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Trump tariffs? For Japan Inc, Canada’s retaliation is a worry too
STORY: Donald Trump’s promise of sweeping tariffs has Japanese exporters worried. But that may not be their only or even biggest worry. Hiroyuki Ogawa is the chief executive of Komatsu – the world’s number two maker of construction machinery, after America’s Caterpillar. His firm makes a lot of its gear in the U.S., and actually exports more from the country than it imports. That makes other countries’ response to Trump’s trade policies a huge issue: “Therefore, my biggest concern is the retaliatory tariffs, if another country raises tariffs in response to the Trump tariffs. We conduct business based on free trade, so in that sense, a tariff war could land a one-two punch on us, and that’s something I’m worried about.”Komatsu earns more than a quarter of its sales in North America. And Ogawa cites the danger of retaliatory tariffs by Canada as his biggest worry. But when firms like Komatsu look ahead to a Trump administration, they also see positives to set against the tariffs: “Obviously, energy policies will change from the Biden administration to the Trump administration, so I think shale gas and shale oil will make a big comeback. For example the construction of gas pipelines that were suspended under the Biden administration will probably be resumed, so I think to some extent that could be seen as a positive for us.”With a month to go before Trump takes office, exporters around the world will be making similar calculations. Like Ogawa, many will be hoping they don’t face a double hit in the U.S.: tariffs on the way in, and tariffs on the way out.
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