"We Need To Prepare Umbrellas For A Rainy Day": Japan Gears Up For Trade War

Tyler Durden's picture

While so far Trump's trade focus was fallen mostly on Nafta countries, and to a lesser extent China, one country that is taking precautionary steps is the one which recently suffered a major loss when Trump signed an executive order to exit the TPP, effectively killing the trade deal: Japan. The TPP, which took years to negotiate among 12 countries, has often been described as being, at its core, a deal between the United States and Japan, the world's largest and third-largest economies respectively. Abe has touted TPP as an engine of economic reform and a counterweight to a rising China but said on Thursday it was possible Tokyo and Washington could hold bilateral free trade talks

According to Reuters, Japan is "preparing for all possible contingencies regarding trade talks with the United States", the top government spokesman said on Friday, after U.S. President Donald Trump ditched the Trans-Pacific Partnership free trade deal this week. PM Shinzo Abe is preparing for a visit Washington next month, and in a sequel of what Trump is expected to unveil with Theresa May today, an official in Trump's administration said Trump would seek quick progress toward a bilateral trade agreement with Japan in place of the broader Asia-Pacific deal.

"It is true that we are preparing to be able to respond to any possible situation," Chief Cabinet Secretary Yoshihide Suga told a news conference. He refrained from commenting on U.S. trade policy until it becomes clear.

Trying to keep the tone cordial and not to attract too much attention to Japan's mounting concerns it will be called out next, he added that "the alliance and the economy between Japan and the U.S. is very important, so we would like to have talks with various levels with the U.S. (about) how we can develop."

Meanwhile, Japanese officials said Abe's government should still try to convince Trump of the benefits of the TPP and multilateral free trade deals, while adding that they were not ruling out bilateral trade talks with the United States.

"We still stick to our best scenario (in pursuit of TPP), but that does not mean that we're inflexible," Masahiko Shibayama, an adviser to Abe, told Reuters.

"We need to prepare umbrellas for a rainy day. It's too early to decide what kind to umbrellas to bring, though."

Abe has touted TPP as an engine of economic reform and a counterweight to a rising China but said on Thursday it was possible Tokyo and Washington could hold bilateral free trade talks.

"Japan will continue to stress to the U.S. the importance of the TPP but it is not totally unfeasible for talks on EPA (Economic Partnership Agreement) and FTA (Free Trade Agreement)" with the United States, Abe told parliament after being asked about trade talks between the two nations.

Trump, who signed an executive order declaring he would seek to pull the US out of multilateral agreements, reiterated on Thursday he would strike numerous bilateral deals, as opposed to multilateral accords, such as the TPP. He has also taken aim at Toyota auto production in Mexico, warning it, too, would face tariffs if it pursued growth in Mexico instead of US for plants that build cars meant for the US.

And the punchline: Japanese officials were cautious about any Free Trade Agreement (FTA) between Japan and the United States, as it could encourage Trump to step up pressure on Tokyo while providing few benefits for Japan's economy, they said. Trump has threatened a "border tax" on imports into the United States and has said Japan has "unfair" barriers to foreign auto imports. Japanese officials pointed out that there are no tariffs on foreign car imports into Japan and maintain there are no discriminatory non-tariff barriers, either.

"We’ll calmly explain the fact that Japanese carmakers are investing in America and create a lot of jobs there," Shibayama said.

Of course, using "calmly" to preface any discussion with Trump is rather futile, and only invites the opposite response, especially on twitter.

Furthermore, Japan suggested that while it sought concessions from the US, it would preserve some trade protectsions of its own: Japan's Kyodo news agency said Abe also suggested Japan would advocate retaining some form of tariffs on rice and four other key agricultural products in any trade negotiations with the United States.

"We will thoroughly protect what we should protect...I want to carry out bilateral negotiations properly, based on the thinking that agriculture is the foundation of this country," it quoted him as saying.

Suga also said Japan would continue to monitor closely how the relationship between the United States and Mexico affects Japanese companies. On Thursday, the White House floated the idea of imposing a 20 percent tax on goods from Mexico to pay for a wall at the southern U.S. border, sending the peso plummeting and deepening the crisis between the two neighbors.

Japanese manufacturers, including major automakers, operate numerous factories in Mexico.

As a reminder, the last time the US and Japan were engaged in a vicious trade war, the final outcome were two infamous mushroom clouds.

