Showing posts with label Tariffs. Show all posts
Showing posts with label Tariffs. Show all posts

Sunday, August 23, 2026

The Future of American Competitiveness

The U.S. Needs to Fund Research to Be Competitive

Michael Schiffer, Senior Advisor at Scalare Advisors, Senior Fellow at the Center for American Progress, and APP Member.

First Published August 19, 2026 on the American Leadership Initiative Substack.

The United States is in the midst of a fundamental reconsideration of its economic relationship with the rest of the world. Tariffs, export controls, investment screening, supply-chain diversification and efforts to bring manufacturing back to American soil have moved from the margins of economic policy to its center. The rationale is straightforward: in a world of geopolitical competition and vulnerable supply chains, the United States cannot afford to depend on foreign sources for technologies and products that are essential to its economic and national security.

While this premise has broad support, there is a legitimate debate over how tariffs should be designed, how broadly they should be applied, and what costs Americans should be willing to bear in pursuit of greater economic resilience. But there is a more fundamental question that has received less attention: what happens if the United States uses trade policy to encourage production at home without maintaining the scientific, technological and industrial capabilities needed to make that production competitive?

Trade policy can change the incentives facing American companies. It cannot, by itself, create the engineers, scientists, technicians, factories, research institutions and supply chains that allow those companies to compete.

Much of American innovation has its roots in government funded research. The land-grant universities that trained generations of engineers, DARPA’s investments that helped produce the internet, and the NIH research infrastructure that has generated generations of medical discoveries were all the products of Americans making long-term bets on the country’s productive capacity and backing those bets with public resources to build the infrastructure, knowledge and human capital on which private enterprise could flourish.

That model of public investment is more important now than ever because the nature of international economic competition has changed. China and other countries are investing heavily in advanced manufacturing, artificial intelligence, biotechnology, energy and the infrastructure that supports them. Companies are reconsidering where they manufacture and source critical inputs. Governments are competing for investment and technological talent. Supply chains are being reorganized not only according to cost and efficiency, but according to resilience and national security. The result is a new economic landscape in which trade policy and domestic investment are inseparable. And success will require combining open markets with technological leadership, industrial policy, and worker training with secure economic partnerships.

The semiconductor industry provides perhaps the clearest example. The CHIPS and Science Act reflected a recognition that advanced semiconductor manufacturing is not simply another industry. Chips underpin virtually every modern economy, from automobiles and telecommunications to artificial intelligence and defense. The program’s early results suggested that targeted industrial policy could generate tangible benefits: CHIPS-funded projects created tens of thousands of jobs and raised wages in affected communities. Semiconductor manufacturing jobs now average $57.78 an hour, demonstrating that investments in advanced manufacturing can anchor high-value economic activity in American communities while strengthening capabilities essential to national security.

The engineers and scientists who develop new technologies do not appear when policymakers decide that a particular supply chain has become strategically important. They emerge from universities, laboratories and research programs that require years of sustained investment.

This is why reductions or uncertainty in federal research funding matter to economic competitiveness even when the immediate objective is fiscal restraint. The damage is rarely visible in a single budget year. It appears later, in the technology that is never developed, the company that is never founded, the researcher who takes a position elsewhere, or the manufacturing facility that chooses a different country because the surrounding ecosystem is stronger. In addition to growing investment in federal R&D, we must increase investment in U.S. STEM education, as well as reopen immigration to high skilled workers from around the world.

The United States has seen this dynamic before. Google’s origins, for example, can be traced in part to a National Science Foundation grant to two Stanford graduate students. The lesson is not that every government-funded research project produces a Google. It is that the economic returns from public investment in science are often unpredictable, long-term and vastly larger than the original investment.

That makes the current debate over trade policy particularly consequential. The administration has increasingly used tariffs and other trade measures to encourage domestic production, including in semiconductors and critical materials. The logic is understandable: if foreign dependence creates strategic vulnerability, changing the price and availability of imports can encourage companies to build capacity in the United States. Recent trade measures on semiconductors and polysilicon explicitly connect import policy with strengthening domestic supply chains.

But a tariff is an instrument, not a strategy. It can change relative prices. It can discourage dependence on a foreign supplier. It can give domestic producers greater room to compete. What it cannot do is determine whether American companies have the technology, workers, energy, infrastructure and supplier networks needed to take advantage of that opportunity.

If policymakers want companies to manufacture more in America, the country must also have the research institutions, skilled workforce, infrastructure, energy, component suppliers and technological ecosystems necessary to support it, and invest in the capabilities that allow American companies and workers to compete when market incentives change.

