The uncertainty created by the latest round of US tariffs could make the UK a more attractive base for Japanese businesses, according to audit, tax and business advisory firm Blick Rothenberg. The US implemented new tariffs under Section 301 of the Trade Act effective July 24, set at 12.5 percent on imports from Japan.
Yusuke Takanishi, a partner at the firm, said: “Following the re-introduction of US tariffs, the long-term and stable investment relationship between the UK and Japan is likely to be even more important in the coming years.”
He added: “The new US tariffs apply to many major trading partners, including Japan, under a different legal and policy framework from previous trade measures. This is despite the fact that Japan has worked hard to strengthen economic ties with the United States in recent years. Japanese companies have expanded production facilities, invested in infrastructure, strengthened supply chains and created jobs across the US.”
Takanishi said: “Recent US actions suggest that the relationship between investment and trade policy may not be as straightforward as businesses would hope. Even when economic cooperation is deep and long-term, companies may still find themselves receiving new tariffs introduced through a different policy channel.”
UK goods are also subject to US duties. The US International Trade Commission estimates that US consumers paid $1.36bn in tariffs on British exports in the four months last year, six times the amount for the same period in 2024.
The deals put forward after a Downing Street summit with Japanese prime minister Sanae Takaichi are expected to deliver more than £18bn in economic benefits, including up to £9bn for UK offshore wind farms.
Takanishi said: “With this background, the development in the UK deserves the attention of Japanese businesses. The new Prime Minister Andy Burnham has set an agenda focused on revitalizing Britain’s industries, investing in infrastructure, strengthening the regional economy and developing a long-term growth strategy. Although the details will emerge over time, the direction of travel seems to be aimed at rebuilding industrial conditions and investing for the long term.”
Burnham, who took office on July 20, was mayor of Greater Manchester, where Japanese investors pump about £118m into the city region a year.
He added: “For Japanese companies operating in the UK, and for UK businesses interested in Japan, this creates an interesting contrast. At a time when global trade relations are becoming more complex and unpredictable, the UK-Japan relationship remains focused on long-term investment, deep commercial relationships and mutual trust. So the conversation goes beyond simple market access. Increasingly, businesses are asking where they can make investment decisions with confidence over the years five or ten.”
Takanishi said: “From the perspective of accounting, tax and legal compliance, Japanese businesses therefore have to look beyond the existing cost impact. Supply chain structures, transfer pricing policies, custom systems, management structures and compliance related to Environment, Social, and Governance (ESG) all need to be reviewed taking into account my experience, global discussions about acquiring global teams. low-cost environment and more about building resilience and forecasting in business models.”
He said Japan’s trade data in May showed the foreign sector improving, but not in a broad way, the growth in the value of exports remained small and part of the development was driven by currency and price effects rather than basic demand.
He added: “June’s figures are strong. Japan’s exports rose 19.3% year-on-year, supported by semiconductor-related demand and AI investment, while imports rose 25.4%, driven in part by higher energy costs and a weaker yen. Trade policy.”
The increase in June, published in the Treasury’s trade statistics, was the fastest for both imports and exports since November 2022.
Takanishi said: “The Bank of Japan’s latest Regional Economic Report broadly supports this balanced view.” All 9 regions were assessed as recovering or showing moderate improvement, indicating continued strength but not necessarily economic acceleration.”
The report, published on 9 July, left the Bank’s assessment unchanged in all nine regions.
