By Shashwat Awasthi and Carolina Mandl

NEW YORK (Reuters) – Izumi Kobayashi, director at Japan's Mizuho (NYSE:MFG) Financial, Omron, and ANA, stated on Tuesday that companies should not overreact to President-elect Donald Trump's threats of imposing tariffs on Chinese goods.

During an interview at the Reuters NEXT conference in New York, she emphasized the difficulties of withdrawing from China due to its immense market size.

Kobayashi noted that industrial conglomerate Omron has not initiated any preparations for potential sanctions from the incoming Trump administration but mentioned that discussions are ongoing.

One possible action could be to separate the Chinese unit from the rest of the business. However, this approach would pose management challenges.

Japan is closely monitoring potential sanctions against China. Last year, the country’s financial regulator consulted major domestic banks regarding risks associated with China and their contingency plans in the event of escalating Sino-Western tensions, considering their substantial exposure to the Chinese market.

A significant risk for Japanese banks might stem from U.S. sanctions on China, which could restrict their operations there, analogous to the bans placed on Russia following its invasion of Ukraine.

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