野村-特朗普政府对等关税的影响

GlobalMarketsResearch

Japaneconomicperspective17February2025

EQUITY:JAPANSTRATEGY

ImplicationsofTrumpadministration'sreciprocaltariffs

PotentialimpactonitemswithlargegapbetweenUSandJapanesetariffrates,aswellasonforexandwagehikes

•Systemdesignstillunclear,includingcriteriaforimposingreciprocaltariffs

•AreasinwhichJapanhashighertariffsthantheUSincludedairyproductsandvegetablejuice

•USmaterialsonnon-tariffbarriersincludementionsofagriculturalgoods,automobiles,electricpower,telecommunications,andpharmaceuticals

ResearchAnalysts

Macrostrategy

KoheiOkazaki-NSC

kohei.okazaki@+81367031255

TheTrumpadministrationisnowmakingmovestowardimposingreciprocaltariffs.Asthespecificsofthesystemareuncertainatthispoint,theimplicationsofreciprocaltariffsontheJapaneseequitymarketasawholearenotyetclear.Wecan,however,lookoverthepotentialimplicationsbasedontheinformationwehaveavailableatthisstage.Inthis

report,wediscussfourpossibleimplicationsfortheJapaneseequitymarketfromamacroeconomicperspective.

Firstpotentialimplication:Reciprocaltariffsmaybedecidedonaproduct-by-

productbasis

First,tariffsmaybesetatdifferentratesatthelevelofindividualitems.TheUSWhite

House'sfactsheetonreciprocaltariffscitesasanexamplethegapbetweentheUSandBrazil'stariffratesonethanol(theUStariffis2.5%,whileBrazil'sis18%).OtherexamplesincludestarkdifferenceswithIndiaintariffsonmotorcyclesandwiththeEUon

automobiles.Differencesintariffratesforindividualitems,ratherthanaveragetariffratesforthetotalvalueoftrade,couldthusbecomeanissue.

Fromthisperspective,theimpactofreciprocaltariffsonJapanshouldberelativelysmall.AccordingtoareportpublishedbythepreviousTrumpadministrationin2019,Japan

ranks123rdoutof132countriesintermsofthepercentageofgoodswithhighertariffsthanthoseimposedbytheUS

(Figure1

).

SeeAppendixA-1foranalystcertification,importantdisclosuresandthestatusofnon-USanalysts.

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Fig.1:USWhiteHousereportonreciprocaltariffs(publishedinMay2019)

Rank

Tradepartner

TariffratesrelativetothoseimposedbytheUS

High

Low

Similar

(Numberof

items)

(%)

(Numberof

items)

(%)

(Numberof

items)

(%)

1

Cameroon

5,037

97

104

2

64

1

2

Algeria

5,181

96

123

2

84

2

3

CentralAfricanRepublic

4,951

95

122

2

132

3

…

…

…

…

…

…

…

123

Japan

1,603

30

2,226

41

1,559

29

…

…

…

…

…

…

…

Rank

Majorcountriesthathavesetnon-reciprocaltariffs

TariffratesrelativetothoseimposedbytheUS

High

Low

Similar

(Numberof

items)

(%)

(Numberof

items)

(%)

(Numberof

items)

(%)

21

India

4,845

90

360

7

183

3

37

China

4,592

85

455

8

341

6

96

Vietnam

2,985

57

1,237

24

983

19

98

EU

2,907

54

1,271

24

1,210

22

97

Thailand

2,881

55

1,407

27

917

18

104

Taiwan

2,713

50

1,381

26

1,294

24

Source:Nomura,basedonUSWhiteHousematerials

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ThemacroeconomicimpactonJapaneseequitiesappearslikelytobesmallerthantheimpactonthesixcountriesnamedashavingsubstantialnon-reciprocaltariffs.Ofcourse,weshouldkeepinmindthatitemsforwhichthereisalargegapintariffrates(

Figure2

)couldbeaffected.

