S&P Global: Trump's Tariffs to Dampen Performance of Japanese Companies

According to S&P Global Ratings analysts, the announcement by elected U.S. President Donald Trump that he will impose higher tariffs on imports to the U.S. will negatively impact the performance of Japanese companies. Analyst Makiko Yoshimura stated that many Japanese companies rely on exports to the U.S. and that tariffs directed at Japan will reduce exporters' profits. "Under a universal tariff scenario, Japanese companies will either have to pass on higher costs to product prices or absorb these costs by reducing expenses elsewhere," Yoshimura noted, adding that "it will be challenging to do both." However, S&P expects earnings to remain stable through 2025, but it will become increasingly important to have financial buffers to withstand any deterioration in earnings in order to maintain credit quality.