- The Great East Japan Earthquake
- Spring Labor-Management Wage Negotiations
- Trump's Tariffs
- Choice of Separate Surnames for Married Couples
- Expo 2025 Osaka, Kansai, Japan
The Great East Japan Earthquake
(In response to a question regarding the upcoming 14th anniversary of the Great East Japan Earthquake on March 11) Fourteen years have not erased the impact this disaster dealt to the mental and physical health of the victims. In the affected areas, the physical scars left by this disaster remain extensive, and the work to remove debris from the damaged Fukushima nuclear power plant will be a long-term undertaking. However, precisely because this recovery work is going to take many years, Japan must not ease up in its efforts. Keidanren will continue to provide sympathetic assistance to the people in the affected areas, including promotional support for the consumption of local Tohoku goods.
Japan's climate has become increasingly subtropical, and as a result, its natural disasters have become more frequent and severe. A natural disaster of a given intensity can be far more devastating in districts with relatively fragile social infrastructure. For that reason, it is imperative that Japan conduct a comprehensive inspection of its existing social infrastructure. That is presumably the point behind the government's decision to create a new disaster management agency. And, in that respect, there are many lessons that should be learned from the Great East Japan Earthquake.
Spring Labor-Management Wage Negotiations
(In response to a question regarding current developments surrounding this year's spring labor-management wage negotiations in the lead-up to March 12, when many corporations will submit their wage offers together) Keidanren this year has been calling on companies to consider including increases in their base salaries in recognition of the recent uptick in inflation. In response, some companies have been early to announce large base salary increases. Labor unions affiliated with the Japanese Trade Union Confederation (RENGO) have sought an average wage increase topping 6%, the largest hike in 32 years. Along with other developments, that seems like a sign the recent strong momentum in wage growth is beginning to take lasting root.
On March 12, large firms primarily in the manufacturing industry will submit their spring wage offers together. Following that, the results will come out for the key focus of the spring wage negotiations this year, namely, the wage hikes among small and medium-sized enterprises and for fixed-term employees. We will then need to assess the hard numbers and other specifics while also taking these developments into account.
(In response to a question seeking the Chairman's take on the finding that real wages in January fell from a year earlier for the first time in three months, as noted in the report of the Monthly Labour Survey released by the Ministry of Health, Labour and Welfare) Soaring consumer expenditures for leaf vegetables, and other perishable goods as well as rice, eggs, and other foods are driving up the inflation rate and likely having a major impact on ordinary households and food service establishments. Keidanren is doing its best to encourage wage hikes, but its call on the business community to raise wages enough to stay ahead of inflation is based on the assumption of an appropriate inflation rate of around 2%, as targeted by the government and the Bank of Japan. The inflation rate (used to calculate real wages in the Monthly Labour Survey) climbed substantially above 2% in January, highlighting the need to continue monitoring price trends.
Trump's Tariffs
(In response to a question seeking the Chairman's take on the announcement by US President Trump that he would delay for one month the implementation of a 25% tariff measure on imported goods that fall under the United States-Mexico-Canada Agreement [USMCA]) Inflows of immigrants and illegal drugs from Mexico and Canada were cited as the rationale for President Trump's decision to impose tariffs on imported goods from those two nations despite the existence of the USMCA. However, in certain respects, it is not entirely clear to me how that rationale is consistent with the decision to delay the implementation of tariffs by one month. Moreover, one could also question whether tariffs are a valid means of achieving the goal of stemming the flow of immigrants and illegal drugs in the first place.
(In response to a question regarding the impact if tariffs are imposed on steel, aluminum, and automobiles) The impact on Japanese companies from tariffs on steel and aluminum should not be that significant, given that exports to the US account for only a small fraction of Japan's total exports of steel and aluminum worldwide. However, one matter of concern is that prices for US manufactured goods that utilize steel and aluminum will climb in tandem with the price increases for imports of those materials. Regarding the automotive sector, many Japanese companies export automobiles to the US directly from Japan as well as from both Mexico and Canada, two nations where they have set up manufacturing operations under terms of the USMCA. Given these considerations, the tariffs on automobiles will have a huge impact on Japanese firms.
Furthermore, from a business perspective, the biggest issue will be the decline in predictability. Companies will likely become more hesitant about investing if they suffer a weakened ability to foresee future trends. Our hope is that a superpower like the US will work to build a dependable, worry-free environment for trade and investment.
(In response to a question concerning the planned meeting between Japanese Minister of Economy, Trade and Industry Yoji Muto and US Secretary of Commerce Howard Lutnick) Minister Muto has assumed an extremely important role, and he has my respect. Japan has made enormous contributions to the US. Its balance of direct investment in the US stands at $800 billion, and it has created approx. one million US jobs. I anticipate Minister Muto will endeavor to persuade his counterparts that the US and Japan have a win-win relationship in the field of trade and engage in negotiations that exempt Japan from the current round of tariff measures.
Choice of Separate Surnames for Married Couples
(In response to a question regarding the controversy over adoption of a system allowing separate surnames for married couples) One problem is the lack of adequate discussion to date on this matter as an issue of values. This is something that should be settled through public debate. In that respect, it is good that the Liberal Democratic Party has been energetically engaged in deliberations on this issue through various channels, including its Working Team on the family name system (chair: Ichiro Aisawa, Lower House), and I welcome that development. Also, as another sign of the shift toward public debate, at the recent Liberal Democratic Party convention (held on March 9), Tomoko Yoshino, president of the Japanese Trade Union Confederation (RENGO), stressed the need to introduce a dual surname system for married couples.
As Vice Chair of the Board of Councillors Masahiko Uotani stated at the March 6 meeting of the Working Team, Keidanren believes the best option is the proposal presented at the Justice Ministry's Legislative Council meeting in 1996, which included the introduction of a dual surname system for married couples. Although that proposal would require that children's surnames be decided at the time couples marry, there are various other ideas regarding how children's surnames should be settled. In any event, I want to see the debate on this matter move forward more quickly.
Expo 2025 Osaka, Kansai, Japan
(In response to a question regarding the announcement by Expo 2025 ambassador Masatoshi Hamada, of the Downtown comedy duo, that he was taking a temporary leave) I can't comment on that. I feel that an atmosphere of excitement is building, as the Expo's content has already been finalized, its publicity and advertising activities are heating up, and advance ticket sales are booming. I anticipate Mr. Hamada's temporary hiatus will not have a serious impact.