Strategy to “soften” the impact of tariffs

As the Trump administration shifts tariffs from a country-by-country model to a sector-by-sector model, Japanese corporations are deploying a variety of solutions to “soften” the impact, from acquiring assets, shifting production, to stockpiling goods in the US.

Sumitomo launches first “wood industrial complex” in the US. Photo: woodworkingnetwork

The overall goal is to maintain market share, reduce costs arising from tariffs, and strengthen bilateral economic relations amid rising trade tensions. According to Nikkei Asia, one typical example is Sumitomo Forestry Co.. In July 2025, the company completed the acquisition of Teal Jones Louisiana Holdings (TJLH) for about $29 million, through its subsidiary Sumitomo Forestry America.

The deal not only gives Sumitomo direct control of its wood supply chain in the US, but also paves the way for the construction of a timber industrial complex in Louisiana. This will be a facility for the production of recycled wood from waste, reducing dependence on imports and avoiding tariffs on wood products imported from Japan. Analysts say this model helps Sumitomo proactively adapt to fluctuations in raw material prices, labor shortages and tax policies, while also creating an image of sustainable development.

Similarly, the auto industry, a key area in US-Japan trade relations, has also been quick to adjust. Honda Motor has decided to move production of the Civic Hybrid from its Saitama, Japan, plant to its Indiana, USA, plant starting in mid-2025.

According to The Straits Times, the move helps Honda avoid the 25% tariff that Washington plans to impose on imported cars. The US tariffs have cost Honda more than $800 million as of June 2025.

Not only Honda, Japan Display - a supplier of LCD screens for cars, is also considering setting up production lines in the US to maintain competitiveness when import tariffs can increase product prices. These are steps showing the trend of shifting production to the US to "soften" the impact of tariffs.

In addition to investment strategies, many corporations have chosen a more short-term solution: stockpiling goods in the US. Sony has stepped up the construction of large warehouses to stockpile products, especially PlayStation and electronic devices, to ensure stable supply in case the new tariffs are applied. Suntory Holdings, a large Japanese beverage corporation, has also increased stockpiling and even adjusted its production strategy: moving some of its tequila from Mexico to the US to avoid the 25% tax and considering expanding the European market for Scotch products. According to StreetInsider's assessment, this stockpiling measure cannot replace a long-term strategy, but in the short term, it has helped Japanese companies maintain the flow of goods and stabilize market share.

According to The Wall Street Journal, in a broader view, this is a picture of “risk sharing” between businesses and the Japanese government . Tokyo has proactively promoted bilateral economic cooperation, encouraged businesses to increase investment in the US, and expanded imports from the US to balance trade. This shift is not only a response, but also seen as a long-term strategy to strengthen Japan’s position in the US market, while maintaining its commitment to sustainable development goals and stable supply chains.

Observers say these moves show that Japanese businesses are not choosing to “confront” tariff barriers, but are flexibly adapting with multiple layers of solutions. From Sumitomo Forestry’s acquisition of a timber factory, Honda’s shift to Civic Hybrid production, to Sony and Suntory’s stockpiling of goods, all are aimed at ensuring a “soft landing” for the supply chain and protecting long-term interests.

HAPPY CHI

Source: https://www.sggp.org.vn/chien-luoc-giam-mem-tac-dong-thue-quan-post810908.html