Jiji Press TOKYO (Jiji Press) — The escalating trade war between the United States and China has been putting pressure on the administration of Prime Minister Shinzo Abe over its consumption tax increase plan.
The Abe administration is sticking to its policy of implementing the consumption tax increase from the current 8 percent to 10 percent in October.
But calls among members of the ruling Liberal Democratic Party for postponing the tax hike again may grow further ahead of the election in summer for the House of Councillors, the upper chamber of the Dietr, depending on upcoming Japanese economic data, pundits said.
Dampened by the intensifying U.S.-China trade friction, Japanese stocks have kept falling since the new start of the Japanese era. In the latest developments, the administration of U.S. President Donald Trump announced a plan on Monday to expand U.S. tariffs to almost all imports from China, forcing the Nikkei Stock Average to extend its losing streak to a seventh session for the first time in some three years on Tuesday.
Koichi Hagiuda, executive acting secretary general of the LDP, said at a press conference Tuesday that he will closely monitor economic trends, apparently showing a cautious stance on the consumption tax hike.
Hagiuda, a close aide to Abe, came under fire in April when he referred to the possibility of putting off the tax increase.
The government and the ruling camp led by the LDP plan to carry out the hike unless an event as serious as the 2008 financial crisis triggered by the collapse of U.S. investment bank Lehman Brothers occurs.
Deputy Prime Minister and Finance Minister Taro Aso said at a separate news conference on Tuesday, “I don’t think the situation will develop into an event as serious as the 2008 financial crisis.”