Trump’s Potential Return To Presidency Seen As Business Risk By Half Of Japanese Companies, Shows Poll

The prospect of former President Donald Trump returning to the White House is reportedly causing unease among Japanese businesses.

What Happened: A Reuters poll, conducted from Feb. 6 to Feb. 16, 2024, reveals that nearly half of Japanese companies perceive a potential Trump presidency as a business risk. These firms are primarily concerned about the protectionist policies that marked Trump’s previous term from 2017 to 2021.

As per the survey, 49% of the companies view a potential Trump administration as a risk. The biggest concerns for these companies, if Trump were to be re-elected, would be U.S.-China trade friction, stronger anti-China trade sanctions, impact on U.S. domestic strategy, and increasing global protectionism.

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Interestingly, 60% of the companies have no plans to consider making business plans based on a potential Trump presidency, while 32% remain undecided.

Why It Matters: The apprehension among Japanese firms can be traced back to Trump’s threat to block the proposed acquisition of United States Steel Corporation X by Nippon Steel Corporation NPSCY.

The potential failure of this $15 billion deal could prompt Japanese companies to adopt a more cautious approach to future acquisitions in strategic sectors.

China stands as Japan’s primary trading partner, followed closely by the United States as the second largest. According to 2021 World Bank data, trade with China amounted to 163.9 billion, while transactions with the U.S. reached $136 billion.

Trump’s stance on the U.S. Steel deal has added uncertainty to the business environment. This could potentially impact the interests of shareholders of United States Steel Corp.

Furthermore, Japan has been trying to communicate its concerns to Trump over any potential deals with China that could destabilize Asia.

Japan is particularly worried about Trump negotiating a trade or security agreement with China if he is re-elected, which could undermine the collective actions taken by the Group of Seven (G7) nations to combat China’s influence.

Photo via Shutterstock

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