Markets (Page 11)

The “Liberation Day” tariffs announced by US president Donald Trump have one thing in common – they are being applied to goods only.

Trade in services between the US and its partners is not affected. This is the perfect example of Trump’s peculiar focus on trade in goods and, by extension, his nostalgic but outdated obsession with manufacturing.

The fallout from Liberation Day continues, with markets down around the world. The decision to apply tariffs on a country-by-country basis means that rules about where a product is deemed to come from are now of central importance.

The stakes for getting it wrong could be high. Trump has threatened that anyone seeking to avoid tariffs by shifting the supposed origin of a product to a country with lower rates could face a ten-year jail term.

The White House initially refused to specify how it came up with the tariff levels. But it appears that each country’s rate was arrived at by taking the US goods trade deficit with that country, dividing it by the value of that country’s goods exports to the US and then halving it, with 10% set as the minimum.

It has been noted that this is effectively the approach suggested by AI platforms like ChatGPT, Claude and Grok when asked how to create “an even playing field.”

Economically, Trump’s fixation on goods makes no sense. This view is not unique to the president (though he feels it unusually strongly). There is a broader fetishization of manufacturing in many countries. One theory is that it is potentially ingrained in human thinking by pre-historic experiences of finding food, fuel and shelter dominating all other activities.

But for Trump, the thinking is likely related to a combination of nostalgia for a bygone (somewhat imagined) age of manufacturing and concern over the loss of quality jobs that provide a solid standard of living for blue-collar workers – a core part of his political base.

Nostalgia is not a sensible basis for forming economic policy. But the role emotions play in international affairs has been receiving more attention. It has been identified as an “emotional turn” (where the importance of emotion is recognised) in the discipline of international relations.

Of course, that’s not to say that the concern over jobs and the unequal effects of globalzsation is misplaced. It is clear that blue-collar workers have suffered in the US (and elsewhere) for the last 40 to 50 years, with governments paying little attention to the decline.

Data on weekly earnings in the US split by educational level show that wages for those without a degree have declined or stagnated since around 1973, particularly among men. This is the cohort that disproportionately voted for Trump. Globalization has created many benefits, not least to the United States, but these tend to be concentrated among the better educated.

All too often, the service-sector jobs that have filled the gap left by declining manufacturing have been precarious. That means low wages, low security, lack of union representation and few opportunities for moving up the ladder. It is unsurprising that there has been a backlash.

Can’t turn back the clock

So will Trump’s tariffs plan address this? The great tragedy is that there is little reason to think that they will.

The loss of manufacturing jobs is partly about globalisation, which Trump is seeking to reverse. But research shows that trade and globalisation are often more of a scapegoat than a driving force, responsible for only a small chunk of job losses (typically said to be about 10%).

The main cause of manufacturing’s decline is rising productivity. Today it simply requires fewer people to make goods due to the relentless increase in automation and the associated rise in how much each worker produces.

If the whole US trade deficit were rebalanced through expanding domestic industries, this would increase the share of manufacturing employment within the US by about one percentage point, from about 8% today to 9% according to US Bureau of Labor Statistics figures. This is not going to be transformative.

The effects of tariffs are also double-edged. They will probably shift some manufacturing back to the US – but this could be self-defeating. More US steel production is good for workers, but the higher cost of US steel feeds through to higher prices for the products manufactured with it.

This includes the cars Trump obsesses about. Less competitive prices means lower exports and a loss of jobs.

The 1950s were a unique time. By the end of the Second World War, the US was a manufacturing powerhouse, accounting for one-third of the world’s exports while taking only around a tenth of its imports.

There were few other industrialised countries at the time, and these had been flattened by the war. The US alone had avoided this, creating a world of massive demand for US exports since nowhere else had a significant manufacturing base. That was never going to last forever.

The other point about that time in history is that the economic system had been shaped by colonialism. European powers had used their position of power to prevent the rest of the world from industrialising. As those empires were dismantled and the shackles came off, those newly independent countries began their own processes of industrialization.

As for the US today, President Trump is mistaken if he really believes that tariffs will bring a new golden age of manufacturing. The world has changed.

James Scott is reader in international politics, King’s College London

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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The Japanese landscape is changing regarding Foreign movement. Toyo Keizai, a business magazine, recently covered the sensation of Taiwanese children joining in some of Tokyo’s best secondary schools.

The post series focused on Tokyo’s Bunkyo-ku, house to the University of Tokyo and some of the city’s top public schools, noting that the number of non-Japanese children living in the area has more than doubled since 2019. According to the post, Chinese made up half of the increase.

