It’s not “logical” for the U.S. to hit Japanese automakers with tariffs because Japan doesn’t impose any duties on its car imports, a strategist from CLSA said on Monday.
U.S. President Donald Trump hinted in a recent conversation with the Wall Street Journal that a trade fight with Japan could be his next tariffs battle. Many experts have said Japanese auto sector is the most at risk of being targeted because it has accounted for three-quarters of the trade imbalance between Japan and the U.S.
Investors have largely avoided Japanese stocks in part due to such threats on the trade front. The country’s auto sector has suffered: Shares in the country’s largest automaker, Toyota, have declined by 8.55 percent this year.
“My answer on that is it isn’t logical that (Japan is) hurt by Trump tariffs. It’s got a $69 billion trade surplus with the U.S., yes it does, but almost all of that is in two areas: autos and machinery,” Nicholas Smith, CLSA’s Japan strategist, told CNBC’s Akiko Fujita.
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