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Yahoo
23 minutes ago
- Yahoo
Japan's sticky problem with Trump, tariffs and rice
Donald Trump's insistence that "spoiled" Japan imports more US rice is adding to Prime Minister Shigeru Ishiba's problems ahead of elections that could sink his premiership after less than a year in office. Japan is one of more than 20 countries receiving letters this week from the US president warning of "reciprocal" tariffs from August 1 failing a trade agreement with Washington. The 25 percent across-the-board levy for Japan is separate from similar charges for cars, steel and aluminium that have already been imposed. Trump wants to get Japanese firms to manufacture more in the United States and for Tokyo to buy more US goods -- notably gas and oil, cars and rice -- to reduce the $70 billion trade deficit with the Asian powerhouse. "I have great respect for Japan, they won't take our RICE, and yet they have a massive rice shortage," Trump said on Truth Social on June 30. Rice, though, is small fry in the grand scheme of bilateral business between the countries. BMI Fitch Solutions said that it accounts for only 0.37 percent of US exports to Japan, and that even doubling that would have a "negligible" effect on overall trade. "(The) Trump administration seems more concerned with the optics of striking deals than with meaningfully narrowing the US trade deficit," BMI said. For Japan, doubling imports could be swallowed if only the economic impact is considered. It could be well worth it if such a concession could reduce or even remove Trump's damaging 25 percent tariff on Japanese autos. - Lost majority - But the politics of rice are fraught for Ishiba, whose ruling coalition disastrously lost its majority in lower house elections in October. Upper house elections on July 20 could see a similar drubbing, which might prompt Ishiba to quit, 10 months after taking the helm of the long-dominant but unloved Liberal Democratic Party (LDP). Rice Japan holds a cherished place in Japanese national culture -- samurai reputedly used to be paid in it. Relying on imports -- currently almost all rice consumed is grown domestically -- would be seen by many as a national humiliation for the country of 124 million people, and risky. "Culturally, and historically, the Japanese people are all about rice," Shinichi Katayama, the fourth-generation owner of 120-year-old Tokyo rice wholesaler Sumidaya, told AFP. "I personally welcome having an additional option for Japanese consumers. But I also feel the move (letting in lots of foreign rice) is too early from the standpoint of food security," he said. "If we become reliant on rice imports, we may face shortages again when something happens." While Japan already imports rice from the United States, many consumers see foreign, long-grain varieties as being of dubious quality and lacking the requisite stickiness of the homegrown short-grain rice. Bad memories linger from when Japan suffered a cold summer in 1993 and had to import large volumes of the grain from Thailand. American rice "tastes awful. It lacks stickiness", said Sueo Matsumoto, 69, who helps families where children have hearing difficulties. "If they (the Americans) want to export to Japan, they must work at it. They must think about consumer preference," he told AFP in Tokyo. - No sacrifice - As a result, Ishiba's government has been at pains to say it won't bend on the issue -- although this may change after the election. "We have no intention of sacrificing agriculture in future negotiations," Chief Cabinet Secretary Yoshimasa Hayashi said recently. "Ishiba is walking a narrow plank, wary of provoking powerful domestic lobbies like rice farmers, while juggling an approval rating that would make aggressive trade moves politically perilous," said Stephen Innes at SPI Asset Management. The government has already been under fire for the recent skyrocketing of rice prices, which have roughly doubled in 12 months. Factors include a very hot summer in 2023, panic-buying after a warning of an imminent "megaquake" in 2024, alleged hoarding by some traders, and a surge in rice-hungry tourists. To help ease the pain, Tokyo is tapping emergency stockpiles, and imports have risen sharply -- led by rice from California -- but these are still tiny compared with domestic production. "All these problems with rice prices show the LDP's agriculture policy has failed," retiree Yasunari Wakasa, 77, told AFP. hih-oh-stu/dan
Yahoo
24 minutes ago
- Yahoo
China automakers' price war, overcapacity hurt finances
(Reuters) -China's auto sector is reeling from overcapacity and an extended price war, raising alarm among regulators and industry executives who warn the turmoil is undermining the sector's long-term viability. China's top leaders have pledged to step up regulation of aggressive price-cutting and support the orderly phasing out of outdated production capacity, state media reported earlier this month. LSEG data for 33 listed automakers headquartered in China show a broad deterioration in key financial metrics over the past six years, highlighting the impact of a brutal price war that began in 2023. Data showed that the average time carmakers took to pay their suppliers and other short-term creditors widened to 108 days in 2024 from 99 days in 2019. On June 1, new regulation kicked in, requiring large companies to settle payments within 60 days of receiving goods, engineering services or materials. Joerg Wuttke, Washington-based partner at DGA-Albright Stonebridge Group, said that European and German suppliers generally paid suppliers within 40 to 50 days. "That (new regulation) is going to enforce a more level playing field and basically stop these automakers from turning their suppliers into bankers," he said. Among major brands, top electric vehicle seller BYD took an average