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Truther's picture

It will rain with Trumps. Get ready.

Stuck on Zero's picture

Trump must understand that Japan must screw us in all trade transactions or they will lose face.

MalteseFalcon's picture

Besides umbrellas Japan, the EU and the third world are going to need white flags and KY.

HopefulCynical's picture

Japan was the nation which gave us the saying, "Business is war." They've fucked everyone in the ass with a chainsaw on trade for decades. FUCK. THEM. BACK. It's the ONLY thing they will understand or respect.

Déjà view's picture

What is FORD excuse for HONG KONG? Rare breed there...sales very weak in THAT open market TO ALL COMERS...LEVEL PLAYING FIELD!


oak's picture

korea is a close car market too.

thx111's picture

Ford should go back to Japanese market when the company becomes capable of producing more reliable compact cars.

Raffie's picture

I always thought of the Nikkei 225 market as DOW Jr.

Yellen and Abe been napping with each othere for a long time.

spanish inquisition's picture

A banker will borrow you an umbrella on a sunny day and ask for it back at the first hint of rain.

Fireman's picture

"A banker will lend you an umbrella...."   Remember class...."One borrows something from someone and one lends something to someone."


"Neither a borrower nor a lender be." Bill Shakespeare on Shylockian "economics"

BabaLooey's picture

Japan "gearing up" is akin to them sharpening a butter knife for a broadsword fight.

Vinividivinci's picture

they better be plutonium resistant.

losses mount's picture

Not likely to need a golfing umbrella since Obummer is gone.

lester1's picture

We're already in a trade war and have been getting our asses kicked for decades. Japan made $80 billion dollars off the USA last year in trade. Japan has a ton of taxes and tariffs on US made goods like cars. How is that fair ??.It's insane how stupid people in the USA think this trade deficit is normall.. ITS NOT !!!


Time for President Trump to level the trade playing field !!



FreeShitter's picture

Fuck trade wars, its time for trump to end the fucking fed.

Ghordius's picture

it would be very difficult to wage a trade war without the FED, note

it would be even more difficult to wage a conventional war of any serious size

for any kind of serious conflict, the FED is more "valuable" then the Pentagon

Wild Theories's picture

precisely why US needed a private CB in the first place

to fund what would otherwise have been unfundable

silverer's picture

That is true. The Fed exists to fund the government. But as you can see out the window, everything is way out of bounds. The banking system serves the government, but NOT the people. Here's some interesting reading about banking alternatives that WOULD work for the people. Step one, we need decentralized banks.


Look at the tabs at the top for "Public Banking Solution"

She knows her stuff. Nice lady.

Greenie's picture

The problem is that the men behind the curtain are more than happy to print money for both sides in a war.  Result...endless wars, and potentially devastating wars.

silverer's picture

The Federal reserve bank. Stealing from hard working US citizens and the rest of the world since 1913.

Troy Ounce's picture




J bones's picture

To me it seems Japan had no choice but to purchase bonds yesterday. Otherwise they would be pushed even further on the sidelines. Am I viewing this correctly?

Dilluminati's picture

I read this to say the punch bowl of yen carry trade might be coming to an end.

To Japan: We have some "immigrants" that we saved you from Germany and we'll send them!

new game's picture

japanese are very good negotiators when they have what you want. bearings that is. in this case trump has what they want. car sales, machine tools and the like. they make the best and our markets are second to none. what part of tarrif don't you understand. lol...

many sales coming as merica retools...

Ghordius's picture

"As a reminder, the last time the US and Japan were engaged in a vicious trade war, the final outcome were two infamous mushroom clouds."

yes and no. one thing is a trade war, another the escalation of a trade war into embargo

simplified, the US was able to put an oil embargo on Japan, and that was the Casus Belli for Japan

captain-nemo's picture

Now they all act like they are victims and that Trump is the bad guy, but all these countries now needs to wake up fast and start to realize that the days of free lunch are over.

Somehow the world have been brainwashed into believing that the US is  there for everyone to pick clean. They have to be taught that the American people are allowed to think what's best for themselves like all other countries do.


What Trump and his staff is doing is quite normal and what's expected from a good leader.

