite pressure from America, all of the polled businesses who are considering moving production out of China are largely considering South-East Asia, with a minority of firms weighing bringing their production back home to domestic soil. None of the businesses polled expressed an interest in moving production to the US.
40% of responding businesses are also worried that fallout from the trade conflict could see disruptions in supply chains for the next three years, specifically in the potential for surging costs of raw materials and simple parts.
“If it does become a fully fledged trade war, then this could hit Japanese exports and supply chains, in turn hurting capital expenditure and dampening consumer spending and potentially damaging Japan’s entire economy,” said Masaki Kuwahara, senior economist at Nomura Securities, who reviewed the survey results. - Reuters
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