TOKYO— More than two-thirds of Japanese firms believe the government should compile an extra budget later this year to mitigate the impact of US President Donald Trump’s new tariffs and rising prices, a Reuters survey showed on Thursday.
Trump informed Japanese Prime Minister Shigeru Ishiba last week of a 25 percent tariff on Japanese imports from August 1, though he hinted there was room for negotiations.
On car imports, the Trump administration has already imposed a new 25 percent tariff, making the total auto tariff rate 27.5 percent, a matter of particular concern for Japan, which counts the auto industry as the main pillar of its economy.
About 71 percent of respondents to Reuters’ survey said a supplementary budget should be drafted following this weekend’s national elections, where Ishiba will be fighting to keep his coalition’s upper house majority.
“Given Trump tariffs, full-blown economic measures are necessary,” a manager at a wholesaler wrote in the survey.
Japan has compiled a supplementary budget every year in recent years to fight the COVID-19 pandemic, to help the public cope with rising prices and to fund other government initiatives, with last year’s totalling about 14 trillion yen ($94.05 billion).
But this year, any extra government expenses are bound to come under heightened scrutiny, with long-term bond yields rising sharply on concerns about the nation’s fiscal health.
Corporate Japan favours stimulus measures such as deregulation, sales tax reductions, and subsidies for companies and households, the survey showed.
Ishiba has proposed cash handouts to help households cope with rising prices, while opposition parties are campaigning to cut or abolish the sales tax.
Regarding financing for stimulus, only 14 percent supported issuing government bonds, while 38 percent advocated for cuts elsewhere and 36 percent proposed using surplus tax revenue.
The survey was conducted by Nikkei Research for Reuters between July 2 and July 11. Nikkei Research reached out to 497 companies and 241 responded on condition of anonymity.
Costs and benefits of listing
Opinions were sought on the merits of a stock market listing. While 54 percent of respondents said the upside of being publicly traded outweighed the downside, 25 percent found the pros and cons balanced, and 20 percent said the disadvantages exceeded the benefits.
The Tokyo Stock Exchange in 2023 urged listed firms to focus on their share prices and engage actively with investors, prompting a wave of share buybacks that bolstered the market but raised administrative costs.
