Japan

Latest story

150 Shares83 Views

A Japanese Village Wants Tourists to Come for Heat, Soot and Steel

by

This past October, I found myself in Yoshida Village standing before a tatara, a giant open-top furnace that was filled with charcoal and raging with such controlled ferocity that it could have been a set piece in Lucifer’s bedroom.Deep within the belly of those orange flames sat a growing and mangled ingot that contained some exceptionally high-quality steel called tamahagane, or jewel steel, from which Japanese swords have been made for much of the country’s history. The presence of a usable ingot seemed unlikely, and if true, downright alchemic. All we had been doing for the last 20 hours was gently shaking iron sand and fresh charcoal onto the flames at timed intervals.Yoshida is nestled back in the mountains of Shimane Prefecture in central Japan, abutting the ever-turbulent Sea of Japan. For nearly 700 years, workers around Yoshida made jewel steel in places called tatara-ba (literally “furnace spots”) on a grueling schedule — one that reshaped mountains and rivers, that seared the brows of generations of sooty men shoveling charcoal in loincloths. Then, at the start of the 20th century, production all but ceased. Other methods were cheaper and more efficient.Shimane Prefecture is perhaps best known for its Izumo Shrine, about an hour’s drive from Yoshida.At the height of its steel prowess, Yoshida swelled to nearly 15,000 people. Today, the population hovers around 1,500. As with many towns in the Japanese countryside, a mix of aging population, low birthrates and loss of industry has emptied its streets.Recently, though, in a Colonial Williamsburg sort of way, 24-hour re-enactments of the old iron-smelting traditions began to be performed in Yoshida. The firings are managed by a man named Yuji Inoue, who works for Tanabe Corp., which owns the furnace. “We consider the tatara a symbol and a pillar of town development,” he told me, standing next to the flickering furnace. Mr. Inoue and Tanabe Corp. were trying to remake Yoshida into a kind of tatara village, which he hoped would create self-sufficiency, expand the population and revitalize the town.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

More stories

  • 163 Shares169 Views

    in Economy

    Japan’s Labor Market Has a Lesson for the Fed: Women Can Surprise You

    by

    Japan’s improved labor force participation for women is a reminder not to assume that job market limits are clear and finite.Japan’s economy has rocketed into the headlines this year as inflation returns for the first time in decades, workers win wage gains and the Bank of Japan raises interest rates for the first time in 17 years.But there’s another, longer-running trend happening in the Japanese economy that could prove interesting for American policymakers: Female employment has been steadily rising.Working-age Japanese women have been joining the labor market for years, a trend that has continued strongly in recent months as a tight labor market prods companies to work to attract new employees.The jump in female participation has happened partly by design. Since about 2013, the Japanese government has tried to make both public policies and corporate culture more friendly to women in the work force. The goal was to attract a new source of talent at a time when the world’s fourth-largest economy faces an aging and shrinking labor market.“Where Japan did well over the recent decade is putting the care infrastructure in place for working parents,” Nobuko Kobayashi, a partner at EY-Parthenon in Japan, wrote in an email.Still, even some who were around when the “womenomics” policies were designed have been caught off guard by just how many Japanese women are now choosing to work thanks to the policy changes and to shifting social norms.Japanese Women Are Working in Greater NumbersThe share of women who are active in the job market has picked up sharply in Japan.

    .dw-chart-subhed {
    line-height: 1;
    margin-bottom: 6px;
    font-family: nyt-franklin;
    color: #121212;
    font-size: 15px;
    font-weight: 700;
    }

    Female labor force participation rate, ages 25-54
    Source: O.E.C.D.By The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 100 Shares139 Views

