Japan Inc. believes Trump presidency would hurt ties, tarnish U.S. as investment target: poll

Most Japanese firms think a Donald Trump presidency would harm the Japan-U.S. security alliance and make the United States a less attractive place to invest, a Reuters poll showed, in a further sign of international angst about his candidacy.

The Republican front-runner, known for his unpredictable style and fiery rhetoric, would also cause bilateral trade to shrink if he became president, a majority of respondents said.

Portraying Japan as a free-rider on security, Trump has suggested that the U.S. ally might need nuclear weapons to ease the U.S. financial commitment to its defense — anathema to the only country ever attacked by atomic bombs.

Trump has also said he might withdraw U.S. service members from Japan unless it pays more to feed and house the 50,000 it hosts, and he has accused Japan of stealing U.S. jobs.

His comments have only fueled simmering worries amongst some Japanese in recent years about whether Washington would defend Tokyo in a crisis under their alliance — the lynchpin of Japan’s security policy for decades.

The Reuters Corporate Survey, conducted April 1-15, found 78 percent of firms thought Japan’s security environment would deteriorate under Trump. The remainder said it would not change much. Not one firm thought it would improve.

The monthly poll surveyed 510 big and midsize firms. Around 230 answered questions on the U.S. presidential race.

In written comments, companies voiced concerns that uncertainty would grow over U.S. diplomacy and that protectionism would rise, with some saying a President Trump would embolden China as it struggles to exert its influence in the South China Sea and other parts of Asia.

“It is very easy to imagine China taking advantage of the power vacuum to step up military operations in the region,” wrote a manager at an electronics maker.

In particular, Tokyo and Beijing have long been at odds over tiny islands claimed by both in the East China Sea.

“We worry that geopolitical risk would heighten a lot and Sino-Japanese relations would be extremely strained, which could result in a very negative impact on the Japanese economy,” the manager added.

A Trump spokeswoman did not respond to requests for comment.

While the possibility of a President Trump has triggered alarm among some foreign diplomats, economists and business executives, he has moved closer to the Republican nomination after winning a commanding victory in New York state’s presidential nominating contests on Tuesday.

Some respondents to the survey said, however, that they see Trump’s comments as mere posturing and did not expect any real change in policy even if he won the Nov. 8 election. Managers answered on condition of anonymity in the survey, which was conducted for Reuters by Nikkei Research.

Around 55 percent of firms said that Trump would be bad for business in the United States, that Japanese corporate appetite for investing in the U.S. would wane, and that trade between the two countries would decline.

The amount of Japan-U.S. trade has grown by about a quarter in the past two decades to be worth around $215 billion, accounting for 15 percent of Japan’s overall trade. The United States is Japan’s No. 2 trading partner after China, while Japan is the United States’ fourth-largest trading partner.

In contrast to Trump, more than 80 percent of Japanese firms believe Democratic Party front-runner Hillary Clinton would keep a steady hand on economic relations and maintain the status quo on security. The White House has described Trump’s suggestions on Japan adopting nuclear arms as destabilizing.

Representatives for Clinton did not respond to requests for comment.

“She would adopt realistic policies. It would lack freshness and stage no surprise, which would be a relief to us,” wrote a manager at a construction firm.