Research shows that almost half of Japanese business leaders plan to increase their operations in the US in response to President Trump's request for greater foreign investment, despite concerns about his tariff policy.
Three in 10 executives (28.3%) are 144 major Japanese companies. Voted by Nikkei News Agency They said they would expand their presence in the US – while another 20.5% said they were considering a similar move.
A further 0.8% of respondents who currently do not have US businesses have an intention to enter the market, according to the survey.
None of the companies surveyed have indicated plans to scale back existing US operations.
Over half, 50.8% – said it was a major driver of increasing production capacity, 47.6% said interest in mergers and acquisitions was a motivating factor to expand the US footprint, while 34.9% said they were interested in startup investments.
The survey was conducted from February 28th to March 19th. This came before President Trump announced Wednesday that the US would collect tariffs of up to 25% on automobile imports.
Trump, who views tariffs as a revenue-raising tool to offset the promised tax cuts and revive long-term U.S. industrial bases, said the new import tax will come into effect on April 2.
In a Nikkei poll, about three-quarters of respondents said they were looking for opportunities for expansion and growth.
Industries that are particularly keen to expand in the US include electrical equipment, food and machinery and materials.
Some Japanese companies have already outlined specific expansion plans.
Nissin Foods Holdings is preparing to open its first Instant Nordal manufacturing facility in the US in nearly 50 years scheduled for August.
Additionally, Sumitomo Chemical plans to establish a new US plant dedicated to the production of cleaning solvents for semiconductor production.
The Japanese government, led by Prime Minister Isba, supports these investment trends and has pledged to significantly increase Japan's US investment to around $1 trillion.
As a result, around 41.4% of the executives surveyed said they would either increase their current investments or introduce new investments in the US, compared to just 16.9% in a previous survey in December.
Kyoko, president of Mitsubishi Yukiko, a major Japanese cuisine wholesaler, has expressed her hopes for government support, including “tax credits to support direct investment in the United States.”
However, enthusiasm for expansion could be alleviated by the significant worry about tariffs proposed by the Trump administration, particularly given the recent obligations imposed on steel and aluminum imports, and could significantly increase operational costs.
Policy uncertainty surrounding tariffs was a major concern for 73% of the executives surveyed.
“It's not clear how much they will continue to raise tariffs given the need to curb inflation ahead of midterm elections,” said Takeshi Niinami, chairman of Suntory Holdings.
According to the vote, almost half of respondents working in manufacturing are cautious and prefer to maintain their current business or adopt a waiting approach to tariffs.
Additional concerns cited include a surge in labor costs. This can lead to some companies rethinking their investments entirely.
“There are probably companies who will give up because rising labor costs in the US are not worth it,” said Hideo Kumano, chief economist at the Dai-ichi Life Research Institute.
Executives were examined on their approach to diversity, equity and inclusion (DEI), particularly amidst increased political scrutiny.
Despite some prominent US companies' efforts to reduce DEI initiatives, 86.6% of Japanese companies surveyed plan to maintain DEI policies in North America.
Kubota President Yuichi Kitao emphasized the importance of such an initiative, saying, “Promoting Dei is essential for sustainable growth.”
“At the time is now the best time for Japanese companies to catch up when global trends are declining,” said the president of Daiwa Securities Group, who has acknowledged Japan's relatively slow pace in dealing with workplace diversity compared to other developed countries.