Fig.2:ItemssubjecttohighertariffsinJapanthanintheUS(top50)

Category

Categoryname

Numberofitems

Category4

Dairyproducts,eggs,naturalhoney,andotheranimalproductsnotincludedinothercategories

12

Category20

Plant-basedproductsmadefromvegetables,fruit,andnuts

10

Category41

Hides(excludingfurs)andleather

10

Category64

Footwear,gaiters,similaritems,andtheircomponents

7

Category11

Flour,processedcereals,potatoes,starches,inulin,andwheatgluten

5

Category22

Softdrinks,alcohol,andvinegar

2

Category16

Processedmeat,fish,shellfish,mollusks,otheraquaticinvertebrates,andinsects

1

Category19

Processedgrains,powderedgrains,andstarches,milkproducts,andbakeryproducts

1

Category24

Cigarettes,tobaccoproducts,andtheiralternatives,noncombustible

inhalants(regardlessofnicotinecontent),andotherproductscontainingnicotine(limitedtoproductsforhumanconsumption)

1

Category43

Furs,artificialfurs,andrelatedproducts

1

Note:Datafor2023(adjustedtoreflectJapan–UStradeagreement).

Source:Nomura,basedonUnitedNationsdata

Secondpotentialimplication:Value-addedtaxratescouldbetakenintoaccount

Second,value-addedtaxes(VAT)invariouscountriesmaybetakenintoaccountwhensettingreciprocaltariffrates,consideringthatamemopublishedbytheUSWhiteHousementionedVAT.Strictlyspeaking,Japan'sconsumptiontaxisinaseparatecategoryfromothercountries'VATs.GiventheTrumpadministration'sstatedintentions,however,we

thinkJapan'sconsumptiontaxrateisalsolikelytobetakenintoaccountwhensettingreciprocaltariffs.

Atthesametime,wewouldnotethatJapan'sconsumptiontaxrateisrelativelylowin

globalterms(

Figure3

).Whilethisishigherthan0%intheUS(thereisnosuchtaxatthefederallevel),salestaxes(aformofconsumptiontax)havebeenimposedatthestateorlocallevelinmanyareas(45statesandtheDistrictofColombia).AccordingtoasurveybytheUSthinktankTaxFoundation,themediansalestaxrateintheUS(totalforstateandlocalgovernments)asofJanuary2024was7.0%(thehighestwas9.56%in

Louisianaandthelowestwas0%inDelaware,Montana,NewHampshire,andOregon(whichhavenosalestax).Inreality,itseemsfairtosaythatthegapbetweentheUSandJapanintermsofVATisquitesmall.

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Fig.3:ConsumptiontaxratesamongOECDmembers(2024)

Source:Nomura,basedonOECDdata

Thirdpotentialimplication:Non-tariffbarriersalsotobetakenintoaccount

Third,tariffhikescouldbeaffectedbynon-tariffbarriers,subsidies,andregulations.The2024reportfromtheUSTradeRepresentative(USTR)servesasausefulreferencepointforgaugingtheUS'sviewonnon-tariffbarriersinJapan(

Figure4

).Whilementionsof

Japan'simportpoliciesarelimitedtoareassuchasrice,wheat,pork,andethanol,theoverallreportincludesmentionsofrestrictionsinawiderangeofareas,including

automobiles.Manyofthesebarriershavebeenthesubjectoflong-runningdiscussions,however.Eveninthefaceofthisnewissueofreciprocaltariffs,theseissuesarelikelytoremaindifficulttoresolve.

Fig.4:Majornon-tariffbarriersinJapanmentionedinUSTR2024report

Category

Mainpoints

Importpolicies

Areasidentifiedashavingnon-tariffbarriersincluderice,wheat,pork,andethanol.

Hygieneandplantquarantines

Barriersmentionedincludedifferencesinfoodlabelingbasedonwhenfungicidesareused(beforeorafterharvest),theneedtocomplywiththecriteriaforresidualagrochemicals,theneedtoremovespecifichazardousportionsofbeefinordertocombatBSE(bovine

spongiformencephalopathy),andthecriteriaforimportsoffreshpotatoes,apples,andstonefruit(peaches,plums,etc).