Ghordius's picture

"Somehow the world have been brainwashed into believing that the US is  there for everyone to pick clean"

not quite. the world was presented with a proposition, an offer: free trade

and the Global Champion of Free Trade, after the UK passed that mantle, it was the U.S. of A

now China put that mantle on it's shoulder. before, it was resisting free trade. for example during the so called Opium Wars

and if you don't know what the Opium Wars were... every schoolchild in China could give you long, long lessons on them

Ghenghero's picture

Rainy days?? Who is the largest US creditor? I am sure they can close the tap if Trump is unreasonable... treasuries anyone? 

Ghordius's picture

what the Japanese mean, here, is slightly different, imho

trade wars among giants like the US and China disrupt lots of supply lines of other countries, too

a bit like waves, they wash all over the world. oh, and the smaller a market is, and the more interconnected it is, the stronger such effects are

the US internal market is the one that is the least exposed to such effects, btw

gregga777's picture

The ENTIRE underlying reason that conporations overwhelmingly embrace Globalization is that it enables them to practice naked, predatory Capitalism in poor, weak countries which would violate all existing Developed Market laws, rules, regulations, ethical standards and best practices. The so-called "free trade deals" create monopolies for CONporations so that can fleece their customers, too.

Globalist conporations employ slave labor including children. Globalist conporations violate sustainable forestry practices by clear cutting vast swaths of forests. Globalist conporations expose workers, including young children, to extremely hazardous and dangerous working conditions including toxic substances. Globalist conporations overfish the territorial waters of desperately poor nations.

And when caught in the act the Globalist conporation pretends to be shocked. The Globalist conporation claims, "We know nothing!" It's all very deliberately based on cold calculations of pure profits versus loss of human life and environmental destruction.

A fundamental tenet of human nature is that the "haves" always seek to feed off of and dominate the "have nots". Historically predatory Capitalists paid starvation wages for workers doing dangerous and unhealthy jobs. A few examples:



That wasn't the government doing that though they did nothing to protect the workers lives or to improve their real wages. It was rich, predatory Capitalist factory owners that were behind such appalling working conditions. But, at their request, the government did use their military and police forces to violently suppress worker strikes.

Universally Globalist conporations want to return the world to naked, predatory Capitalism and to create worldwide monopolies. That is ENTIRELY what Globalization is all about.

angry_dad's picture
angry_dad (not verified) Jan 27, 2017 9:30 AM

The japs are their own worst enemy!

It's high time TRUMP stops enabling their colossal economic frauds, refusal to modernize their infrastructure, and fix their generations of investment mistakes.

silverer's picture

Actually, it was Paul Krugman that was their worst enemy. But the Japanese became their own worst enemy when they took his advice. lol

brushhog's picture

Can't get my head aorund so many free trade advocates warning of a "trade war" if we do anything to level the playing field with our trade partners. China manipulates it's currency for the single purpose of gaining an advantage in trade. They have border taxes on our goods, and restrictions on imports designed to benefit their productive base. So the whole concept of free trade is a myth. There is no free trade when one partner has open trade and the other one doesnt. We have a market that is highly manipulated by the Chinese government, so if we do nothing and talk about free trade then the board remains tilted in favor of the nations who's governments are interfering.

We're already in this situation, there is no free trade, there is a market that is slanted towards funneling the wealth and resources away from the US and into China.The chinese aren't worried about starting a "trade war" when they implement tariffs and restrictions on US imports. They simply pursue a policy that they feel benefits their country and their citizens. Meanwhile our government continues to pursue policies that dont benefit it's people, for the gain of some very wealthy, very influential multi-national corporations.

aliens is here's picture

Japs lost WW 2 and now they'll going to screw us on trade. Japs want trade war we'll give them trade war. It'll hurt us too but we'll break them if the people here have the will.

Parth's picture

Well we don't have da will. Get a clue, I am always buying Japanese or German cars. Nobody wants a Chevy, even Trump voters that I know.

oak's picture

naturally, killing the tpp, japan is the biggest loser. not so much to the other nations. it is great that mr.trump stopped it.

silverer's picture

Time to pull out the US base. Give something for Japan to do with all its money. Build its own military bases.

ali-ali-al-qomfri's picture

...like radiation proof umbrellas?

Know shit's picture

Rain, umbrellas?


There is a fuc... 100 meters high wave incoming..

Take care.

Elco the Constitutionalist's picture
Elco the Constitutionalist (not verified) Jan 27, 2017 4:57 PM

Trade war sounds so scary, when in actuality a trade war for the USA means that we return to prosperity and give up consumerism.

Japan has always needed trade, because it is an island.