Japan's Tactical Tax: Balancing Tariffs and Social Welfare

Japanese Prime Minister Shigeru Ishiba has formed a task force to manage trade talks with the U.S., led by Economy Minister Ryosei Akazawa. Plans to cut Japan's sales tax, particularly on food items, are being considered to mitigate economic impacts, though concerns about social welfare funding persist.

On Friday, Japanese Prime Minister Shigeru Ishiba established a task force led by Economy Minister Ryosei Akazawa to manage trade negotiations with the United States. Reports suggest Akazawa aims to visit Washington next week to initiate discussions on U.S. tariffs.

As the Liberal Democratic Party (LDP) and its partner Komeito evaluate potential economic measures, reports indicate a temporary sales tax cut on food items is under consideration. This move seeks to alleviate the financial strain on households amid rising prices.

Komeito leader Tetsuo Saito highlighted the need to ease burdens through tax cuts during a party meeting. However, some LDP officials express caution, concerned about funding social welfare amid Japan's aging population. Meanwhile, Akazawa's potential trip to Washington remains closely watched as part of Japan's broader strategy.

(With inputs from agencies.)