    in Economy

    U.S. Steel Acquisition Proposal Tests Biden’s Industrial Policy

    by

    The president is under pressure from Democrats and Republicans to block the sale to Japan’s Nippon Steel, which could upset a key foreign ally.U.S. Steel is an iconic example of the lost manufacturing muscle that President Biden says his economic policies will bring back to the United States.But last month, the storied-but-diminished company announced plans to be acquired by a Japanese competitor. That development has put Mr. Biden in an awkward bind as he tries to balance attempts to revitalize the nation’s industrial sector with his efforts to rebuild international alliances.Mr. Biden’s administration has expressed some discomfort with the deal and is reviewing the proposed $14.1 billion takeover bid by Japan’s Nippon Steel. The company is offering a hefty premium for U.S. Steel, which has struggled to compete against a flood of cheap foreign metal and has been weighing takeover offers for several months.The proposal has quickly become a high-profile example of the difficult political choices Mr. Biden faces in his zeal to revive American industry, one that could test the degree to which he is willing to flex presidential power in pursuit of what is arguably his primary economic goal: the creation and retention of high-paying union manufacturing jobs in the United States.Mr. Biden is under pressure from the United Steelworkers union and populist senators from both parties, including Democrats defending crucial swing seats in Ohio and Pennsylvania this fall, to nix the sale on national security grounds. The senators contend that domestically owned steel production is critical to U.S. manufacturing and supply chains. They have warned that a foreign owner could be more likely to move U.S. Steel jobs and production overseas.“This really should be a no-brainer,” Senator Josh Hawley, Republican of Missouri, said in an interview last week. “I don’t know why it would be difficult to say, my gosh, we’ve got to maintain steel production in this country, and particularly a company like this one, where you have thousands of workers in good union jobs.”U.S. Steel executives say the deal would benefit workers and give the merged companies “world-leading capabilities” in steel production. They announced last month that Nippon Steel had agreed to keep the company’s headquarters in Pittsburgh and to honor the four-year collective bargaining agreement that the steelworkers’ union ratified in December 2022.Other supporters of the takeover bid say blocking the sale risks angering a key American ally. Mr. Biden has courted Japanese collaboration on a wide range of issues, including efforts to counter Chinese manufacturing in clean energy and other emerging technologies, and welcomed Japanese investment in new American manufacturing facilities including for advanced batteries.Wilbur Ross, a former steel company executive who served as commerce secretary under President Donald J. Trump, wrote last week in The Wall Street Journal that there is “nothing in the deal from which the U.S. needs defending. Attacks by Washington pols only create unnecessary geopolitical tensions, and those, not the acquisition itself, could endanger American national security.”Adding to the cross-pressures on Mr. Biden: It is unclear what would happen to the 123-year-old U.S. Steel if the administration scuttles the deal and whether doing so would actually guarantee greater job security for the company’s nearly 15,000 North American employees.U.S. Steel executives say the deal with Nippon Steel would benefit workers, but skeptics of the deal are urging President Biden to review it to prevent lost steel production and jobs.Lawrence Bryant/ReutersU.S. Steel has faced challenges for decades because of intensifying foreign competition, particularly from China, which has flooded the global market with cheap, state-subsidized steel. American presidents have spent years trying to bolster and protect domestic steel makers through a mix of subsidies, import restrictions and so-called Buy America requirements for government purchases.“No U.S. industry has benefited more from protection than the steel industry,” Scott Lincicome, a trade policy expert at the libertarian Cato Institute think tank, wrote in a 2017 research paper.In recent years, presidents have increased those protections further. Mr. Trump imposed tariffs on imported steel, including from Japan. Mr. Biden has partially rolled back those levies in an attempt to rebuild alliances. Mr. Biden also included strict Buy America provisions in sweeping new laws to invest in infrastructure, clean energy and other advanced manufacturing.Those efforts have not come close to bringing back the levels of domestic steel production that the United States enjoyed in the 1970s — or even of recent decades. Raw steel production reached higher levels under Presidents Bill Clinton, George W. Bush and Barack Obama than it has under Mr. Biden or Mr. Trump.Employment in the industry fell steadily in the 1990s and mid-2000s. In 2022, there were just over 83,000 workers in iron and steel mills in the United States, which was less than half the number from 1992.Senators including Sherrod Brown of Ohio and Bob Casey of Pennsylvania, both Democrats, and Mr. Hawley and J.D. Vance of Ohio, both Republicans, urged Mr. Biden to review the proposed U.S. Steel sale to guard against lost steel production and jobs. Mr. Brown cited Nippon Steel’s failure to notify or consult with union leaders ahead of making its bid for the company.“Tens of thousands of Americans, including many Ohioans, rely on this industry for good-paying, middle-class jobs,” he wrote in a letter to Mr. Biden last month. “These workers deserve to work for a company that invests in its employees and not only honors their right to join a union, but respects and collaborates with its work force.”The calls for an administrative review of the deal largely focused on the Committee on Foreign Investment in the United States, which is known as CFIUS and headed by Janet L. Yellen, the Treasury secretary. The committee scrutinizes possible sales of American firms to foreign ones for possible national security threats, then issues recommendations to the president, who can suspend or block a deal.Shortly before Christmas, Mr. Biden appeared to grant the request for review, while stopping short of saying he would block it.Lael Brainard, who chairs the White House National Economic Council, said in a news release that Mr. Biden welcomed foreign investment in American manufacturing but “believes the purchase of this iconic American-owned company by a foreign entity — even one from a close ally — appears to deserve serious scrutiny in terms of its potential impact on national security and supply chain reliability.”The administration, Ms. Brainard said, “will be ready to look carefully at the findings of any such investigation and to act if appropriate.”Steelworkers cheered the move. David McCall, president of United Steelworkers International, said in a statement that Mr. Biden was “demonstrating once again the president’s unwavering commitment to domestic workers and industries.”Independent experts say it would be well within historical norms for the committee to evaluate the sale. That will likely include a detailed economic analysis of whether the deal could lead to diminished steel production capacity in the United States, said Emily Kilcrease, a CFIUS expert and senior fellow at the Center for a New American Security.But Ms. Kilcrease said that based on the committee’s past decisions, she expected the review to stop well short of a recommendation to kill the sale. Instead, she said, CFIUS might require an agreement from Nippon Steel to maintain certain levels of U.S. employment or production as a condition of the sale’s going through.“I would be shocked if this deal got blocked,” she said.Mr. Hawley said the choice was ultimately Mr. Biden’s — and a test of his commitment to the industry.“If the administration wants to block the sale, they absolutely have grounds to do it and the legal authority,” he said. “So it’s just a question of, do they want to? And will they have the guts to do it?” More

