During Donald Trump’s 2016 presidential campaign, he had a peculiar fixation on Komatsu, the Japanese construction equipment giant. Employees at Komatsu were understandably taken aback as Trump repeatedly mentioned the company in interviews and debates, often using it as a punchline to illustrate the decline of U.S. manufacturing. His comments ranged from critiques of healthcare costs—”get hit by a Komatsu tractor”—to outright accusations of unfair advantage due to a weak yen. Initially, Komatsu’s president downplayed the remarks, viewing them as a boost to their global visibility. However, the landscape shifted dramatically after Trump’s election victory.
In 2017, Komatsu made a strategic move by acquiring an American mining equipment manufacturer for approximately $2.8 billion. This acquisition was more than just a financial transaction; it symbolized a pivot toward ingratiating itself with the new administration. Since then, Komatsu has ramped up its investments in North America, creating thousands of jobs and increasing domestic production. Fast forward to this year, and Trump has once again set his sights on Komatsu, claiming that the company benefits from a weak yen that gives it an unfair edge over American competitors.
This renewed scrutiny raises significant questions about what a potential second Trump presidency would mean for global trade, particularly for companies like Komatsu that have found themselves in the crosshairs of his rhetoric. Alicia García-Herrero, chief economist for the Asia Pacific region at Natixis, highlights the inherent risks involved: “It’s really risky because his ire can be random,” she notes. Companies have learned that they can easily become collateral damage in Trump’s trade wars, with unpredictable consequences.
In the broader context, Trump’s return could mean a resurgence of tariffs that would shake up trade dynamics, especially in Asia, where most of America’s trade deficit originates. His campaign promises of imposing blanket tariffs of up to 20% on imports and even higher rates on Chinese goods have executives scrambling to decipher the implications. ANZ, an Australian banking group, suggests that while the 60% tariffs on China might be unlikely, the potential for retaliatory measures from Beijing could disrupt the delicate balance of trade.
Moreover, Trump’s disdain for Biden-era economic initiatives that attracted Asian tech investments adds another layer of complexity. South Korean firms have been investing heavily in U.S. facilities, spurred by the Inflation Reduction Act’s incentives. If Trump follows through on his threats to repeal the act, it could send shockwaves through the industry, prompting companies to reconsider their strategies.
The impact of Trump’s trade policies isn’t limited to Japan or South Korea. His fixation on Harley-Davidson during his first term serves as a cautionary tale for other companies. Despite his claims of negotiating lower tariffs with India, Harley-Davidson ultimately retreated from the market, demonstrating how even iconic American brands can struggle under the weight of tariffs and market realities.
Back at Komatsu’s headquarters in Tokyo, executives are contemplating their next moves in light of the unpredictable political landscape. With the yen trading near three-decade lows, Komatsu’s profitability has soared, but the company knows it must tread carefully. President Hiroyuki Ogawa expressed hope that their substantial U.S. investments and manufacturing presence would be recognized by Trump. As they navigate this uncertain terrain, it becomes clear that the stakes are high for Komatsu and other companies that find themselves once again facing the whims of a president who isn’t shy about wielding his influence.