Barrierstoserviceprovision

TopicsdiscussedincludedcompetitiveconditionsbetweenJapanPostandinternational

deliverycompanies,progresswithreformsatJapanPostBankandJapanPostInsurance,howthemutualaidassociationsaretreated,thetreatmentoftaxes,scholarships,andresearch

expensesatJapanesecampusesofoverseasuniversities,increasedconfidentialitydutiesforlawyersandtheirclients,theTelecommunicationsBusinessAct,spectrumauctions,andpowertransmissioncapacityissuesrelatedtorenewableenergy.

Subsidies

Issuesmentionedincludesubsidiesforlumberandwoodproductsandtheuseofforestrytaxestofundforestmaintenance.

Otherbarriers(automotive-

related)

BarriersmentionedincludenotusingUS-basedsafetystandards;distinctiveautomotive

standardsandtestprotocols;distinctivepoliciesforallocatingspectrumfor(short-distance)

vehiclecommunicationssystems;lackofexternalinformationsystemsaspartoftheregulatory

introductionprocess;obstaclestonetworkdevelopmentforsupplyandservices;subsidiesforfuelcellvehicles(FCVs);subsidiesforsystemsfortransferringpowertransmissionfrom

chargedvehicles;andJapan-specificstandardsforchargingstations.

Otherbarriers(relatedto

medicalequipmentand

pharmaceuticals)

Barriersmentionedincludeapplyinginnovativenewdrugpremiumstodrugprices,alackoftransparencyandpredictabilityaboutdrugpricerevisions,andconsiderationofinternationalstandardsforclinicaldevelopment,clinicaltrialsinmultipleregions,andriskmanagement.

Otherbarriers(other)

Examplesincludethelowdegreeofopennessforcommitteesandresearchgroups,problemswiththeimplementationofthepubliccommentsystem,thestandardsfordesignatingfoodsforspecifiedhealthusesandfoodswithnutrientfunctionclaims,andtheneedtospeedupthe

approvalprocessforquasi-drugs.

Source:Nomura,basedonUnitedStatesTradeRepresentativedata

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Fourthpotentialimplication:Japanesegovernmentcouldstepupitspromotionofwageincreases

Fourth,theUScouldarguethatforexratesandwagelevelsareproblematic.TheUS

government'sstatementcriticizesasnon-reciprocal"policiesandpracticesthatcauseexchangeratestodeviatefromtheirmarketvalue,tothedetrimentofAmericans;wagesuppression;andothermercantilistpoliciesthatmakeUnitedStates

businessesandworkerslesscompetitive".

WethinkthisstatementwasmadewithChinaandlesseconomicallydevelopedcountriesinmind,butitcouldalsotriggercriticismofJapan.Thisisbecausetheyenhasbeen

weakeningrecently,withUSD/JPYataround152–153,andwagesinJapanhavehardlyincreasedatall(

Figure5

).Ofcourse,thisisnottheresultofanyintentionalactionsby

theJapanesegovernment,buttheTrumpadministrationcouldstillcitethisasareasonforimposingtariffs.TheJapanesegovernmentthereforecouldbecomemoretolerantofastrongeryenandfocusmoreonpromotingwagehikes.

Fig.5:Annualwages(perworker)

Source:Nomura,basedonOECDdata

Conclusion:TariffpoliciesstilllikelytoaffectJapaneseequitiesfroma

macroeconomicstandpoint

ThesecondTrumpadministrationappearstohavejustgottenstartedwithitstariff

policies.AccordingtoaBloombergreporton15February,theUSgovernmentisduetosubmitareportonreciprocaltariffsasearlyas1April,andtheTrumpadministrationis

likelytointroducetariffsonautomobilesasearlyas2April.PresidentTrumpisalso

expectedtoimposeadditionaltariffsonsemiconductorsandpharmaceuticals.WeexpecttariffpoliciestocontinuetohaveanimpactontheJapaneseequitymarketforsometime.

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AppendixA-1

AnalystCertification

I,KoheiOkazaki,herebycertify(1)thattheviewsexpressedinthisResearchreportaccuratelyreflectmypersonalviewsaboutanyorallofthesubjectsecuritiesorissuersreferredtointhisResearchreport,(2)nopartofmycompensationwas,isorwillbedirectlyorindirectlyrelatedtothespecificrecommendationsorviewsexpressedinthisResearchreportand(3)nopartofmycompensationistiedtoanyspecificinvestmentbankingtransactionsperformedbyNomuraSecuritiesInternational,Inc.,NomuraInternationalplcoranyotherNomuraGroupcompany.

