FY2025 Survey on Business Conditions of Japanese Companies in North America

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FY2025 JETRO Survey on Business Conditions for Japanese Companies Operating Overseas (North America)

Feb 25, 2026

Overview of FY2025 Survey

• In September 2025, JETRO has conducted an online survey on the state of Japanese companies operating in the U.S. and Canada (those that are at least 10% owned by a Japanese parent, directly or indirectly, and branches of Japanese firms in the U.S. and Canada). 735 responses (652 in the U.S., 83 in Canada) received from 2,058 survey sent (1,871 in the U.S., 187 in Canada, response rate 35.7%).
• This survey is conducted once a year to ascertain the management situation and changes in the local business environment of Japanese companies operating in the U.S. and Canada. This is the 44th annual survey for the U.S. and the 36th for Canada.
• Topics:1. Operating Profit Forecasts, 2. Labor Shortage Challenges and Countermeasures, 3. Wages, 4. Impacts of the Trump Tariff Policies, 5. Impacts of U.S. Federal Government Policies (U.S. only), 6. Reviewing of Supply Chains, 7. Future Business Direction, 8. Business and Human Rights

Survey Items

1. Profit projections have increased—slight increase in the U.S., the highest since 2000 in Canada
   • For 2025, 66.5% of Japanese companies in the U.S. and 80.5% in Canada expect to turn a profit. The percentage for the U.S. slightly increased by 0.3 percentage points from the previous year, whereas the figure for Canada has reached the highest since 2000, driven primarily by surging resource prices.
   • In the U.S., fewer respondents saw a YoY increase in operating profit forecast due to cost increases and economic uncertainty caused by tariffs. As a result, the 2025 business sentiment has reached the lowest level since 2020.
   • Some common reasons for decreased operating profit forecasts are rising procurement costs and decreasing demand in the U.S. market, which are attributed to the Trump tariffs. Another frequently selected reason was rising labor costs —a factor also hindering recruitment efforts.
2. Trump tariffs attract interest in U.S. domestic sourcing
   • Regarding suppliers for raw materials and parts, Japanese companies in the U.S. reported 88 shifts to U.S. sourcing, more than twice the previous year’s level. In particular, a notable number of respondents answered that they planned to switch from China (23) and Japan (45) to the U.S. Moreover, many companies intended to shift from China to Japan (17) and ASEAN countries (21).
   • Production site trends were similar, with the number of planned shifts to the U.S. increasing from 11 in 2024 to 34. In particular, the number of shifts from Japan was 18, the highest since the survey on supplier and production site changes began in FY2019.
   • As for the types of Trump tariffs affecting operating profits, many companies selected “tariffs on Japanese products (73.9%)” and “reciprocal tariffs excluding Japan (57.2%).” For specific impacts, they selected “increasing procurement and import costs” and “decreasing cost competitiveness in the U.S. market”.
   • Although the majority of the respondents cited “passing on increased costs to customers” as a countermeasure, a noticeable share of respondents answered they were struggling to negotiate prices.
3. As local market demand increases, 50% of Japanese companies in the U.S. expect business expansion in the next one to two years.
   • While many Japanese companies in the U.S. acknowledge that tariffs and relevant policies will increase the uncertainty of the U.S. economy, 48.3% of them expect to expand their business in the next one to two years, maintaining a similar level to 2024 (48.6%).
   • The reasons for expansion include “increasing demand in local markets,” specifically the growth expectations in the semiconductor and data center industries/sectors.
   • For Canada, regarding business directions in the next one to two years, a higher percentage of respondents selected “remaining the same” than those planning for “expansion.” Among those that selected “remaining the same,” a substantial number of respondents answered that the market outlook is uncertain because of the Trump administration’s trade policies. The attached document: FY2025 Survey on Business Conditions of Japanese Companies in North America

(1.5MB)

Japan External Trade Organization (JETRO)
Americas Division, Research & Analysis Department (Representatives: Hiroki Koyata, Hiroya Tanimoto)
Tel: +81-3-3582-5545, Email: ORB@jetro.go.jp