The head of the influential Japan Association of Corporate Executives business lobby has urged the country and its companies to reduce their reliance on the US as their main trading partner and instead bolster supply chains with emerging and developing nations in the Global South.
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While economists who spoke to This Week in Asia broadly agreed that Japanese firms need to diversify their markets and partnerships, they cautioned that no other market can match the size and significance of the US – even amid the disruptions caused by President Donald Trump’s trade policies.
In an interview with the Yomiuri newspaper published on Tuesday, association chairman Takeshi Niinami said it had become clear that the tariffs announced by Washington meant it was “no longer the same as it used to be, and other nations should not rely on it”.
As countries worldwide scrambled to reinforce their economies and forge new trade alliances, Japan “must act immediately to enhance its competitiveness with a sense of urgency,” Niinami said.
He added that the response from world markets to the on-again, off-again tariffs has reflected their chaotic implementation, increasing uncertainty in the global economy.
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While some anticipate that the US may return to normality after Trump leaves office, Niinami noted that this was not guaranteed since Trump was elected by individuals who were angry because they believed that globalisation had cost them jobs, widened the gap between rich and poor, and exacerbated societal divisions.