While it hopes to secure its own trade deal with the US before long, Japan risks getting caught in the crossfire of other US trade disputes. The prospect of a 25% tariff on all goods imported from Mexico to the US by October is a potentially significant downside risk to Japanese carmakers, and hence Japanese equity markets. As if this wasn’t enough, China has been dropping strong hints that it may restrict its rare earth exports, three-quarters of which go to Japan.
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