of 127 days to pay suppliers and other short-term creditors in 2024, up from 81 days in 2019, the LSEG data showed. When asked about the data, BYD said its average payment period to suppliers that covered both accounts payable and notes payable dropped to 127 days by 2024 from 139 days in 2019. Geely Automobile's payment period also rose to 193 days in 2024 from 139 days in 2019, according to LSEG data. Geely declined to comment. Bucking the trend, Great Wall Motor Co shortened its payment cycle to 94 days in 2024 from 115 days in 2019. The company did not respond to a Reuters request for comment. The sector's combined inventory levels more than doubled to 370 billion yuan ($51.55 billion) in 2024 from 2019, even as dealers complained of many firms dumping cars on them to meet high sales targets. Total debt among carmakers surged 56% to 959 billion yuan last year from 2019's level. The median debt-to-equity ratio climbed by 21 percentage points to 51.3%. The sector's median net profit margin fell to just 0.83% in 2024 from 2.7% in 2019. BYD, however, boosted its profit margin to 5.4% from 1.7% in 2019. The company, which makes cars and mobile phone components, attributed the improvement to a change in its business mix as the contribution of automotive-related revenue as a share of total revenue grew from 49.5% to 79.4% over the period. Nio Inc and Xpeng Inc, two of China's best-known EV brands, had among the longest payment periods among the 33 firms. The two companies stretched their payment periods to suppliers and other short-term creditors to 223 days and 237 days, respectively. Both companies continued to remain in the red, although both improved their negative margins sharply over the period. Nio said it would commit to paying suppliers within 60 days. Xpeng said its cash liquidity continued to improve and referred to comments its CEO He Xiaopeng made last Thursday at a media event that the company would also, like other firms, endeavour to meet a commitment to pay suppliers within 60 days as soon as possible. ($1 = 7.1769 Chinese yuan renminbi) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNN
30 minutes ago
- CNN
Grief flows along river, click to cancel, worm warfare: Catch up on the day's stories
👋 Welcome to 5 Things PM! Canceling your gym membership in the US probably won't get easier anytime soon. An appeals court blocked a rule that would have required businesses to make it as easy for people to end their subscriptions and memberships as it is to sign up. Here's what else you might have missed during your busy day. For generations, the beloved Guadalupe River has been a haven of adventure and joy in the heart of Texas. After this week's catastrophic flooding, surrounding communities are trying to pick up the pieces, and the river has become a source of grief with an uncertain future. Linda Yaccarino is stepping down as CEO after two years leading Elon Musk's social media company. Her rocky tenure was marked by several public relations crises and challenges from new competitors, including Bluesky and Threads. Two trends have emerged at the Supreme Court in recent weeks: President Donald Trump is on a winning streak, and Ketanji Brown Jackson — the junior-most justice — is having none of it. She has emerged as the court's leading dissenter. It's looking increasingly likely that any sale of TikTok will require people in the US to download a new app, which may launch in a matter of weeks. That could mean an almost entirely different experience for 170 million American users. Hundreds of millions of flies dropping from planes in the sky sounds like a nightmare. But experts say that could be the livestock industry's best defense against a flesh-eating threat poised to invade the southwestern US. GET '5 THINGS' IN YOUR INBOX If your day doesn't start until you're up to speed on the latest headlines, then let us introduce you to your new favorite morning fix. Sign up here for the '5 Things' newsletter. 🗑️ Gobs of garbage: Drone footage shows piles of trash overflowing into Philadelphia's streets after thousands of workers went on strike July 1 seeking better pay and benefits. The city and the employees just reached a deal. Trump threatens 50% tariffs on Brazil if it doesn't stop the Bolsonaro 'witch hunt' trial HHS abruptly calls off meeting of expert panel on preventive care, raising questions about its future Why an obscure provision in Trump's big agenda bill has gamblers crying foul 💄 Stunning transformations: From Madonna to Jack Nicholson, performance artist Alexis Stone attends Paris Fashion Week impersonating some of the world's most famous celebrities. CNN got a glimpse behind the making of his latest look. 💰 That is Nvidia's market value, beating out Apple and Microsoft to become the first publicly traded company to reach that milestone. 🏛️ The Trump administration just sued which state over a law allowing transgender students to play on sports teams of their choice?A. CaliforniaB. New YorkC. PennsylvaniaD. Illinois⬇️ Scroll down for the answer. 🏎️ F1 shakeup: Red Bull team principal Christian Horner has been fired after 20 years. The team enjoyed tremendous success under his leadership, but recent controversies had led to questions about Horner's future. ❤️ Love across the Pacific: When Andrew and Shallen first met on a summer day in Yellowstone, it was a mix of love at first sight and stranger danger. But with the help of poor Mandarin, scheduled video calls and a night of peach cobbler, a modern romance was born. 👋 We'll see you tomorrow.🧠 Quiz answer: A. The lawsuit alleges that a California law violates Title IX, the federal law that prohibits sex-based discrimination at schools that receive federal aid.📧 Check out all of CNN's newsletters. Today's edition of 5 Things PM was edited and produced by CNN's Kimberly Richardson, Sarah Hutter and Chris Good.
