Just the facts; Japan seeks way out of Trump’s bad books on trade

TOKYO (Reuters): Armed with fact sheets on jobs created and investments made in America, Japan aims to give Donald Trump a crash course on its contribution to the US economy in hopes of persuading him that Tokyo is different from Trump’s favourite trade target, China.

Tokyo wants Trump, who will become president next week, to see the merits of global trade, rethink his threats to impose a “border tax” on imports, and to stick to international trade deals on which Japan Inc bases its investment strategies.

And while Japan’s economy still relies heavily on exports for growth, its officials also want to alter any lingering image Trump may have formed based on trade wars fought with the United States decades ago. “Japan is preparing so that soon after the change in administration, we can ... explain our points in a format persuasive to the American side,” Masahiko Shibayama, an advisor to Prime Minister Shinzo Abe, told Reuters.

“Japan is a country that lives by diplomacy and trade.”

To make their case with hard numbers, Japan’s government has prepared a briefing paper its officials are using in talks with US counterparts. The document, seen by Reuters, has not been released, and sources would not say if it had been shown to Trump or senior members of his team.

Highlights included:

• 839,000 jobs created by Japanese companies jobs in the United States, second only to Britain and above the 38,000 employed by Chinese businesses.
• Cumulative Japanese investment of $411 billion, dwarfing China’s $15 billion.
• Japan’s shrinking share of the US trade deficit to 9% from more than half in the early 1990s versus China’s opposite trend.

Trump last week added Toyota Motor Corp to the list of multinational corporations he’s threatened with a “big border tax” if they expand factories abroad to export into the United States.

Trump repeated that threat on Wednesday in his first news conference since winning the Nov. 8 election.

Japan is not China

He also lumped Japan with China and Mexico as big contributors to America’s trade deficit – a perception that Japanese officials are desperate to correct.

“We need to start pointing out very clearly the difference with China,” a senior Japanese diplomat with trade negotiating experience told Reuters.

Officials in Tokyo also stressed that what Trump says before taking office next Friday and what he does after that may be different.

They also hope some members of his economic team, such as his choice for commerce secretary, billionaire investor Wilbur Ross, who has done business in Japan, will temper his harsher views on trade.

Tokyo is keen to erase any lingering legacy of US-Japan trade wars fought in autos, steel and semiconductors in the 1980s and early 1990s.

Trump’s pick for US trade representative, Robert Lighthizer, was deputy US trade representative under Ronald Reagan and took part in some of those trade disputes.

Japanese companies, like other multinationals, are also getting into the public relations act.

Toyota’s North America Chief Executive Jim Lentz said on Monday that Toyota would invest $10 billion in the United States over the next five years, but said the decision was not a response to Trump’s criticism of the automaker’s plans to shift some production to Mexico from Canada.

Japanese officials hope lobbying members of US Congress and other politicians in regions where Japanese firms employ large numbers of Americans will help temper Trump’s policies.

On Tuesday, Toyota President Akio Toyoda met US Vice President-elect Mike Pence, the former governor of Indiana, a state where – according to the fact sheet – Japanese firms employed 47,400 people as of 2014.

Still, some fear the Trump administration will have to learn the hard way by seeing the damage done to the US economy from disruptions to a global supply chain.

“It may take time for them to learn the lesson and it may have to be learned the hard way,” the senior diplomat said.