A serious American industrial strategy does not require Washington to decide which individual companies should succeed. It requires government to build the conditions in which strategically important industries can succeed: world-leading research, a skilled workforce, reliable and affordable energy, modern infrastructure, access to capital, predictable investment incentives and trade relationships that expand markets while reducing dangerous dependencies. Tariffs and trade policy are one component of that strategy, not a substitute for the entirety of it.

For decades, the argument was that trade policy, technology policy and economic statecraft had direct consequences for American wages, jobs and communities. That connection remains real. A semiconductor factory creates jobs not only inside the fab but throughout a regional network of suppliers. A research university trains the scientists and engineers those companies will eventually need. A federal research grant can generate technologies that become the foundation of entirely new industries.

The reverse is also true. Weakening those ecosystems can make otherwise sensible trade and industrial policies less effective.

Nor should industrial strategy stop at the water’s edge. The United States does not need to produce every important input domestically. But it does need to ensure that America and its allies collectively possess the capacity to produce the technologies, materials and components on which our prosperity and security depend. Building resilient economic partnerships with trusted countries should be treated as part of industrial strategy itself.

Americans can disagree about tariffs and the appropriate role of government in the economy. They can disagree about how much protection domestic industries should receive and how quickly supply chains should be reshaped. But if the United States is going to ask American workers to compete in a more contested global economy there should be consensus that we need to make sure they have the tools to do so.

The objective is not simply to return to an era when efficiency and low consumer prices were the only measures of a successful trading system. The objective should be capacity: the ability to innovate, manufacture, adapt and compete when circumstances change.

And that is ultimately how today’s trade policies should be judged. Tariffs can change the terms on which Americans trade with the world. Export controls can limit access to sensitive technologies. Supply-chain policies can reduce dangerous dependencies.

But none of those tools can substitute for the underlying capabilities of a competitive economy.

The United States has spent generations building those capabilities. The challenge now is to make sure that, even as we rethink how America trades with the world, we do not neglect the investments that determine whether America can continue to lead.

Tuesday, May 5, 2026

Japanese Wagyu in the American Market

Japan’s Wagyu Quest and the Case for Reciprocal Beef Trade

by Phil SengAffiliate Professor in the Department of Animal Sciences at Colorado State University, Past President & CEO of the U.S. Meat Export Federation, and Past President of the International Meat Secretariat, and APP Member.

First Published March 10, 2026 on Meatingplace. PDF version here.

N.B.: This issue was not discussed at the Summit.

Japanese Prime Minister Takaichi and President Donald Trump will meet on March 19, where both leaders are expected to reaffirm their commitment to fair and reciprocal trade. For decades, U.S. presidents urged Japan to open its tightly restricted beef market, which once symbolized the closed nature of the Japanese economy.

Today, the roles are reversed. Prime Minister Takaichi should urge the United States to remove restrictions that limit Japanese Wagyu beef exports to the American market. Japan now finds itself in the unusual position of having a bilateral trade agreement with the United States — yet still faces a trade-distorting tariff-rate quota (TRQ) on beef imports, including the 26.4% out-of-quota tariff currently applied once the quota is triggered.

Implemented in 2020 through executive authority rather than a comprehensive congressional free trade agreement, the current U.S.–Japan Trade Agreement (USJTA) delivered important tariff reductions, but it did not resolve the structural barrier that Wagyu exporters now face in the U.S. market.

Japan’s Longstanding Support for U.S. Agriculture
Beef access may not rank among the top issues in the broader U.S.–Japan relationship. Yet a closer look reveals that liberalizing the U.S. market for Japanese Wagyu would reinforce a mutually beneficial agricultural partnership. Thirty-five years ago, Japan eliminated its own beef import quota, and 20 years ago it reopened its market to U.S. beef following the BSE crisis. Expanding access for Wagyu today would strengthen a supply chain that significantly benefits American farmers. More than 80% of the feed used by Japanese livestock consists of imported grains and oilseeds, much of it from the United States.

A compelling argument for reform lies in Japan’s longstanding role as a cornerstone customer for U.S. agriculture. For more than 75 years, Japan has been one of the most reliable buyers of American feed grains and oilseeds — imports that sustain Japan’s livestock sector and directly support U.S. farmers. Japan consistently imports roughly 10–15 million metric tons of corn annually from the United States, along with significant volumes of soybeans, wheat, and sorghum.

