Japan

Intelligence for Better Decision Making

Japanese Company Affiliates Challenge Trump-Era Tariffs in US Court
Dec. 4, 2025 | Governance & Law

Affiliates of Japanese firms are contesting the Trump administration’s additional tariffs, arguing that the measures exceeded presidential authority.

**US affiliates of nine Japanese companies—including Toyota Tsusho Corp, Sumitomo Chemical Co., Ricoh Co., Yokohama Rubber Co., Ushio Inc., NGK Insulators Ltd., Kawasaki Motors Ltd., Yamazaki Mazak Corp and Proterial Ltd.—have filed lawsuits in the US Court of International Trade seeking full refunds for tariffs they paid in 2025.**
They argue that the levies, imposed under the International Emergency Economic Powers Act without congressional approval, exceeded the act’s scope by authorizing “reciprocal” or sector-wide tariffs on imports from China, Canada, Mexico and other nations.

**These filings follow Supreme Court oral arguments in November, during which justices questioned whether the president could invoke a 1970s-era emergency law to bypass Congress when imposing high tariffs on national-security grounds.**
Lower courts previously ruled that the Trump administration overstepped its authority by using IEEPA to penalize countries for insufficient cooperation on fentanyl trafficking, rather than to address a direct threat to US national security.

**The Japanese affiliates note that even if the Supreme Court voids the tariffs, importers would not automatically receive refunds.**
They ask the Court of International Trade to declare the tariffs illegal, block any new reciprocal levies and ensure full repayment if the high court strikes down the measures.

**The timing of the Supreme Court’s decision remains uncertain, and legal experts warn that an invalidation could trigger a protracted, complex refund process spanning several years.**
Meanwhile, other entities—such as US retailer Costco Wholesale Corp—have filed their own suits to recover duties paid under the same Trump-era tariff schedules.
LDP Moves to Reduce House Seats and Redraw Electoral Districts
Dec. 4, 2025 | Politics

Japan’s Liberal Democratic Party has proposed reducing the total number of seats in the House of Representatives from 465 to 420 or fewer and redrawing electoral districts based on updated population data.

**The draft legislation tasks an electoral system council—including representatives from all parties in the House—with deciding the precise methods for seat reduction, and it requires lawmakers to enact the necessary legal measures within one year of the law’s passage.**
If the parties fail to reach agreement within twelve months, an automatic reduction clause would eliminate 25 single-member constituencies and 20 proportional representation seats. In that event, the national Council for the Delimitation of Constituencies would use 2025 census figures to redraw district boundaries within one year, potentially paving the way for elections under the new structure by December 2027.

**During an LDP meeting on December 2, 2025, members raised objections to the automatic reduction clause, leading party leaders to delay final approval until the next day.**
Former Foreign Minister Takeo Iwaya criticized the process as rough and urged removal of the clause due to insufficient internal dialogue. Secretary-General Shun’ichi Suzuki defended the one-year review period and the 10 percent reduction target, noting public backing for seat cuts and previous comments by Constitutional Democratic Party leader Yoshihiko Noda. Ahead of that meeting, LDP negotiators and representatives of the Japan Innovation Party agreed to accelerate internal approvals and submit the bill during the current Diet session, though some LDP members still question whether the party can muster the necessary support.

**Two LDP calculations project that single-member districts would drop from 289 to 264 and proportional representation seats from 176 to 156.**
Both estimates apply the Adams method to align seat allocations with prefectural population ratios, targeting cuts in 20 prefectures. Under each plan, Tokyo would lose three single-member seats, Kanagawa, Chiba, and Osaka would each lose two, and smaller prefectures such as Akita, Toyama, and Kagawa would see districts reduced from three to two. All 11 proportional representation blocks would lose between one and three seats, with the exact numbers depending on whether the adjustments use the 2020 census or the 2025 Basic Resident Register data.

