The US midterm elections have dealt the Trump administration a result widely described as a heavy defeat. For the manufacturing heartland of central Japan, the question is whether the tariffs that hit its exporters will now change. They are unlikely to, according to one expert.
Shinya Kato, a professor at Meijo University in Nagoya, said the Democrats' gains do not mean the tariffs on automobiles will come down. "There is no talk of the Democrats lowering them either, as a strategic tariff," he said. "Just because the Democrats took a majority does not mean the auto tariff will fall."
Kato said Trump could concede on general tariffs if he turns to tackling inflation at home. Auto tariffs, which are treated as a separate measure, are a different matter.
Inflation and the yen
Asked why voters turned against the administration, Kato pointed to prices. Trump's tax cuts were meant to lift the economy but instead helped push inflation higher, he said.
He also expects the result to narrow the interest rate gap between Japan and the United States, possibly moving the yen from weak to strong. With the Bank of Japan signaling it will raise rates, the election result is expected to ease upward pressure on US rates, making the yen more attractive to buy.
A stronger yen would make imports cheaper and push prices down across Japan. In the Tokai region, where manufacturing dominates, the effect is mixed: exports from Japan become more expensive, risking weaker sales in the US.
No change at the top
Kato said the election would not reshape much while Trump remains in office. "Unless the president is replaced, the world will not change greatly," he said.
That points to the breadth of presidential power. With two years left in his term, what Trump does with the remainder will be watched closely around the world.