In other words, a thriving livestock sector in Japan directly supports U.S. agriculture, from Midwestern grain farmers to the broader feed supply chain that underpins livestock production. This raises the natural question of why isn’t there stronger support among U.S. grain producers for more liberalized Japanese beef access when their own export success depends so heavily on Japan’s livestock industry?

Tariff-Rate Quotas and Market Challenges
When the USJTA entered into force in 2020, Japan’s previous country-specific quota of 200 metric tons was folded into the broader “All Others” quota of 65,005 metric tons. At the time this appeared workable because Japan had not historically filled the quota.

That changed when Brazil, previously ineligible to export beef to the United States, gained U.S. market access and was included in the same quota category. Since then, Brazil has repeatedly fillednearly the entire quota. In 2025 the quota was triggered after just 17 days, and  in 2026 it was exceeded on Jan. 6, with approximately 99% of the quota filled by Brazilian shipments. As a result, Japanese Wagyu exporters and U.S. importers face steep tariffs almost immediately each year.

Meanwhile, the U.S. has approved specific quota arrangements or allocations for other countries. The U.S.–UK trade agreement created a 13,000-metric-ton carve-out for British beef within the same quota framework, while Argentina recently received a 100,000-metric-ton allocation. In contrast, 
Japanese Wagyu imports face the 26.4% tariff once the TRQ is filled, even though Japan remains one of the United States’ closest economic and strategic partners.

For American importers, the consequences are significant. Wagyu beef can be five to 10 times more valuable than commodity beef, meaning the ad valorem tariff becomes proportionally more expensive for importers, foodservice operators, and retailers. The quota also creates uncertainty in the marketplace, forcing importers to speculate about when tariffs will take effect and limiting decisions about product range, quality grades, and whether to import frozen or chilled beef.

This uncertainty discourages participation across the supply chain, from importers and distributors to restaurants and retailers, ultimately reducing availability for American consumers w,tarhile pushing prices higher for one of the world’s most prized beef products.

Japan’s Track Record as a Trusted Trade Partner
Japan has repeatedly strengthened the bilateral agricultural relationship over the past four decades. It liberalized its beef market between 1988 and 1991, reforms that later served as a model for market-opening agreements in Korea. Japan also reformed its retail and distribution laws, allowing U.S. exporters to sell directly into the Japanese market. In 1995 Japan decoupled domestic pork prices from import pricing, enabling a surge in chilled U.S. pork exports. In 2006 it reopened its market to U.S. beef following the BSE crisis, restoring one of America’s most valuable export destinations.

The results speak for themselves: Over the past 50 years Japan has imported more than $100 billion in U.S. red meat and by-products and remains one of the most dependable markets for American agriculture.

At the same time, Japanese beef represents an almost negligible presence in the U.S. market, accounting for less than 0.003% of total U.S. beef imports. Japanese Wagyu also occupies a highly specialized ultra-premium niche that complements rather than competes with the mainstream U.S. beef market. In practical terms, expanded Wagyu access would be economically negligible for U.S. producers but symbolically important for maintaining credibility in reciprocal agricultural trade.

Why Equal Treatment Matters
Japan is not seeking special treatment — only equal treatment. For decades, Japan has opened its markets, invested in American agriculture, and supported the livelihoods of U.S. farmers and ranchers. Ensuring fair access for Japanese Wagyu to the United States would acknowledge the depth of this partnership while reinforcing a trade relationship that benefits both countries.

Trade between allies should reflect trust, reciprocity, and long-term partnership. When nations invest in each other’s success, market access should move in both directions. That is how trade becomes durable, balanced, and mutually beneficial.

A Gift for the Future
It is customary when heads of state meet to exchange gifts. In this case, the United States could offer one with lasting value — leveling the playing field for Japanese Wagyu in the American market. After all, Japan has already made the down payment.

Sunday, October 12, 2025

Asia Policy Events, Monday October 13, 2025

COLUMBUS DAY HOLIDAY IN U.S.

IMPACT OF THE TRUMP TARIFFS ON CAMBODIA, LAOS AND VIETNAM. 10/13, 9:00-10:30am (SGT), 10/12, 9:00-10:30pm (EDT), VIRTUAL. Sponsor: ISEAS – Yusof Ishak Institute. Speakers: Dr. Milan Thomas, Country Economist, Cambodia Resident Mission, ADB; Soulinthone Leuangkhamsing, Principal Economics Officer, Lao PDR Resident Mission, ADB; Prof. Dao Ngoc Tien, Vice President, Vietnam’s Foreign Trade University (FTU).


