I’m not sure why Sankei is saying here that the LDP has to pass the DPJ tax bill in the Lower House by 31 March if it comes out of the Upper House “to avoid a “Grand Panic” where all the temporary tax rates including customs tariffs become void”. It has the mechanics right, but the Lower House also passed a stand-alone bill － as is the custom － to amend the Customs Tariffs Act curtsey of the Fukuda Cabinet and sent it to the Upper House. If the DPJ refuses to vote on that bill in the Upper House, it will rightfully be accused of playing politics with customs tariffs to get its way on the unrelated gasoline taxes.
More pertinent to the Sankei claims, if the DPJ has its way and the LDP stands firm, the biggest impact will fall on beef, where the tariff will revert from 38.5% to 50% on April imports. Not insignificant, but will it make you feel better if you remember that the yen was hovering upwards of 120 to the dollar about this time last year, which more than cancels out the effects of a higher tariff rate? The more important Australian Dollar (where beef is concerned) has fallen from around 100 to 90 yen during the same period, just about canceling out the effects. Tariffs and exchange rates are not the only things that affect beef prices (feed grain, China, etc.), but the reports of the sky falling down have been greatly exaggerated.
Yes, a standoff will have some real-world effects. Still, it won’t be anything near the end of the world. Politically, it’s mainly a blame game, and my guess is that the LDP does not think that the DPJ is playing it very well. It must be looking at the polls and thinking, as badly as the Fukuda administration is doing, the DPJ is looking even worse, and we think we know why.
Now if I’m right and Sankei is wrong, what’s going on? Are the people there stupid? Or are they playing their own political games?