ImportantDisclosures

ThelistsofissuersthatareaffiliatesorsubsidiariesofNomuraHoldingsInc.,theparentcompanyofNomuraSecuritiesCo.,Ltd.,issuersthathaveofficerswhoconcurrentlyserveasofficersofNomuraSecuritiesCo.,Ltd.,issuersinwhichtheNomuraGroupholds1%ormoreofanyclassofcommonequitysecuritiesandissuersforwhichNomuraSecuritiesCo.,Ltd.hasleadmanagedapublicofferingofequityorequitylinkedsecuritiesinthepast12monthsareavailableat

/report/

.PleasecontacttheResearchProduction

OperationDept.ofNomuraSecuritiesCo.,Ltd.foradditionalinformation.

Onlineavailabilityofresearchandconflict-of-interestdisclosures

NomuraGroupresearchisavailableon/research,Bloomberg,CapitalIQ,Factset,LSEG.

Importantdisclosuresmaybereadat

/research/m/Disclosures

orrequestedfromNomuraSecuritiesInternational,Inc.Ifyouhaveanydifficultieswiththewebsite,pleaseemailgrpsupport@forhelp.

Theanalystsresponsibleforpreparingthisreporthavereceivedcompensationbaseduponvariousfactorsincludingthefirm'stotalrevenues,aportionofwhichisgeneratedbyInvestmentBankingactivities.Unlessotherwisenoted,thenon-USanalystslistedatthefrontofthisreportarenotregistered/qualifiedasresearchanalystsunderFINRArules,maynotbeassociatedpersonsofNSI,andmaynotbesubjecttoFINRARule2241restrictionsoncommunicationswithcoveredcompanies,publicappearances,andtradingsecuritiesheldbyaresearchanalystaccount.

NomuraGlobalFinancialProductsInc.(NGFP)NomuraDerivativeProductsInc.(NDP)andNomuraInternationalplc.(NIplc)areregisteredwiththeCommoditiesFuturesTradingCommissionandtheNationalFuturesAssociation(NFA)asswapdealers.NGFP,NDPI,andNIplcare

generallyengagedinthetradingofswapsandotherderivativeproducts,anyofwhichmaybethesubjectofthisreport.

Distributionofratings(NomuraGroup)

ThedistributionofallratingspublishedbyNomuraGroupGlobalEquityResearchisasfollows:

53%havebeenassignedaBuyratingwhich,forpurposesofmandatorydisclosures,areclassifiedasaBuyrating;37%ofcompanieswiththisratingareinvestmentbankingclientsoftheNomuraGroup*.0%ofcompanies(whichareadmittedtotradingonaregulatedmarketintheEEA)withthisratingweresuppliedmaterialservices**bytheNomuraGroup.

45%havebeenassignedaNeutralratingwhich,forpurposesofmandatorydisclosures,isclassifiedasaHoldrating;55%ofcompanieswiththisratingareinvestmentbankingclientsoftheNomuraGroup*.0%ofcompanies(whichareadmittedtotradingonaregulatedmarketintheEEA)withthisratingweresuppliedmaterialservicesbytheNomuraGroup

2%havebeenassignedaReduceratingwhich,forpurposesofmandatorydisclosures,areclassifiedasaSellrating;3%ofcompanieswiththisratingareinvestmentbankingclientsoftheNomuraGroup*.0%ofcompanies(whichareadmittedtotradingonaregulatedmarketintheEEA)

withthisratingweresuppliedmaterialservicesbytheNomuraGroup.Asat31December2024.

*TheNomuraGroupasdefinedintheDisclaimersectionattheendofthisreport.**AsdefinedbytheEUMarketAbuseRegulation

DefinitionofNomuraGroup'sequityresearchratingsystemandsectors

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additionalinformationfromNomurarelatingtosuchsecuritiesand/orcompanies.Benchmarksareasfollows:UnitedStates/Europe/Asiaex-Japan:pleaseseevaluationmethodologiesforexplanationsofrelevantbenchmarksforstocks,whichcanbeaccessedat:

/research/m/Disclosures

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