Sunday, September 28, 2025

Asia Policy Events, Monday September 29, 2025

UNDERSTANDING THE THAILAND-CAMBODIA CONFLICT: HOW BORDER DISPUTES DRIVE DOMESTIC POLITICAL CRISES AND VICE VERSA. 9/29, 10:00-11:30am (SGT), 9/28, 10:00-11:30pm (EDT), VIRTUAL. Sponsor: Yusof Ishak Institute (ISEAS). Speakers: Dr. Puangthong R. Pawakapan, Professor, Department of International Relations, Faculty of Political Science, Chulalongkorn University; Supalak Ganjanakhundee, Advisor, Military Affairs Committee, Thailand’s House of Representatives. 

WORLD WAR II AT 80: THE UNENDING QUEST FOR REDRESS. 9/29, 6:30pm (JST), 5:30am (EDT), IN PERSON ONLY. Sponsor: Yokosuka Council on Asia Pacific Studies. Speaker: Timothy Webster, Lawyer, Professor, Translator. 5

BOOK TALK: THE NATIONAL INTEREST: POLITICS AFTER GLOBALIZATION. 9/29, 11:00am-Noon (EDT), VIRTUAL. Sponsor: Quincy Institute. Speakers: author Philip Cunliffe, Associate Professor of International Relations, Department of Risk and Disaster Reduction, University College London; Dr. Zachary Paikin, Deputy Director, Better Order Project, Research Fellow, Grand Strategy Program, Quincy Institute.  PURCHASE BOOK

WHAT ROBERT F. KENNEDY’S LIBERAL PATRIOTISM COULD TEACH POLITICAL LEADERS TODAY. 9/29, 11:00am-12:30pm (EDT), HYBRID. Sponsor: American Enterprise Institute (AEI), Progressive Policy Institute (PPI). Speakers: Robert Doar, President, AEI; Richard D. Kahlenberg, Director, American Identity Project, PPI; Will Marshall, President, PPI; Ritchie Torres, US House of Representatives (D-NY).

BREAKING TRADITION: PRESIDENT TRUMP’S APPROACH TO POLICY DECISIONS AND IMPLEMENTATION. 9/29, 12:30pm (EDT), IN PERSON ONLY. Sponsor: Japan Society. Speaker: Wilbur L. Ross, Jr., Former U.S. Secretary of Commerce; Former Board Chair, Japan Society. Members only.

SHIFTING DYNAMICS IN THE MIDDLE EAST: PYONGYANG'S OBSERVATIONS AND OPPORTUNITIES. 9/29, 2:00pm (EDT), VIRTUAL. Sponsor: National Committee on North Korea. Speakers: Yaakov Katz, Israeli-American author and journalist, co-founder of MEAD; Siegfried Hecker, former director, Los Alamos National Laboratory, Professor Emeritus, Stanford University.

INTERNATIONAL LAW FOR WHOM? 9/29, 3:00-4:00pm (EDT), HYBRID. Sponsor: U.S.–Asia Law Institute. Speaker: Jean-Marc Coicaud, Distinguished Professor of Law and Global Affairs, Rutgers University, author The Law and Politics of International Legitimacy. PURCHASE BOOK

THE IDEAS THAT BUILT AMERICA—AND WHERE THEY STAND TODAY. 9/29, 5:00-6:30pm (EDT), IN PERSON ONLY. Sponsor: R Street Institute. Speakers: Sabrina Schaeffer, Vice President, R Street Institute; Lindsay M. Chervinsky, PhD, Presidential Historian/Executive Director, George Washington Presidential Library at Mount Vernon. 

BEYOND TARIFFS: WHAT NEXT FOR THE GLOBAL TRADE REALIGNMENT? 9/29, 5:00-7:30pm (EDT), IN PERSON ONLY. Sponsor: Association of Women in International Trade (WIIT); George Washington University (GWU). Speakers: Christine McDaniel, Senior Economist, Macroeconomics, Trade & Investment Global Practice, World Bank Group; Daniel Ciarcia, Account Manager/Carbon Consultant, EcoEngineers; Bennett Caplan, President, Abridge; Jenny A. Kai, Senior Manager, Government and Public Affairs, Japan Automobile Manufacturers Association (JAMA). 

Sunday, August 3, 2025

Prime Minister Ishiba Holds On

The Struggle to Bring Ishiba Down

By Takuya Nishimura, APP Senior Fellow, Former Editorial Writer for The Hokkaido Shimbun.

