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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 applied new tariffs under Section 301 of the Trade Act from 24 July, set at 12.5 per cent on imports from Japan.
Yusuke Takanishi, a partner at the firm, said: “Following the reintroduction of US tariffs, the long-standing and stable investment relationship between the UK and Japan may become even more valuable in the years ahead.”
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 over recent years. Japanese companies have expanded manufacturing facilities, invested in infrastructure, strengthened supply chains and created jobs across the US.”
Takanishi said: “The latest US measures suggest that the relationship between investment and trade policy may not be as straightforward as businesses would hope. Even where economic cooperation is deep and long-standing, companies may still find themselves exposed to new tariffs introduced through a different policy route.”
UK goods have also been subject to US duties. The US International Trade Commission estimates American buyers paid $1.36bn in tariffs on British exports over four months last year, six times the figure for the same period in 2024.
Agreements set out after a Downing Street summit with Japanese prime minister Sanae Takaichi are expected to deliver more than £18bn in economic gains, including up to £9bn for UK offshore wind farms.
Takanishi said: “Against this backdrop, developments in the UK deserve attention from Japanese businesses. The New Prime Minister Andy Burnham has outlined an agenda focused on re-industrialising Britain, investing in infrastructure, strengthening regional economies and developing a longer-term growth strategy. While details will emerge over time, the direction of travel appears to be towards rebuilding industrial capacity and creating conditions for long-term investment.”
Burnham, who took office on 20 July, was mayor of Greater Manchester, where Japanese investors put almost £118m into the city region in a year.
He added: “For Japanese companies operating in the UK, and for UK businesses with interests in Japan, this creates an interesting contrast. At a time when global trade relationships are becoming more complicated and less predictable, the UK–Japan relationship remains rooted in long-term investment, deep commercial ties and mutual trust. The conversation is therefore moving beyond simple market access. Increasingly, businesses are asking where they can make investment decisions with confidence over a five- or ten-year horizon.”
Takanishi said: “From an accounting, tax and compliance perspective, Japanese businesses should therefore be looking beyond the immediate impact of tariffs. Supply chain structures, transfer pricing policies, customs arrangements, governance frameworks and Environmental, Social, and Governance (ESG)-related compliance all need to be reviewed in light of a more uncertain global environment. In my experience, discussions with management teams today are becoming less about finding the lowest-cost location and more about building resilience and predictability into business models.”
He said Japan’s May trade data had shown an external sector that was improving, but not in a broad-based way, with export volume growth remaining modest and part of the improvement driven by currency effects and pricing rather than underlying demand.
He added: “June’s figures are stronger. Japan’s exports increased by 19.3% year-on-year, supported by semiconductor-related demand and AI investment, while imports rose by 25.4%, driven in part by higher energy costs and the weaker yen. But the current environment should not yet be described as a fully established export-led recovery. Japanese businesses continue to face rising input costs, geopolitical uncertainty and renewed questions around global trade policy.”
The June increases, published in the Ministry of Finance trade statistics, were the fastest for both exports and imports since November 2022.
Takanishi said: “The Bank of Japan’s latest Regional Economic Report broadly supports this balanced view. All nine regions were assessed as either recovering or showing moderate improvement, pointing to continued resilience but not necessarily a rapid acceleration in economic activity.”
The report, published on 9 July, left the Bank’s assessment unchanged for all nine regions.