  • 113 Shares149 Views

    in Economy

    For Biden, Debt Limit Crisis Complicates Trip to Asia

    by

    Volatility has become the new norm in Washington as the president heads to Japan, where he will reassure world leaders that the debt ceiling showdown will not upend the global economy.President Biden left for Japan on Wednesday for a meeting of the leaders of seven major industrial democracies who get together each year to try to keep the world economy stable.But as it turns out, the major potential threat to global economic stability this year is the United States.When Mr. Biden lands in Hiroshima for the annual Group of 7 summit meeting on Thursday, the United States will be two weeks from a possible default that would jolt not only its own economy but those of the other countries at the table. It will fall to Mr. Biden to reassure his counterparts that he will find a way to avoid that, but they understand it is not solely in his control.The showdown with Republicans over raising the federal debt ceiling has already upended the president’s international diplomacy by forcing a last-minute cancellation of two stops he had planned to make after Japan: Papua New Guinea and Australia. Rather than being the unchallenged commander of the most powerful superpower striding across the world stage, Mr. Biden will be an embattled leader forced to rush home to avert a catastrophe of America’s own making.He was at least bolstered before leaving Washington by signs of progress as both sides emerged from a White House meeting on Tuesday expressing optimism that an agreement was possible. In the preparations leading up to the G7 meeting, officials from the other participating countries have not struck U.S. officials as all that alarmed about the possibility of default, perhaps because they trust Mr. Biden, know that the moment of truth is still a couple weeks away and assume that Washington will get its act together in time.Mr. Biden is set to depart on Wednesday for the G7 meeting in Hiroshima, Japan.How Hwee Young/EPA, via ShutterstockBut that simply underscores how much volatility has become the new norm in Washington. After generations of counting on the United States as the most important stabilizing force in world affairs, allies in recent years have increasingly come to expect a certain level of dysfunction instead. Extended government shutdowns, banking crises, debt ceiling fights and even political violence would once have been unthinkable but have prompted foreign leaders to factor American unpredictability into their calculations.“I think our biggest threat is us,” said Jane Harman, a former Democratic representative from California who later served as the president of the Woodrow Wilson International Center for Scholars. “Our leadership in the world is being eroded by our internal dysfunction. The markets are still betting against our defaulting, and that’s a decent bet. But if we only manage to eke out a short-term extension and the price is onerous budget caps — including on defense — we will be hobbled when Ukraine needs us most and China is building beachheads everywhere.”The White House warned that a default would only embolden America’s adversaries, using the argument against Republicans, whom they blame for playing with fire.“There’s countries like Russia and China that would love nothing more than for us to default so they could point the finger and say, ‘You see, the United States is not a stable, reliable partner,’” said John F. Kirby, a spokesman for the National Security Council.But he sought to play down the effects of the dispute on the G7 meeting, saying that he doubted it would “dominate the discussion” and maintaining that other leaders “don’t need to worry about that part of it.” The president’s counterparts would understand his need to cut short his trip, he said.“They know that our ability to pay our debts is a key part of U.S. credibility and leadership around the world,” Mr. Kirby said. “And so they understand that the president also has to focus on making sure that we don’t default and on having these conversations with congressional leaders.”Even if they understand, though, they see consequences. Mr. Biden’s decision to head home early reinforces questions about American commitment to the Asia-Pacific region and leaves a vacuum that China may exploit, according to analysts. A presidential visit to places like Papua New Guinea, where no U.S. leader has gone before, speaks loudly about diplomatic priorities — as does the failure to follow through.This is not the first time an American president has scrubbed a foreign trip to deal with domestic concerns. President George H.W. Bush canceled a two-week trip to Asia in 1991 to show he was focused on a lagging economy at home, while President Bill Clinton scrapped a trip to Japan during a government shutdown in 1995. President Barack Obama delayed a trip to Indonesia and Australia in 2010 to focus on health care legislation, then skipped an Asia-Pacific summit meeting in 2013 during a government shutdown of his own.The perpetual culture of crisis in Washington, however, has grown only more intense since the arrival of President Donald J. Trump, who threatened to unravel bedrock alliances and embraced longstanding adversaries abroad while disrupting democratic norms and economic conventions at home.Speaker Kevin McCarthy said it was possible that a deal regarding the debt ceiling could materialize in days.Haiyun Jiang/The New York TimesThe debt ceiling showdown between Mr. Biden and Speaker Kevin McCarthy has underscored to the president’s peers that however much he may seek to restore normalcy, U.S. politics has not returned to the steady state of the past — not least because Mr. Trump seeks to reclaim office in next year’s election.World leaders took notice last week during Mr. Trump’s CNN town hall-style interview in which he refused to back Ukraine in its war against Russian invasion and casually endorsed the idea of a default, saying it would not be that damaging and indeed “could be maybe nothing.”That is not how most policymakers and analysts see it.Treasury Secretary Janet L. Yellen said at a meeting of G7 finance ministers and central bankers in Japan last week that a default “would spark a global downturn” and “risk undermining U.S. global economic leadership and raise questions about our ability to defend our national security interests.”Mr. Biden, a veteran of half a century in high office in Washington, has regularly remarked on the uncertainty surrounding America’s place in the world that he discovered when he took office after Mr. Trump’s disruptive four years. “America is back,” he said he would tell foreign counterparts, only to hear, “But for how long?”By contrast to his predecessor, Mr. Biden has conducted a far more conventional foreign policy familiar to world leaders, and foreign officials see him as a more traditional U.S. president. But they also understand that he is presiding over a country whose democracy has been tested and found to be fragile. And they see a fractious politics in Washington that values confrontation over compromise, even at the risk of something that would have once been unimaginable, like a default.“For sure, the U.S. debt ceiling issue will be a topic of conversation and concern at the G7 summit,” Matthew P. Goodman, a senior vice president for economics at the Center for Strategic and International Studies in Washington, said at a briefing about the meeting last week. “I’m sure the other leaders will ask, you know, how serious this risk is. And I assume President Biden will say he’s working on it and doing everything he can to avoid it.”By this point, U.S. partners have become oddly accustomed to the culture that dominates Washington. They have watched the brewing debt ceiling fight with little evident fear.“I don’t think many European governments are very concerned, presumably because these crises come round quite often but never end in disaster,” said Charles Grant, the director of the Centre for European Reform in London. “Cutting short the trip is a bad signal, but there is such good will to Biden in most capitals that they are prepared to cut him some slack.” More

