Automobiles and car parts comprise 60 percent of the roughly ¥150 billion ($1.38 billion) a year in Japanese trade affected by the protracted trade war between the United States and China, a source familiar with the matter has said.
The ¥150 billion involving Japan firms is part of some ¥70 trillion total trade between Washington and Beijing in 2018, the source said Wednesday, citing a Japanese government survey.
To mitigate the impact of the prolonged dispute between the world’s two largest economies, some Japanese companies, across industries, have moved their production bases to Southeast Asian countries or Mexico, or have stepped up domestic production and sales, the source said.
In the survey, many Japanese manufacturers of car parts that export their products from China to the United States have felt the biggest impact of the tit-for-tat tariff spat between the two countries.
The makers said they are finding it difficult to relocate manufacturing bases, citing the massive investments of money and time needed.
Japanese automakers, however, said the impact, so far, has been limited, because most of them have established local production bases and sales networks in the United States, the source said.
According to U.S. Commerce Department data, America’s imports of automobiles and car parts from China totaled some ¥2.4 trillion in 2018, or two-fifths of such imports from Japan.
The source quoted the government survey as saying that Japanese industrial machinery makers have also been hit hard by the trade friction, with exports to the two countries totaling ¥39 billion.
The United States has imposed levies on a total of $250 billion worth of Chinese imports, while Beijing has retaliated by taxing $110 billion worth of U.S. goods.
The United States has warned it may impose an additional round of tariffs on Chinese imports as part of President Donald Trump’s push to address the massive trade deficit with Beijing.
IN FIVE EASY PIECES WITH TAKE 5