A recent survey conducted by Nikkei Research on behalf of Reuters has unveiled that a significant majority of Japanese firms would prefer Kamala Harris over Donald Trump in the upcoming U.S. presidential election. This preference reflects a growing concern among Japanese businesses about the potential for increased protectionism and policy unpredictability under a second Trump administration.
The survey, which gathered responses from 243 out of 506 contacted companies between July 31 and August 9, highlights a shift in sentiment regarding U.S.-Japan business relations. Approximately 43% of Japanese companies indicated that they would favor Harris in light of their corporate strategies and future business plans. In stark contrast, only 8% supported Trump. The remaining 46% of respondents expressed that either candidate would be acceptable, while 3% did not support either choice.
The apprehension surrounding a possible Trump presidency stems from his previous administration’s approach to trade and economic policies. Trump’s tenure was marked by significant trade tensions, particularly with China, which affected global markets and forced many businesses to reconsider their strategies. Trump has previously proposed a universal 10% tariff on U.S. imports and a 50% tariff on Chinese goods, moves that could significantly disrupt international trade and economic stability.
One survey respondent, a manager at a ceramics manufacturer, expressed concerns about the potential for a renewed trade war and economic friction under Trump, which could necessitate substantial adjustments to their business strategies. Similarly, an official at a chemicals firm noted that Harris’s presidency might offer more predictable policies, thereby providing better visibility for long-term business planning.
In anticipation of these potential challenges, 34% of the surveyed firms indicated that they would need to review their foreign exchange strategies under a Trump administration. Additionally, 28% mentioned that realigning their supply chains would be necessary, and 21% stated they would consider reducing their operations in China.
Japan’s relationship with the Trump administration was notably strained by demands for increased military spending and escalating trade disputes. In contrast, Harris is perceived as more likely to maintain existing policies, which many Japanese firms see as beneficial for their operations.
The survey also sheds light on Japanese firms’ perspectives on their operations in China. About 13% of Japanese companies are contemplating reducing their presence in China, with reasons including pessimism about economic recovery, fierce price competition, and economic security concerns. Major companies like Honda Motor and Nippon Steel have already announced cutbacks in their Chinese operations. Conversely, 3% of firms are considering expanding their business in China, while 47% plan to maintain their current level of engagement.
Another area of concern highlighted in the survey is the recent intervention in Japan’s foreign exchange market. With the yen having fallen to a 38-year low of 161.96 to the dollar in early July, Japanese authorities were suspected of intervening to stabilize the currency. While 24% of respondents viewed these interventions as appropriate, 64% believed they were unavoidable given the circumstances.
Regarding future expectations for the yen, 32% of respondents predict it will trade between 145 and 150 yen to the dollar by the end of the year. Meanwhile, 25% anticipate a firmer yen at 140 to 145 yen, and 22% foresee it trading between 150 and 155 yen.
In conclusion, the survey underscores the significant impact of U.S. presidential policies on Japanese businesses. As the election approaches, the preference for Kamala Harris reflects a desire for stability and predictability in international trade relations. Japanese firms are keenly observing the evolving political landscape, aware that the outcomes could shape their strategic decisions and operational adjustments in the near future.