  • 138 Shares99 Views

    in Economy

    Lawmakers Rebuke Biden for Bypassing Congress in Trade Deal With Japan

    by

    A statement from two Democrats called the Biden administration’s deal “unacceptable,” saying it should have been made available to Congress and the public for review.WASHINGTON — Lawmakers on Tuesday issued a sharp rebuke of a limited trade deal the Biden administration reached with Japan, saying that it should have been made available to Congress and the public for review and that it lacked important protections for the environment and workers.In a statement viewed by The New York Times, Representative Richard E. Neal of Massachusetts, the Democratic ranking member of the Ways and Means Committee, and Senator Ron Wyden, Democrat of Oregon and the chairman of the Finance Committee, called the agreement “unacceptable.”“Without enforceable environmental or labor protections, the administration abandons worker-centric trade policy and jeopardizes our climate work by opening the door for another environmental catastrophe,” wrote the lawmakers, who are the two most powerful Democrats in Congress on trade issues.“Agreements should be developed transparently and made available to the public for meaningful review well before signing,” they added, “not after the ink is already dry.”The Biden administration announced late Monday that it had reached an agreement with Japan over supplies of critical minerals like lithium, cobalt and nickel, which are used to make car batteries. The agreement provides a potential workaround for the Biden administration in its disagreement with allies over the terms of the Inflation Reduction Act, which invests $370 billion to transition the United States to cleaner cars and energy sources.That law has angered some allies who were excluded from its benefits, which include generous tax incentives for companies that make electric vehicles in North America or source material for batteries from the United States or countries with which it has a free-trade agreement. That category does not include Japan or European Union countries.But because the Inflation Reduction Act does not technically define what constitutes a free-trade agreement, U.S. officials have found what they believe to be a workaround. They are arguing that countries will be able to meet the requirement by signing a more limited trade deal instead. The Treasury Department is expected to issue a proposed rule this week clarifying the provisions of the law..css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.A fact sheet distributed late Monday by the Office of the United States Trade Representative said that the United States and Japan had promised to encourage higher labor and environmental standards for minerals that power electric vehicles. The parties also promised to promote more efficient use of resources and confer on how they review investments from foreign entities in the sector, among other pledges.In a call with reporters on Monday, a senior official said the Biden administration had consulted with Congress and received input from lawmakers. But the official said the administration had the authority to negotiate limited agreements without submitting them to Congress for approval.Katherine Tai, the United States trade representative, had been expected to sign the agreement on Tuesday.“It’s clear this agreement is one of convenience,” Mr. Neal and Mr. Wyden said in the statement. “As we warned Ambassador Tai last week, the administration does not have the authority to unilaterally enter into free trade agreements.”Administration officials have argued that key members of Congress always intended U.S. allies to be included in the law’s benefits. But other lawmakers have also criticized the Biden administration for sidestepping Congress’s authority over new trade deals, a tactic that the Trump administration also frequently used.In a statement on Tuesday, Representative Jason Smith, Republican of Missouri and the chairman of the Ways and Means Committee, said the agreement with Japan did not shift critical mineral supply chains from China.“Equally shameful is the fact that the Biden administration is distorting the plain text of U.S. law to write as many green corporate welfare checks as possible,” Mr. Smith said. “The administration has not been transparent with the American people and has ignored major concerns raised by Congress, including failing to provide an analysis of the effects this agreement would have on American workers.”Representative Dan Kildee, Democrat of Michigan, said on Tuesday that the administration was taking the wrong approach with the deal.“I believe the administration must come to Congress if they want to enter new free trade pacts,” he said in a statement. More

  • 100 Shares169 Views

    in Economy

    U.S. and Japan Reach Deal on Battery Minerals

    by

    While the terms of the deal are limited, the agreement appears to provide a model for resolving recent trade spats between the United States and some of its closest allies.WASHINGTON — The United States and Japan have reached an agreement over supplies of the critical minerals used to make car batteries, a deal that will likely put to rest a contentious issue in the relationship with Japan and could be a model for resolving similar disputes with other trading partners.The agreement provides a potential workaround for the Biden administration in its disagreement not only with Japan, but with the European Union and other allies over the terms of its new climate legislation. The Inflation Reduction Act, which invests $370 billion to transition the United States to cleaner cars and energy sources, has angered some allies who were excluded from its benefits.While the scope of the agreement is limited, the Biden administration has also promoted the deal as the beginning of a new framework that the United States and its allies hope to build with like-minded countries to develop more stable supply chains for electric vehicles that do not rely as heavily on China. American officials have argued that China’s dominance of the global car battery industry, including the processing of the minerals needed to make the batteries, leaves the United States highly vulnerable.According to a fact sheet distributed by the Office of the United States Trade Representative late Monday, the United States and Japan promised to encourage higher labor and environmental standards for minerals that are key to powering electric vehicles, like lithium, cobalt and nickel. The countries said they would also promote more efficient use of resources and confer on how they reviewed investments from foreign entities in the sector, among other pledges.Katherine Tai, the United States trade representative, was expected to sign the agreement Tuesday alongside Koji Tomita, the Japanese ambassador to the United States. The United States and Europe are separately negotiating a similar agreement..css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.Ms. Tai said the announcement was “proof of President Biden’s commitment to building resilient and secure supply chains.” She added that “Japan is one of our most valued trading partners, and this agreement will enable us to deepen our existing bilateral relationship.”The deal appears to be aimed at expanding certain provisions of the climate legislation, which offers generous tax incentives for electric vehicles that are built in North America or source the material for their batteries from the United States or countries with which the United States has a free-trade agreement. The United States has free-trade agreements with 20 countries but not the European Union or Japan, and foreign allies have complained that the legislation will disadvantage their companies and lure investment away from them.But since the Inflation Reduction Act does not technically define what constitutes a “free-trade agreement,” American officials have found what they believe to be a workaround. They are arguing that countries will be able to meet the requirement by signing a more limited trade deal instead. Later this week, the Treasury Department is expected to issue a proposed rule clarifying the law’s provisions.President Biden and the European Commission president, Ursula von der Leyen, announced after a meeting earlier this month that their governments were pursuing a similar deal. But European officials said that arrangement could take more time to finalize, since the European Union must submit such agreements to its member states for their approval.While the administration argued that key members of Congress always intended American allies to be included in the law’s benefits, some lawmakers have protested these arrangements, saying the Biden administration is sidestepping Congress’s authority over new trade deals.“The executive branch, in my view, has begun to embrace a go-it-alone trade policy,” Senator Ron Wyden of Oregon, the Democratic chairman of the Senate Finance Committee, said last week, as Ms. Tai testified before the committee. Congress’s role in U.S. trade policy “is black-letter law, colleagues, and it’s unacceptable to even offer the argument otherwise,” he added. More

