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Japan firms must prepare for Trump tariff fallout, Suntory chief says in Davos
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Japan firms must prepare for Trump tariff fallout, Suntory chief says in Davos
Jan 22, 2025 4:51 AM

DAVOS, Switzerland (Reuters) - Japanese companies remain bullish about investing in the United States but need to prepare for supply chain shocks that could arise during Donald Trump's presidency, the chief executive of drinks giant Suntory Holdings said on Wednesday.

Takeshi Niinami, who also heads one of Japan's biggest business lobbies, said on the sidelines of the World Economic Forum's (WEF) Davos meeting that it is important for firms to show that their investments will create jobs in the U.S..

A survey last week showed that most Japanese firms operating in the United States are bracing for new tariffs.

"Tariff imposing by the Trump administration would create huge, unexpected changes in the supply chain landscape," Niinami told the Reuters Global Markets Forum.

"Japanese companies have to be agile to respond to any change," he added.

Japan maintains a sizable trade surplus with the U.S., a sore point for Trump, but that friction may ease as the Asian nation bulks up its military through purchases of American-made weapons, he said.

Niinami, 65, is one of Japan's most influential executives, serving as chair of the Keizai Doyukai business lobby and as an economic adviser to former prime ministers.

In 2014, he became the first non-founding family member to lead century-old Suntory, engineering a $16 billion takeover of U.S. spirits maker Beam that year. He will cede the role of president to Nobuhiro Torii, the great-grandson of Suntory's founder, in March while remaining CEO.

Niinami held out hope that Nippon Steel's ( NISTF ) $14.9 billion bid for U.S. Steel could be revived after the deal was blocked by then President Joe Biden earlier this month.

Nippon Steel ( NISTF ) has sued to overturn Biden's decision. If the Japanese firm can make the case that the companies would be stronger together against China and can revitalise U.S. industry, that may sway the case, Niinami said.

As for his own company, Suntory is reconsidering investments in China due to a lack of positive signs in the market, but it is eager to grow in India through local partnerships and manufacturing.

"We want to be somebody in India," he said.

(Join GMF, a chat room hosted on LSEG Messenger, for live interviews: https://lseg.group/4ajdDTy)

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