Japan

The Japanese economy is in trouble. Not huge trouble. Its growth rate is a mere 0.5 percent. Inflation looks good at 2.2 percent but the country has an ageing population and low birth rate.

It is unsteady enough that a major setback could have big consequences for the world’s third largest economy. And Trump’s tariffs have created a setback for the country’s car industry. So much so that this week industry leaders took the unusual step of warning of tough times ahead.

Japan is heavily dependent on car exports. According to the International Trade Centre, 20 percent of Japanese exports are cars and car exports account for 28.3 percent of all Japanese exports to the US.

Trump’s tariffs, warned Japanese car manufacturers, will cost the country billions in lost profits and that the industry will be faced to tighten its belt for “the foreseeable future.”

Under the terms of a US-Japan trade agreement negotiated two months ago, across-the-board US tariffs on Japanese goods were reduced to 15 percent in return to a $550 billion Japanese investment in the US.

The problem is that Japan is already the biggest foreign direct investor in the US. At the end of 2024 it had $819.2 billion invested in the US. Much of it was in the car industry. In fact, 70 percent of the Japanese-brand cars sold in the US are manufactured in America.

Honda Motor announced last Friday that it expected the tariffs to cut its profits by approximately $2.5 billion. The previous day, Nissan Motors said it would have broken even this year if not for the tariffs. Instead, it projected a $1.8 billion loss.

Japan’s largest carmaker, Toyota Motors, said earlier this week that it expected tariffs to cost the company about $9.4 billion this year, an upward revision from its August forecast of $9.1 billion. The company said the levies were hitting not only its own exports but also its worldwide network of suppliers.

During his recent trip to Japan, Donald Trump, Mr. Trump said Toyota would sell American-made vehicles in Japan and would spend $10 billion constructing auto plants “throughout the United States.”

As usual, Trump’s hyperbolic comments required clarification. They came from Kenta Ton, Toyota’s chief financial officer who said that the company had made no “formal $10 billion commitment and selling American cars in Japan “was a possibility that Toyota would consider.”

Hungary

Trump faced a diplomatic dilemma as this blog went to press on Friday. Does his relations with a close foreign political ally outweigh the American national interest and, possibly, has chances of winning next year’s Nobel Peace Prize?

Normally any meeting between Donald Trump and Hungarian Prime Minister Viktor Orban is a glowing session of the mutual admiration society. Orban is seen by many in the administration and the wider MAGA movement as the European precursor for populist conservatism in America.

During Trump’s wilderness years, Orban continued to sing his praises and even visited him at his Mar-a-Lago Florida estate. The fact that Orban’s government was in bad odour with the Biden Administration has also helped him with Trump.

Many have pointed Orban’s crackdown on the media, immigration, courts and academia as a model for Trump’s own actions. And Deputy Secretary of State John Landau recently praised the Hungarian leader for his “unstinting defense of Western Christian values.”

But beside that is the recent sanctions that Trump imposed on Russia’s two biggest oil companies as a sign of the frustration that Trump feels at Putin’s refusal to compromise his positions on Ukraine.

Orban wants an exemption from those sanctions. Hungary imports 86 percent of its oil and gas from Russia. The Hungarian leader has called Trump’s sanctions “a mistake” and argues that his country is not ready to stop its reliance on Russian oil. “Hungary,” he said, “is very dependent on Russian oil and gas. Without them energy prices will skyrocket, causing shortages to our supplies.”

For Orban. The situation is worsened by the fact that he faces one of his toughest election battles yet and one of the pillars of Orban’s domestic success is his good relations with Trump.

But on the other side of the argument is that a resolution of the Ukraine War is much more important than helping Viktor Orban retain power in Hungary. Having said that, Donald Trump, has repeatedly put relationships—especially personal loyalties—before the national interest.

It is important that the two men share a common ideology. But at the root of that ideology is national selfishness. So even if the two men are aligned in their approach, the ideology says you are on your own.

Ukraine

Ukraine is facing its biggest loss for months. It involves the eastern city of Pokrovsk which sits at a strategic road and rail artery in the Donetsk region.

If Vladimir Putin wins control of the city before winter settles in then he will a step closer to his goal of controlling Ukraine’s entire industrial east.

Russia has amassed tens of thousands of troops in the area, and hundreds of its soldiers have infiltrated the city in the past few weeks, gradually taking over buildings and streets and overwhelming Ukrainian positions.

But on n Wednesday, Kyiv’s General Staff denied its forces in and around the town had been encircled and maintained they were still involved in “active resistance” and blocking out Russian troops. One Ukrainian regiment said it had cleared the city council and posted a video of a Ukrainian flag hung on the building.

For its part Russia said it was continuing to advance northwards and thwarting attempts by Ukraine to break its troops out of encirclement. Ukrainian units were trapped in “cauldrons”, the Russian defence ministry said.

Open-source intelligence maps offer differing assessments of the situation on the ground. While some suggest Moscow’s troops are probably occupying large areas of Pokrovsk, others say that the majority of the town is still disputed.

Russia’s military has had its sights trained on Pokrovsk since it captured the eastern city of Avdiivka in February 2024. Its capture deprived Ukraine of an important military stronghold in the Donetsk region, but it has since taken 21 months for Russia to advance a further 25 miles northwest to threaten Pokrovsky

Even if Pokrovsk falls that does not mean the rest of Donetsk would too. Ukraine’s Volodymyr Zelensky has long insisted that Russia’s military will have to keep fighting for several more years if it is to have any chance of fully occupying the entire Donbas.

He is not alone in this assessment. The Institute for the Study of War believes Russia lacks the means of “rapidly enveloping or penetrating the fortress belt” and says it would likely take several years of bitter inch by inch fighting.

Losing Pokrovsk, however, would be a blow for Ukrainian morale at the start of a winter of Russian attacks on power supplies. It would also come at significant cost to manpower, resources and equipment that have been committed to defending the city.

It might also influence US President Donald Trump’s push for an end to the war and strengthen Moscow’s negotiating position, proving to Trump that Russia is not the “paper tiger” he said it was earlier this autumn.

Although he called off his bid to set up a summit with Putin out of frustration that the Russian leader would not agree to a ceasefire, Russian officials have not given up hope on a deal.

Putin may hope that a Russian success will convince Trump to agree to his demands, even if Ukraine and its European allies reject them.

* Tom Arms is foreign editor of Liberal Democrat Voice. He also contributes to “The New World” magazine and lectures on world affairs. He is the author of “America Made in Britain,” two editions of “The Encyclopaedia of the Cold War” and “The Falklands Crisis.”