The views expressed by the author are his own and are not associated with The Hokkaido Shimbun.
You can find his blog, J Update here.
July 28, 2025. Special to Asia Policy Point
 
Despite reaching a deal on tariffs with the United States, Japan’s Prime Minister Shigeru Ishiba faces difficulty in maintaining his government. Anti-Ishiba lawmakers in the Liberal Democratic Party (LDP) are expanding their efforts to remove Ishiba from the leadership. Some newspapers reported that Ishiba has already decided to step down. However, since then, Ishiba has repeated that he would continue to fulfill his responsibilities as prime minister. It is not unusual that the LDP replaces its top leader to represent itself as a “new-born LDP” right after serious defeat in an election.
 
Ishiba announced to the press that he would stay on as prime minister after the polls closed on July 20 for the upper house elections. On July 23 in Japan, two newspapers, the Mainichi Shimbun and Yomiuri Shimbun, however, reported on the front page of their evening editions with huge headlines that Ishiba would step down soon.
 
Yomiuri reported that Ishiba had told one of his aides of his coming resignation on the night of July 22, just before the announcement of an agreement on tariffs between Japan and the United States. “Tariff negotiations are about the national interest. I bet on Akazawa (the top negotiator for Japan). I will explain my responsibility for the defeat in Upper House election soon after the tariff negotiations are settled, but I cannot say I’m resigning so far” Ishiba said, according to Yomiuri. The conversation with the aide seems to be the source of the news of Ishiba’s resignation.
 
The news of a Japan-U.S. tariff deal came in the morning of July 23 Tokyo time. In return for Japan’s pledges to invest $550 billion in the U.S. and to purchase $8 billion of U.S. products, including a 75 percent increase in purchases of U.S. rice, the U.S. reduced the “reciprocal tariff” on Japanese goods from 25 to 15 percent. The Tokyo Stock Market rallied on July 23, welcoming the deal.
 
On the same day, July 23, Ishiba met with three former prime ministers and LDP heavyweights: Taro Aso, Yoshihide Suga, and Fumio Kishida. Observers believe that Ishiba tried to explain his intention to stay on as the prime minister, but those ex-premiers did not support him.
 
According to news reports, Aso concluded that, under Ishiba’s leadership, the LDP cannot win an election, considering the defeats in the Lower House election last October and the Tokyo Metropolitan Assembly election in June 2025. Kishida urged Ishiba to make clear whether he was staying or going. Suga insisted that Ishiba make sure that he does not divide the party. After the meeting, Ishiba said that there was no discussion of his possible resignation.
 
Internal opposition to Ishiba’s prime ministership has spread in the LDP. Some lawmakers formerly affiliated with the Motegi faction, one of the anti-Ishiba powers in the party, started collecting signatures of LDP lawmakers to request a Joint Plenary Meeting of Party Members of Both Houses of the Diet (JPM), an official meeting which can elect new president.
 
The LDP held an unofficial meeting of Diet members on July 28, rather than call a JPM. Ishiba asked for support to continue his presidency to implement the tariff deal with the U.S. While his appeal seemed to fall on deaf ears, many participants wanted the party to identify who was responsible for the disastrous results of the Upper House election. LDP Secretary General, Hiroshi Moriyama, stated that he would do so after the LDP’s review of the election finishes in August. There still is the possibility to hold a JPM, as there have been many requests to do so.
 
Anti-Ishiba groups in the LDP have redoubled their efforts to remove Ishiba. Four leaders of the former (now-disbanded) Abe faction -- Koichi Hagiuda, Yasutoshi Nishimura, Hirokazu Matsuno, and Hiroshige Seko – met at a faction reunion on July 23. One of the finalists in the election for president of the LDP last September, Sanae Takaichi, met with Aso and Nishimura to ask for their support.
 
Some local branches of the party, including the Tochigi Branch led by Toshimitsu Motegi and the Nara Branch, which is the home of Takaichi, submitted requests for the renewal of LDP leadership. After receiving complaints from some local organizations, the LDP Youth Division made the same request.
 
Reshuffling LDP leadership would not, however, address the policy issues behind the party’s recent losses. For example, the kickback scandal was one of the main reasons for those losses. “Who ruined the LDP?” Ishiba asked his colleagues, insisting on his authority to lead the country. Ishiba seems to think that he has at least three responsibilities in the coming weeks: 1) to conclude all the details in the tariff negotiations with the U.S. and related measures for Japanese business sectors; 2) to deliver his own message on August 15 at the 80th anniversary of the end of World War II; and 3) to lead the Tokyo International Conference on African Development ((TICAD 9) in late August.
 ,jap
There is a speculation that Ishiba will step down after completing this agenda. The usual process of replacing an unpopular LDP prime minister is a growing demand for his resignation, a request for a presidential election, and the emergence of new leaders to replace the prime minister. If Ishiba steps down this fall, he will be added to the list of ordinary leaders who held a short term.
 