The number of Foreign residents living in Japan, which is on the rise, reached a record high of 873, 000 at the end of 2024 from 761, 600 in 2022, with a new perspective. &nbsp,

But much more important, the content of Chinese immigrants has changed dramatically over the past few years. Chinese render up 23 % of Japan’s 3.76 million international citizens, but they now make up a significant and growing portion.

Chinese workers now dominate the most highly skilled categories in the Japanese visa system, namely the” Management and Administration” ( 51.3 % in 2023, 50.3 % in 2022 ) and” Highly Qualified Professionals” ( 65.7 % in 2023, 63.9 % in 2022 ).

In contrast, there has been a steady decline in the number of Chinese citizens who are” Technical Trainee” card holders, which forbids the holder from bringing community members. More than 38, 000, or 43 % of the full, were the Chinese, who were the largest population of these employees as late as 2015, making up the majority of the full. However, by the previous year, the Chinese had dropped to fourth position, just making up 7.4 %. &nbsp,

It is no wonder that there is a corresponding increase in Chinese kids when you factor in the increase in the number of permanent people, scientific experts, and other types of long-term white-collar practitioners among Chinese people in Japan.

The Chinese are increasingly viewed as travellers, university students, and unskilled laborers who work in companies.

Foreign residents in Japan are extremely sharing the same physical spaces with “regular” Chinese people, competing for the same minimal resources such as high-quality pre-college knowledge instead of just spending money and then going home or concentrated on far-flung university campuses, farms, and factories.

Recipe for a backlash

It’s unlikely that the Chinese will like them even more because of the change in their composition in Japan. A survey survey results released in December 2024 revealed that 89 % of Japanese people have a negative outlook on China, which undoubtedly influences how they perceive the Chinese people they encounter there as well.

A quick look at the extensive coverage of China by Toyo Keizai, including those of Chinese immigrants in Japan, reveals that the majority of them are calling for the Chinese to leave and stop enriching themselves by stealing Japanese technology, despite the fact that it is statistically unrepresentative. &nbsp,

Such vitriol will only get worse with the zero-sum nature of education. The lack of elite education, as shown by the limited number of places available in Bunkyo-ku’s top elementary schools and the fierce admissions battles that face China because of their presence, which is thought to excite more deserving Japanese students, will increase grievances toward the Chinese.

The fact that the Chinese are looking for cheap public school spots rather than paying for private education that the majority of the Japanese population can’t afford will unavoidably sputter more nationalistic sentiments as Japan’s average real income continues to decline. &nbsp,

A number of factors that are beyond the control of both countries and their peoples will also contribute to the Chinese’s continued growth in population in Japan, at the risk of locals treating them with more hostility.

With Japan’s stricter visa laws and labor market conditions, Trump’s growing tendency to view Chinese STEM talent as a threat to national security will result in the displacement of many of them.

Additionally, Chinese companies’ increasing competitiveness has frequently come at the expense of Japanese pride, not to mention traditional automakers, as most recently demonstrated by its surge in electric vehicle exports. More of them will likely flood Japanese markets as the Trump tariffs create a barrier to Chinese goods.

Hedging hostility

Japan’s efforts to embrace multiculturalism in response to Japan’s long-standing issues of labor shortage, aging, and population decline are causing a problem because of the increasingly wealthy, competitive, and ubiquitous Chinese immigrants.

The government has made it clear that it intends to increase the number of highly skilled foreign workers over the coming years, but the nation may become less and less interested in having to compete for limited resources with these highly skilled workers, the majority of whom are Chinese.

The government has not yet shown a clear direction in juggling practical needs and hostile feelings. The government’s decision to begin issuing 10-year multiple-entry tourist visas to wealthy Chinese people in the late last year has sparked even more hostility toward them from Liberal Democrats, who are currently in power.

The government will need to first clarify its stance and formulate a concerted plan to address the public’s concerns while highlighting the positive contributions Chinese citizens are making to the nation for the Japanese to form more lucid opinions on the presence of China in their midst.

Although it would be unpalatable for any politician to speak out and defend the benefits of a greater foreign presence, especially from the Chinese, in a traditionally homogenous nation like Japan.

A lack of clarity among officials will only lead Japan down the same path as the West, where anti-immigrant rhetoric has risen on the assumption that the government has lost control over national borders, given the undeniable reality of an ever-increasing foreign population in the nation.

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