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

Friday, January 27, 2017
By Paul Martin

by Tyler Durden
Jan 27, 2017

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.”

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