The escalating U.S.-China trade tensions are at the root of Japan’s concerns about the global economy, according to a recent report compiled by the Cabinet Office.
But the office maintained its headline assessment of Japan in the August edition of its monthly economic report, saying the world’s third-largest economy is “recovering at a moderate pace” with “weakness continuing mainly in exports.”
In the short term, the monthly report warned that “attention should be given to the effects of the intensified tension over trade issues on the world economy.”
On Aug. 23, China announced additional tariffs of 5 percent or 10 percent on a total of 5,078 U.S. goods worth around $75 billion. Some of the tariffs are due to take effect Sunday and the rest on Dec. 15.
Shortly after Beijing’s announcement, U.S. President Donald Trump said the planned tariffs to be imposed on around $300 billion worth of Chinese imports from Sunday and Dec. 15 would be raised by 5 points to 15 percent.
Trump also said the United States would raise tariffs on about $250 billion worth of Chinese products to 30 percent from 25 percent on Oct. 1.
Japan’s previous economic report had said “further attention should be given to the effects of situations over trade issues on the world economy.”
“Additional tariffs between the United States and China could increase uncertainty and have a negative impact on (domestic) business sentiment,” said a government official who briefed reporters.
The Cabinet Office also left its assessment on exports unchanged in the latest report, saying they are “in a weak tone.”
The report upgraded its evaluation on public investment for the first time in three months, however, citing public works projects, including those for disaster recovery.
The economy grew an annualized real 1.8 percent in the April-June quarter, supported by solid consumer spending and capital expenditures, although the pace slowed from the previous quarter from sluggish exports, government data showed earlier this month.