  • 175 Shares159 Views

    in Economy

    Netherlands and Japan Said to Join U.S. in Curbing China’s Access to Chip Tech

    by

    A new agreement is expected to expand the reach of U.S. technology restrictions on China issued last year.WASHINGTON — The Netherlands and Japan, both makers of some of the world’s most advanced equipment for manufacturing semiconductors, agreed on Friday to join with the United States in barring some shipments of their most high-tech machinery to China, people familiar with the agreement said.The agreement, which followed high-level meetings with U.S. national security officials in Washington, will help expand the reach of sweeping restrictions issued unilaterally by the Biden administration in October on the kinds of semiconductor technology that can be shared with China.The countries did not publicly announce the agreement, because of its sensitivity, and details remain unclear. But the deal seems likely to put technology industries in the countries on a more even footing, preventing companies in Japan and the Netherlands from rushing in to claim market share in China that has been abandoned by U.S. firms. American companies have said that possibility would put them at a disadvantage.More on JapanMissing a Successor: An owner’s struggle to find someone to take over his thriving business illuminates the potentially devastating economic effects of an aging society.Tech Workers: Japanese companies are trying to lure highly educated Indians to fill a shortage of IT engineers. Can they make their country appealing to them?Hiroyuki Nishimura: This celebrity entrepreneur and author has become a voice for disenchanted young Japanese. What he talks about much less is his ownership of 4chan.A Policy Change: Japan’s central bank unexpectedly announced in December that it was adjusting its stance on bond purchases. This is why that matters.The White House and the Dutch government declined to comment. The Japanese government did not immediately respond to a request for comment.The United States imposed strict controls in October on the sale to China of both semiconductors and the machines used to make them, arguing that Beijing could use the technology for military purposes, like breaking American codes or guiding hypersonic missiles. But well before those restrictions were issued, the United States had been pressing the Netherlands and Japan to further limit the advanced technology they export to China.The October rules also clamped down on certain shipments to China from countries outside the United States. Using a novel regulation called the foreign direct product rule, the Biden administration barred companies that use American technology, software or inputs from selling certain advanced semiconductors to China. But these measures applied only to chips, not the machinery used to make them.Instead, the White House continued to press allies to pass restrictions limiting the sales of semiconductor manufacturing equipment by firms like the Dutch company ASML or Tokyo Electron in Japan. The White House argued that the sale of this advanced machinery to China created the danger that Beijing could one day make its own versions of the advanced products it could no longer buy from the United States.The negotiations, which are likely to continue, have had to overcome both commercial and logistical concerns. Like the Americans, the Dutch and Japanese were concerned that if they pulled out of the Chinese market, foreign competitors would take their place, said Emily Benson, a senior fellow at the Center for Strategic and International Relations, a Washington think tank. Over time, that “could impact their ability to maintain a technological edge over competitors,” she said.The Dutch government has already forbidden sales of its most advanced semiconductor machinery, called extreme ultraviolet lithography systems, to China. But the United States has encouraged the Dutch to also limit a slightly less advanced system, called deep ultraviolet lithography. The deal reached Friday includes at least some restrictions on that equipment, according to one person familiar with its terms.Governments have also faced questions about whether they possess the legal authority to issue restrictions like the United States, as well as extensive technical discussions about which technologies to restrict. Japan and the Netherlands will still likely require some time to make changes to their laws and regulations to put new restrictions in place, Ms. Benson added, and it could take months or years for restrictions in the three countries to mirror one another. More

  • 150 Shares109 Views

    in Economy

    Japan’s Business Owners Can’t Find Successors. This Man Is Giving His Away.