Once a new LDP president is elected, leaving the prime minister to declare his cabinet’s resignation en masse and both Houses elect new prime minister. If the Houses elect different people, the winner in the Lower House becomes the prime minister. Now, it is uncertain that a LDP candidate will win, given that there is no majority of the leading coalition in both Houses.
 
However, the opposition to Ishiba has some unusual elements. One is that the driving forces for his replacement are the very ones responsible for losing the election. Most lawmakers in the LDP, and not just the members of the former Abe faction, were reluctant to refuse donations from companies to guarantee the transparency of political fundraising. Another element is the absence of alternative contenders to replace Ishiba. The next leader must have the ability to manage negotiations with opposition parties in the Diet. Ishiba has proven his ability to do so; it is not apparent who else in the LDP could take this on.
 
On July 25, a large demonstration was held near the prime minister’s official residence to support the continuation of the Ishiba government. Participants shouted “Hang in there, Ishiba!” and “Don't resign!” Although there have been frequent protests against incumbent prime ministers, especially during Shinzo Abe’s administration, it is highly unusual that a crowd would gather to chant in favor of a prime minister retaining his position. Encouraged by these supporters, Ishiba must consider how to define his continuing “responsibility” as prime minister.

Saturday, July 12, 2025

Japan's Upper House Elections I

Parties Campaign on Three Policy Differences


By Takuya Nishimura,
APP Senior Fellow, Former Editorial Writer for The Hokkaido Shimbun. The views expressed by the author are his own and are not associated with The Hokkaido Shimbun.
You can find his blog, J Update here.
July 7, 2025. Special to Asia Policy Point

Japan’s Upper House election season opened on July 3 with the vote to take place on July 20. This election is overwhelmingly about two issues: support of families suffering from price inflation and international relations, specifically with the United States. In addition, the management of political funds by the leading Liberal Democratic Party (LDP) will be front and center for many voters.

Protection against price inflation has largely taken the form of a debate over the consumption tax. Voters are divided over possible measures to reduce price inflation – so the parties have focused on this issue. In an NHK poll in May, 38 percent of respondants favored a consumption tax cut, while just two percent fewer, 36 percent, supported the current consumption tax rate. Eighteen percent wanted to abolish the consumption tax altogether.

Several opposition parties would reduce or eliminate the tax. The Constitutional Democratic Party of Japan (CDPJ) proposes a zero percent consumption tax on food, which is their top priority. The leader of the CDPJ, Yoshihiko Noda, insists that the government can eliminate this part of the consumption tax without an impact on government finances that would compel the issuance of new government bonds.

In a debate featuring party leaders at the Japan National Press Club (JNPC) on July 2, Prime Minister Ishiba (the president of the LDP) asked Noda what financial resources would offset the consumption tax cut. Noda pointed to two areas: the surplus in the governmental funds that are reserved for special policy purposes and the foreign exchange fund special account. Noda also said that other, unspecified tax measures could be revised.

The CDPJ has estimated that eliminating the consumption tax on food would reduce tax revenues by five trillion yen a year. Noda said in February that his party had found a 7.8 trillion-yen surplus in governmental funds. He also argued that much more of the government’s profits in foreign exchange could be included in the government’s general account. And he asserted that the special purpose tax on wage increase would increase the government’s revenues by 0.7 trillion yen. In the CDPJ’s view, all these resources would make a consumption tax cut on food feasible.

Taking a different approach, the Democratic Party for the People (DPP) calls for halving consumption tax rate (from ten percent to five percent) on all goods on a time-limited basis. The cut would continue until the growth in workers’ wages exceeds consumer price inflation. But the party has not identified as specific budgetary resource for this tax reduction as what the CDPJ listed.

The Japan Communist Party (JCP) favors another route: reducing the consumption tax rate on all goods to five percent before taking it to zero. But the party has not announced when the consumption tax will be repealed. Reiwa Shinsengumi, a small party with liberal policies, says that the government can offset these rate cuts by raising other tax rates and issuing government bonds.

The Japan Innovation Party (Nippon Ishin-no Kai) does not look to the consumption tax rate to protect against the effects of inflation but rather focuses on reducing premium for social insurance.

