Does a Trumpian America mean trouble for Japanese brands?

When Donald Trump sucker-punched the world with his election victory last week, Shinzo Abe was one of the first to congratulate him, saying he expects the controversial businessman to make America “even greater”.

Many are doubtful. But America aside, the implications for Japan, and indeed the rest of the world, are even less clear. Trump’s pledge to put domestic business and production first looks set to derail the Trans-Pacific Partnership trade deal, which has been a cornerstone of Abe’s economic policy and an important step for Japanese companies looking to build their global presence.

Along with Trumpian doctrine comes an apparent wave of nationalistic thinking in the US, which, whether trade is restricted or not, is likely to have implications for the way consumers view foreign brands. Trump has repeatedly criticised Japan for wielding an unfair economic advantage by controlling its currency, recalling the climate of ‘Japan-bashing’ prevalent in the 1980s, when Japanese carmakers were seen as decimating the US industry.

Be part of the American story

Should Japanese brands operating in America be worried? It depends partly on how they are structured. As long as they make a significant contribution to the US market relative to their size in terms of areas like employment, they at least have a story to tell that makes them seem part of the country rather than an outside threat.

Daniel Lochmann, global marketing communications director at Mitsubishi Heavy Industries (MHI), which is making a concerted push for growth in the US (the company’s largest market outside Japan) says the company is optimistic given that it employs more than 7,000 people across 30 US states.

In the face of nationalism, brands “need to continue engaging with their stakeholders, and those that do so in a way that brings them value should always benefit from that engagement wherever they originate,” Lochmann says. A key area for MHI will be contributing to the conversation around the future of manufacturing in the US, he explains.

Some argue that the nationalism presented in the media has always existed, and that the election has simply brought it to the surface. Tetsuya Honda, CEO of Blue Current Japan, suggests that Trump’s ability to galvanise the white working class, and the inability of others to anticipate it, shows a large-scale “failure of consumer understanding” that many marketers, including those representing American companies, will need to address if they too want to resonate with this group. He also sees a lesson for Japanese marketers at home: rather than concentrating all their efforts on the major cities, they should take the time to reacquaint themselves with people in regional areas.

Rei Inamoto, the New York-based founding partner of Inamoto & Company, says any hatred for foreign brands is not something that arises overnight. “What I am concerned about is that there may now be some [sense] that it’s OK to be explicitly racist or disrespectful,” he says. But he thinks it’s likely that a more liberal mindset will prevail in the long term, given that the majority of voters under 45 supported Hillary Clinton.

Inamoto believes US brands, especially those in sectors like automotive, are likely to put more emphasis on their nationality. He predicts a rise in nationalism in advertising at the next Super Bowl, and says he wouldn’t be surprised if foreign brands reduce spending, although it’s “too early to say”.

Clarity of purpose

While non-US brands should be aware of the general tone, Inamoto advises against modifying their approach in a knee-jerk reaction. He sees a lesson in Trump and Clinton’s electoral campaigns for brands: Trump’s clarity of message proved to be more powerful than Clinton’s heavy reliance on advertising.

“Every company should have a clear purpose and point of view and as long as that’s good for the world at large, they should play the long game,” Inamoto says. “Brands are people and the personality of a brand shouldn’t have to change because of the sentiment that surrounds us.”

Uncertainties are likely to continue even once Trump takes office next year. Jerry Buhlmann, global CEO of Dentsu Aegis Network, says while he expects financial volatility, his company does not foresee any impact on media spending in the US or globally. Nick Waters, CEO for Asia-Pacific, says import tariffs are a risk to Asian economies, but is optimistic that a business-friendly Republican congress will take a more balanced approach.

The most important thing is to accept the reality of a maverick at the helm of the world’s most powerful country and work with it. Considering how the stock market has rebounded, technology's ability to hasten recovery from shock events, and people's short attention spans, Inamoto expects the US to return to business as usual relatively quickly. But he also sees Trump's election of a reminder that while technology helps distribute information faster and more widely than ever, it can also skew perspectives. With that in mind, his message for brands is to remain true to their long-term vision no matter what.