    by

    Hidekazu Yokoyama has spent three decades building a thriving logistics business on Japan’s snowy northern island of Hokkaido, an area that provides much of the country’s milk.Last year, he decided to give it all away.It was a radical solution for a problem that has become increasingly common in Japan, the world’s grayest society. As the country’s birthrate has plummeted and its population has grown older, the average age of business owners has risen to around 62. Nearly 60 percent of the country’s businesses report that they have no plan for what comes next.While Mr. Yokoyama, 73, felt too old to carry on much longer, quitting wasn’t an option: Too many farmers had come to depend on his company. “I definitely couldn’t abandon the business,” he said. But his children weren’t interested in running it. Neither were his employees. And few potential owners wanted to move to the remote, frozen north.So he placed a notice with a service that helps small-business owners in far-flung locales find someone to take over. The advertised sale price: zero yen.Mr. Yokoyama’s struggle symbolizes one of the most potentially devastating economic impacts of Japan’s aging society. It is inevitable that many small- and medium-size companies will go out of business as the population shrinks, but policymakers fear that the country could be hit by a surge in closures as aging owners retire en masse.In an apocalyptic 2019 presentation, Japan’s trade ministry projected that by 2025, around 630,000 profitable businesses could close up shop, costing the economy $165 billion and as many as 6.5 million jobs.Economic growth is already anemic, and the Japanese authorities have sprung into action in hopes of averting a catastrophe. Government offices have embarked on public relations campaigns to educate aging owners about options for continuing their businesses beyond their retirements and have set up service centers to help them find buyers. To sweeten the pot, the authorities have introduced large subsidies and tax breaks for new owners.Still, the challenges remain formidable. One of the biggest obstacles to finding a successor has been tradition, said Tsuneo Watanabe, a director of Nihon M&A Center, a company that specializes in finding buyers for valuable small- and medium-size enterprises. The company, founded in 1991, has become enormously lucrative, recording $359 million in revenue last year.Mr. Yokoyama plans to give away his land and equipment to a successor he has chosen.Noriko Hayashi for The New York TimesOne of Mr. Yokoyama’s workers.Noriko Hayashi for The New York TimesBut building that business has been a long process. In years past, small-business owners, particularly those who ran the country’s many decades- or even centuries-old companies, assumed that their children or a trusted employee would take over. They had no interest in selling their life’s work to a stranger, much less a competitor.More on Social Security and RetirementEarning Income After Retiring: Collecting Social Security while working can get complicated. Here are some key things to remember.An Uptick in Elder Poverty: Older Americans didn’t fare as well through the pandemic. But longer-term trends aren’t moving in their favor, either.Medicare Costs: Low-income Americans on Medicare can get assistance paying their premiums and other expenses. This is how to apply.Claiming Social Security: Looking to make the most of this benefit? These online tools can help you figure out your income needs and when to file.Mergers and acquisitions “weren’t well regarded. A lot of people felt that it was better to shut the company down than sell it,” Mr. Watanabe said. Perceptions of the industry have improved over the years, but there are “still many businesspeople who aren’t even aware that M&A is an option,” he added.While the market has found buyers for the businesses most ripe for the picking, it can seem nearly impossible for many small but economically vital companies to find someone to take over.In 2021, government help centers and the top five merger-and-acquisitions services found buyers for only 2,413 businesses, according to Japan’s trade ministry. Another 44,000 were abandoned. Over 55 percent of those were still profitable when they closed.Many of those businesses were in small towns and cities, where the succession problem is a potentially existential threat. The collapse of a business, whether a major local employer or a village’s only grocery store, can make it even harder for those places to survive the constant attrition of aging populations and urban flight that is hollowing