Half of Japanese firms see another Trump presidency as risk, Reuters poll shows

By Thomson Reuters Feb 21, 2024 | 5:08 PM

By Anton Bridge

TOKYO (Reuters) – Roughly half of Japanese firms see another Donald Trump presidency as a potential risk to business, with the prospect of increased protectionism the leading cause for concern, a Reuters survey showed on Thursday.

Corporate Japan remains downbeat on China, with more than half at least somewhat pessimistic on the Chinese market over the next five years, the survey showed.

Former President Trump has promised to block the proposed takeover of United States Steel by Nippon Steel should he be re-elected in November, highlighting the risk of growing protectionism in the world’s top economy, a key market for Japan.

Some recent polls have shown Trump as the frontrunner for the election.

Some 49% of firms in the monthly Reuters corporate survey named a Trump presidency as a risk, with only 3% saying it was an opportunity. A total of 54% of firms cited increasing protectionism worldwide as among their greatest worries for a second Trump presidency.

While the vast majority said they had no plans to review business strategies on the prospect of a Trump re-election, a few did say they would consider some changes.

“We will bolster our production in the United States,” said one manager at a chemicals company. A manager at a rubber manufacturer said the company was planning on increased capital expenditure in the United States.

A third manager, at a paper and pulp firm, said it was considering altering supply chains.

The survey of 499 firms was conducted for Reuters by Nikkei Research from Feb. 6 – Feb. 16, with companies responding on condition of anonymity to allow them to speak more freely. A total of 239 companies responded.

The poll also showed a majority of firms, or 62%, remain pessimistic on business in China, with a prolonged economic slowdown in the world’s second-largest economy their main concern.

That compared to the last time companies were asked about the China outlook in the survey in October, when more than half of firms said they expected the slowdown to persist into 2025.

Around one in three companies said they were shifting production and sales to other markets, down from nearly two in three in October.

“With the lack of visibility on a recovery, we’re anticipating a fall in orders for environmental goods and automobile parts,” said a manager at a ceramics firm.

More than half of manufacturers said their Chinese revenues have fallen as a result of the slowdown.

While 17% of firms said they were considering withdrawing or shrinking China operations, for most China remains too important to ignore.

“If we were to withdraw from China we wouldn’t survive in global markets,” said the manager of a machinery firm.

“We will reduce operations but withdrawal is not an option.” (For a table of poll data, click here)

(Reporting by Anton Bridge; Editing by David Dolan and Sharon Singleton)