In lieu of any changes to tax rates, the LDP and Komeito propose to distribute twenty thousand yen to everyone and an additional twenty thousand yen for each child or a low-income family. The parties dismiss consumption tax rate reductions as unviable. To that point, in the debate at the JNPC, the chief representative of Komeito, Tetsuo Saito, asked Noda about what would happen when the government resumes the current consumption tax rate, which in a sense becomes a tax increase. Noda did not provide a clear answer.

Turning to international relations, the opposition parties are critical of Ishiba’s management of foreign affairs. Just a few days before the start of election campaign, U.S. President Donald Trump expressed his frustration with the bilateral tariff negotiations between the U.S. and Japan. “Dear Mr. Japan, here’s the story: You’re going to pay a 25 percent on your cars,” said Trump. He also complained about the small amount of Japan’s imports of American rice, particularly given the rice shortage in the Japanese market.

In a mixed message yesterday, July 7, Trump sent a letter to Ishiba, saying that a 25 percent tariff on all Japanese goods would apply on August 1 unless the countries reach an agreement before then. Trump had previously set a deadline of July 9 for the conclusion of tariff negotiations, so his letter extends the negotiating timeline. Interestingly, the deadline is ten days after the election.

In the JNPC debate, Noda asked Ishiba how he planned to resolve these negotiations. Ishiba did not specify a way forward but stressed that Japan’s unique position as the biggest national investor and biggest job creator in the U.S. “The success of Nippon Steel’s acquisition of U.S. Steel means that they can deliver good products with their technology and U.S. Steel’s labor force. I think our position with the U.S. is more about investment than tariffs,” Ishiba said. When Noda recommended another summit talk with Trump as soon as possible, Ishiba simply repeated that he would protect the national interests of Japan.

The Trump administration has demanded that Japan increase its defense budget to cover the costs of expanding its military and of hosting the U.S. Armed Forces in Japan. At the JNPC debate, the Chairwoman of the Japan Communist Party, Tomoko Tamura, observed that a swollen military budget would not be compatible with social security policies. When Ishiba rejected Tamura’s argument for failing to recognize Japan’s security situation, Tamura accused Ishiba of ignoring suffering families.

On another foreign policy note, the debate covered Trump’s recent reference to the atomic bombing of Hiroshima and Nagasaki. Trump compared those events to the recent U.S. bombing of Iran’s nuclear facilities as tactics that ended a war. (In the case of Iran, a ceasefire would count as an ending.) Ishiba refrained from criticizing Trump. The Chief Representative of Komeito, Tetsuo Saito, rejected the comparison.

The greatest single reason for the LDP’s major defeat in the Lower House election last October was the party’s mismanagement of political funds. That weakness remains. Ishiba failed to reach a consensus with the opposition parties on the regulation of donations from companies and organizations during the ordinary session of the Diet. The issue surely will weigh in the voters’ decision later this month.

The opposition parties have different views on the question of political donations. The Japan Innovation Party urges a total ban on corporate and organizational donations, while the CDPJ would allow donations from some organizations. The DPP fundamentally opposes any ban on donations. As seen in their mistake of fielding multiple candidates in single-seat districts such as Nara, Shiga or Fukui, the fragmentation of the opposition parties may help the LDP.

Thursday, July 3, 2025

Lobbying Trump's Tariffs

Tariff-related lobbying surged in the first quarter of 2025

By Leonardo Pini, OpenSecrets, July 1, 2025

Throughout the 2024 campaign, Donald Trump touted the financial windfall to be reaped if the United States were to impose a series of revenue-raising tariffs. Since returning to office, the president has followed through on that promise — but has rescinded or reduced some tariffs and faced multiple court challenges threatening to derail his economic agenda.

As companies, investors and trading partners grapple to keep up with the constantly shifting tariff landscape, one industry has seen a big boost to its bottom line: the lobbying sector, which experienced a surge in tariff-related work in the first quarter of 2025.

In the first three months of this year, lobbyists represented 215 clients on tariff issues, according to lobbying disclosure reports studied by OpenSecrets. In all of 2024, lobbyists handled tariff work for just 120 clients. And it’s not just the number of clients signed — lobbyists stepped up their work on those contracts, filing 1,707 reports on tariff work in the first quarter of 2025. That puts them on track to surpass last year’s total of 5,679

If they keep up that pace, they would surpass the number of reports filed in 2018 and come closer to the 2019 total, when Trump implemented tariffs in his first term. 