out the countryside.After a government-run matching program failed to find someone to take over for Mr. Yokoyama, a bank suggested that he turn to Relay, a company based in Kyushu, Japan’s southernmost main island.Hay stored in a warehouse on the Yokoyama land.Noriko Hayashi for The New York TimesAn abandoned cowshed.Noriko Hayashi for The New York TimesRelay has differentiated itself by appealing to potential buyers’ sense of community and purpose. Its listings, featuring beaming proprietors in front of sushi shops and bucolic fields, are engineered to appeal to harried urbanites dreaming of a different lifestyle.The company’s task in Mr. Yokoyama’s case wasn’t easy. For most Japanese, the town where his business is situated, Monbetsu, which has around 20,000 people and is shrinking, might as well be the North Pole. The only industries are fishing and farming, and they largely go into hibernation as the days grow short and snow piles up to roof eaves. In deep winter, some tourists come to eat salmon roe and scallops and see the ice floes that lock in the city’s modest port.A street full of 1980s-era cabarets and restaurants is a snapshot of a more prosperous time when young fishermen gathered to let off steam and spend big paychecks. Today, faded posters peel off abandoned storefronts. The town’s biggest building is a new hospital.In 2001, Monbetsu constructed a new elementary school building just around the corner from Mr. Yokoyama’s company. It closed after just 10 years.In times past, the classrooms would have been filled with the grandchildren of local dairy farmers. But their own children have now mostly moved to cities in search of higher-paying, less onerous work.With no obvious successors, the farms have folded one after another. Decades-high inflation brought on by the pandemic and Russia’s war in Ukraine has pushed dozens of holdouts into early retirement.Mr. Yokoyama’s employees are skeptical about his succession plan.Noriko Hayashi for The New York TimesThe workers are mostly in their 50s and 60s.Noriko Hayashi for The New York TimesAs local farmers have aged and their profits thinned, more of them have come to depend on Mr. Yokoyama for tasks like harvesting hay and clearing snow. His days start at 4 a.m. and end at 7 in the evening. He sleeps in a small room behind his office.It would be “extremely difficult” if his business folded, said Isao Ikeno, the manager of a nearby dairy cooperative that has turned heavily to automation as workers have become harder to find.On the cooperative’s farm, 17 employees tend to 3,000 head of cattle, and Mr. Yokoyama’s company fills in the gaps. No other area businesses can provide the services, Mr. Ikeno said.Mr. Yokoyama began contemplating retirement about six years ago. But it wasn’t clear what would happen to the business.While he had taken on a little over half a million dollars in debt, years of generous economic stimulus policies have kept interest rates at rock bottom, easing the burden, and the company’s annual profit margin was around 30 percent.The ad he placed on Relay acknowledged that the job was hard, but it said that no experience was needed. The best candidate would be “young and ready to work.”Whoever was chosen would take over the debts, but also inherit all of the business’s equipment and nearly 150 acres of prime farmland and forest. Mr. Yokoyama’s children will get nothing.“I told them that if you want to take it over, I’d leave it to you, but if you don’t want to do it, I’m giving it all to the next guy,” he said.Thirty inquiries poured in. Among those who expressed interest were a couple and a representative of a company that planned to expand. Mr. Yokoyama settled on a dark horse, 26-year-old Kai Fujisawa.A friend had showed Mr. Fujisawa the ad on Relay, and Mr. Fujisawa immediately jumped in a car and showed up on Mr. Yokoyama’s doorstep, impressing him with his youth and enthusiasm.Kai Fujisawa, Mr. Yokoyama’s potential successor.Noriko Hayashi for The New York TimesStill, the transition hasn’t been smooth. Mr. Yokoyama is not entirely convinced that Mr. Fujisawa is the right person for the job. The learning curve is steeper than either of them had imagined, and Mr. Yokoyama’s grizzled, chain-smoking employees are skeptical that Mr. Fujisawa will be able to live up to the boss’s reputation.Most of the company’s 17 employees are in their 50s and 60s, and it’s not clear where Mr. Fujisawa will find people to replace them as they retire.“There’s a lot of pressure,” Mr. Fujisawa said. But “when I came here, I was prepared to do this for the rest of my life.” More

