LAST_UPDATEMon, 16 Jul 2018 8pm

Japan's Exports Facing Risks From Trade Protectionism - RAM Ratings

KUALA LUMPUR -- Increasing protectionism among trading partners is among the downside risks affecting Japan’s exports in the second half of 2018.

RAM Rating Services Bhd (RAM Ratings) said strong exports can only temporarily cushion muted domestic demand which was mainly responsible to the 0.2 per cent deceleration in Japan’s first quarter 2018 gross domestic product.

“Despite continuous growth in exports in the first five months in 2018, downside risks to future exports have intensified given increasing protectionism by (Japan’s) trading partners,” said Head of Sovereign Ratings Esther Lai.

RAM Ratings opined that trade policy friction between the United States (US) and China could affect Japan as American tariffs on Chinese exports could hurt Japanese manufacturers with production bases in China. 

Additionally, due to its US$3.1 billion (US$1 = RM4.00) trade surplus with the US, the rating agency said Japan could be hit with new tariffs on exports of automobiles and vehicle parts to the US, beyond the existing tariffs on Japanese metal products.

“Escalating trade tensions from US protectionist policies will likely take a toll on business sentiment,” it added.