Most active lobbyists

  • One of the industries that has had a difficult time navigating the strategy behind Trump’s trade war has been pharmaceuticals. In recent weeks, Trump has threatened to impose tariffs on medicines as part of a broader strategy to manufacture more drugs domestically. As a result, amongst the companies that have increased their lobbying spending the most from Q1 2024 to Q1 2025 we can find major organizations like the Pharmaceutical Research and Manufacture of AmericaEly Lilly and Apotex. PhRMA increased its spending from $9.8 million to almost $13 million. Ely Lilly boosted its spending from $1.9 million to $3.5 million. Apotex’s expenses surged from $140,000 to $810,000, as the company spent more in Q1 2025 than all of 2024.
  • The three companies have lobbied on significantly different issues. Apotex has lobbied to exempt pharmaceutical products from becoming part of the broader trade war launched by the Trump administration. Eli Lilly has lobbied mostly on intellectual property, access to markets through trade negotiations and general issues related to tariffs and trade talks with Japan, the European Union, China, India, the United Kingdom and Brazil. Some of the issues PhRMA has been focusing on regard intellectual property as well tariffs policy related to the pharmaceutical sector and section 301 of the Trade Act of 1974, which gives the president powers to take actions against unfair trade practices. 
  • One of the companies more active on lobbying on tariffs has been Hawaii Gas, which had not reported any lobbying activity in previous years. The company lobbied on issues related to the imports of propane from Canada. Propane and energy products are protected by the USMCA (U.S.-Mexico-Canada) trade agreement. It spent $40,000 in Q1 2025 on that and more general issues related to tariffs on Canada. 
  • Nike Inc. and Adidas AG, amongst the biggest apparel companies in the world, are amongst the companies that offshore their production the most, especially in the Indo-Pacific region, set to be hit hard by Trump’s tariffs. Both companies have boosted their lobbying expenditures: Nike went from $410,000 in Q1 2024 to $630,000 in Q1 2025, while Adidas went from $10,000 to $27,000. According to the Budget Lab at Yale University, tariffs could spike clothing and textiles price lines by 17 percent. Nike lobbied mostly on policies that could result in adversary foreign tariffs and goods imported from China. Adidas filed only one report in 2025 regarding tariffs. 
  • General Motors also reported a huge spike in lobbying expenditures in the first quarter, with trade being one of the top priorities. The automotive giant has surged its lobbying expenses from $4.8 million in Q1 2024 to $8.2 million in Q1 2025, a 69 percent increase. Amongst the most pressing issues for the company are non-tariff trade barriers, USCMA and the international auto supply chain. The company has also said that tariffs will cost it up to $5 billion
  • Apple has been a target for Trump for some time, as he tries to compel the tech giant to bring its manufacturing to the United States, saying recently that he has “a little problem with Tim Cook.” Trade-related issues has been one of the main focuses for the company, filing three reports regarding trade in the first quarter of 2025. Reports touch on different issues such as U.S. competitiveness in global markets and reintroduction of the American Innovation and Choice Act and/or the Open App Markets Act. The company,  headquartered in Cupertino, California, has increased its lobbying efforts from $2.1 million in Q1 2024  to $2.5 million in Q1 2025. 
  • Paper Excellence, a North-American pulp and paper company, has increased its lobbying expenses on tariffs by 237 percent between Q1 2024 and Q1 2025. The company went from $80,000 in the first quarter of last year to $270,000 in the first quarter of this year. It filed different reports on tariffs: one regarding the miscellaneous tariff bill, one regarding general discussions on the impact of tariffs and one regarding section 301 of the Trade Act of 1974. 
  • Two aluminum companies — Century Aluminum and Aluminum Association — also reported a spike in lobbying on tariffs. The latter went from $80,000 in Q1 2024 to $230,000 in Q1 2025, lobbying mostly on aluminum trade and tariffs issues. Century Aluminum went from $119,000 to $229,000. It lobbied on section 232 of the Trade Expansion Act of 1962, which gives the president powers to adjust imports of certain goods if there’s a concern for national security. Century Aluminum also lobbied to support the effort of the administration to increase tariffs on imports of steel and aluminum from China. In June 2025, Trump announced an increase of tariffs on those products from 25 percent to 50 percent. 

Why does it matter?

U.S. and international companies are trying to keep up with the administration’s shifting tariff policies, knowing any changes would impact supply chains, production lines, the cost of putting together a product or offering a service, and therefore the final cost consumers will pay. 

According to the Budget Lab at Yale University “the price level from all 2025 tariffs rises by 2.3% in the short-run, the equivalent of an average per household consumer loss of $3,800 in 2024$. Annual losses for households at the bottom of the income distribution are $1,700.”

And it’s not just big companies and their consumers that are going to pay the price of Trump’s decisions. Small businesses are also affected by the scale of these measures and the on-again, off-again policies.