  • 138 Shares149 Views

    in Economy

    Why Japan’s Sudden Shift on Bond Purchases Dealt a Global Jolt

    by

    The world has relied on ultralow interest rates in Japan. What will happen if they rise?Japan is the world’s largest creditor. At the end of 2021, it held roughly $3.2 trillion in foreign assets, 30 percent more than No. 2 Germany. As of October, it owned over a trillion dollars of U.S. government debt, more than China. Japanese banks are the world’s largest cross-border lenders, with nearly $4.8 trillion in claims in other countries.Late last month, the world got an unexpected reminder of how integral Japan is to the global economy, when the country’s central bank unexpectedly announced that it was adjusting its stance on bond purchases.To those unversed in the intricacies of monetary policy, the significance of Japan’s decision to raise the ceiling on its 10-year bond yields may not have been immediately clear. But for the finance industry, the surprising change raised expectations that the days of rock-bottom Japanese interest rates could be numbered — potentially further squeezing global credit markets that were already tightening as the world economy slows.Since this summer, the Bank of Japan has been an outlier, keeping its interest rates ultralow even as other central banks raced to keep up with the Federal Reserve, which has ratcheted up lending costs in an effort to tame high inflation.As global rates have diverged from those in Japan, the value of the yen has fallen as investors sought better returns elsewhere. That has put pressure on the Bank of Japan to shift the world’s third-largest economy away from its decade-long commitment to cheap money, a policy known as monetary easing.Japan’s deep integration into global financial networks means that there is a lot of money riding on the timing of any move away from that policy, and investors have spent years fruitlessly waiting for a sign.As of mid-December, the overwhelming expectation was that the bank would hold off on any changes until next spring, when Haruhiko Kuroda, the Bank of Japan’s governor and an architect of its current policies, is set to step down.Inflation F.A.Q.Card 1 of 5What is inflation? More