**Analysts warn that these reforms would increase disparities in vote weight across prefectures, raising the ratio of the most to the least populous districts from 1.7 to about 1.86.**
Post-reform, Chiba would have the highest population per representative at roughly 510,183, while Tottori would have the lowest at about 274,383. Critics argue that widening these gaps could further weaken rural influence and undermine voter equality. Former Prime Minister Shigeru Ishiba has opposed seat reductions and cautioned that returning to multi-member districts might stoke political conflict, reflecting the broader debate over fair representation and electoral balance.

Monitored Intelligence for Japan - Dec. 5, 2025


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China unleashes diplomatic campaign to isolate Japan amid Taiwan row

Japan Times | English | News | Dec. 5, 2025 | Geopolitical Conflict and Disputes

China has intensified its diplomatic efforts to isolate Japan amid an ongoing dispute over Japanese Prime Minister Sanae Takaichi's comments on Taiwan. Chinese Foreign Minister Wang Yi met with Russian officials Sergey Lavrov and Sergei Shoigu in Moscow, where both countries expressed a shared stance against Japan.

During the talks, China and Russia agreed to enhance their strategic coordination, particularly on issues related to Japan. They jointly criticized Japan for what they described as increasing militarism and reaffirmed their commitment to upholding the outcomes of World War II. Both countries opposed any attempts to whitewash Japan's colonial aggression or revive fascism and militarism.

政府与党、税収偏在是正策を検討 地方法人課税と固定資産税

Government and Party Consider Measures to Correct Tax Revenue Disparities: Local Corporate Taxation and Property Tax

Tokyo Shimbun | Local Language | News | Dec. 5, 2025 | UndeterminedTaxes

The government and ruling parties in Japan have started coordinating new measures to address the concentration of local tax revenues in Tokyo, particularly concerning local corporate taxation and the fixed asset tax on land. They have identified a widening gap in administrative services between Tokyo and other local areas as a key issue. For local corporate taxation, the plan is to expand the existing redistribution scheme that allocates some tax revenue among municipalities. For the fixed asset tax on land, which currently lacks a redistribution mechanism, they are expected to introduce a new system incorporating such redistribution.

These proposals will be included in the ruling parties’ tax reform outline for fiscal 2026, set to be finalized within the year. However, because the development of concrete system designs will require additional time, discussions will carry on into 2026, with the likelihood that the measures will be enacted in the fiscal 2027 tax reform.

Data from the Ministry of Internal Affairs and Communications shows that in fiscal 2023, Tokyo accounted for 17.6% (8 trillion yen) of total local tax revenue of 45.7 trillion yen. Specifically, Tokyo’s share of local corporate taxation remains high at 22.5% after redistribution, and it holds 25.1% of the fixed asset tax on land revenue. Tokyo has continued to enhance resident services, such as subsidizing children’s medical expenses, contributing to disparities with other prefectures.

South Korea's Lee discusses role in mediating Japan-China tensions

NHK | English | News | Dec. 5, 2025 | Shifting Geopolitical Alliances

South Korean President Lee Jae-myung emphasized his commitment to improving ties with Japan and expressed willingness to mediate tensions between Japan and China. He spoke at a news conference marking the one-year anniversary of a martial law declaration by his predecessor, highlighting the need to address specific bilateral issues such as the cancellation of Japan's support for South Korean air force refueling at Naha Air Base and the halted dispatch of a South Korean military band to a Japanese Defense Ministry event.

Lee noted parallels between U.S.-China and Japan-South Korea relations, acknowledging areas of confrontation as well as cooperation. He stressed the importance of gradually resolving unresolved issues to ensure bilateral relations continue to progress in a positive and future-focused direction.

Regarding Chinese responses to remarks by Japanese Prime Minister Takaichi Sanae on Taiwan, Lee cautioned against taking sides, warning that it could escalate tensions. He advocated for a mediating role to help coordinate and minimize conflicts wherever possible.

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