Govt ‘should push back’ if US takes ‘wrong’ policies

TOKYO: Japan should push back if President Donald Trump bases trade and other economic policy on “wrong economics”, an adviser to Prime Minister Shinzo Abe said in an unusually direct expression of concern about potential protectionism.

Koichi Hamada, emeritus professor of economics at Yale University and cabinet adviser, also said Mr Abe could relax his timetable for balancing the budget in the next four years and should be ready to further delay a planned sales-tax hike to ensure economic growth.

Threats by Mr Trump to impose a “border tax” on imports and take other protectionist measures have raised uncertainties about global trade.

“There is some danger if he bases his decisions on wrong economics without listening to good advisers, and if he thinks that he could manage national economic matters as he does his real-estate company,” Mr Hamada said in an interview on Thursday.

“If the United States were to be led by a near-autocrat and if Japan cooperates just to please him, that would break the whole world system,” he said.

And if Mr Trump should criticise Japan for not going along, Mr Hamada said Tokyo should respond: “You’re wrong. Please heed the views of your own experts.”

Officials and executives in export powerhouse Japan have been privately concerned about Mr Trump’s policies, but have largely been muted in public.

The government has set out to show Mr Trump’s camp that Japanese companies create many US jobs, while defending Toyota Motor Corp — the target of one Trump tweet — as a good “corporate citizen” of the United States.

On Japan’s economy, Mr Hamada stressed growth over austerity, even as Mr Abe struggles to curb the industrial world’s heaviest government debt burden.

The prime minister has promised to achieve a budget surplus, excluding interest payments on debt, in the fiscal year to March 2021, a commitment Finance Minister Taro Aso reiterated yesterday.

“There is no need for Japan to follow such a strict timeframe,” Mr Hamada said.

“Under the changing world situation, it’s good for the world too if the Japanese live an affluent life and buy goods from abroad, instead of just attaining the government balance.”