The implementation of tariffs by President Trump marks a significant shift in U.S. trade policy, with far-reaching implications for global markets and economic stability. The measures have introduced substantial economic uncertainty, prompting concerns about inflation, economic growth, and the potential for escalating trade conflicts between the USA and Europe. The scope of the tariffs will almost certainly reshape global trade risking long-term harm to global economic integration and international relations.
Giambrone & Partners commercial lawyers recognise that many businesses and investors will be re-thinking their commercial strategies to avoid the impact and repercussions related to the tariffs. Whilst it is not possible to switch trading partners overnight, reviewing the options as a matter of urgency will assist businesses to mitigate the tariffs policy.
Vincenzo Senatore, senior partner and highly experienced commercial lawyer qualified in several jurisdictions, commented "President Trump's sky-high tariffs have opened up awareness of opportunities in the Japanese market, regardless of his temporary back-peddling on his eye-watering tariffs. European and UK businesses thinking of considering the Japanese market have now gained an advantage related to market access in Japan, in that there will be no competition from the USA." Vincenzo further commented "the Japanese market is one of the largest globally and has a distinct advantages and is seen as a stable, low-volatility market, appealing during periods of global uncertainty. British and European businesses can leverage the business opportunities, which may off-set the effects of the tit for tat tariff war that President Trump has started."
Advantages of trading with Japan
Japan remains one of the world's most advanced and secure economies, offering a combination of economic strength, technological leadership and political stability.
The Japanese market remains vast. Japan is one of the world's largest exporters and one of the largest overseas investors. Economic growth is heavily dependent on exports. EU-Japan Economic Partnership Agreement (EPA) and the UK-Japan Economic Partnership Agreement (CEPA) factilitate bilateral trade between the UK and Japan is valued at approximately £27 billion. Over 1,000 Japanese companies operate in the UK, supporting around 160,000 jobs.
With the rift between the USA and a number of Asian countries, the British and European markets can step in and assume the trading position left vacant by the USA without the disadvantage of competition from the USA. Japan is seen as a stable, low-volatility market, appealing during periods of global uncertainty. In 2012 UK exports to Japan were worth over £9.4 billion and rising.
- Effective legal protection for contracts
- Very low level of dishonesty and exploitation
- High quality of standards
- Japan is a significant gateway to Asia
- A strong demand for European wines, cheeses and cars as well as fashion labels and cosmetics.
- High demand healthcare services and pharmaceuticals to address the ageing population.
Japan has advantageous trade agreements. It is a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The UK is also a member which enhances trade across the Pacific Rim.
Japan is also party to the EU–Japan Economic Partnership Agreement (EPA) and the UK–Japan Comprehensive Economic Partnership Agreement (CEPA) which provides tariff-free or reduced-tariff access and enhances market entry.
The UK has started to collaborate with Japan as part of the Government's Plan for Change.
"As a significant and growing trading partner, Japan's economy offers unique opportunities for UK firms looking to expand and internationalise. This delegation is an important next step in our relationship, enabling both governments to explore deeper collaboration across topics like digital and technology, advanced manufacturing, and sustainability." Louise Hellem, Chief Economist of the CBI (Confederation of British Industry)
The Foreign Secretary and Business and Trade Secretary visited Tokyo for an -inaugural UK-Japan Economic 2+2 Dialogue this month. The ministers were accompanied by a UK business delegation and met representatives of Japanese business and industry as well as UK companies active in Japan in order to support further partnerships between UK and Japanese businesses.
Giambrone & Partners has a desk in both Tokyo and Osaka through collaborations with Meilin International and Kikkawa Law and has recently won an award for Best law firm in Japan Both firms are recognised and reputable international law firms. Our commercial lawyers can assist organisations wishing to create collaborations with Japanese businesses, not only relating the legal issues they face but also with the cultural issues which are extremely important to observe. Every aspect of how the parties in a business negotiation conduct themselves is crucial. Respect is a key attribute.
- Seniority must be respected, always address individuals by their titles and their surname.
- Ensure that you build consensus within a group, decisions as decisions are collaborative and are unfrequently made by one person alone. This approach can be time consuming but when a decision is made it is rarely reneged on.
- A direct rejection, saying "no" should be avoided. Use enigmatic terminology such as "this could be difficult"
- Confrontational behaviour is often seen as rude and provocative. Staring directly, particularly to a senior person, is unacceptable.
- Business cards must be handed and received with both hands, the card should be read before putting it away carefully. Writing on it or treating a business card carelessly is considered disrespectful.
- Humour is not considered part of a serious business meeting
- Remember your manners, always thank the other party for their time or hospitality and follow up any commitments made.
- The standard greeting of bowing is often now supplanted by a handshake.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
