CRS Expects Japan Earthquake to Have Major Impact on Parts Markets, Etc.
The Congressional Research Service has issued two reports stating that the March 2011 earthquake and tsunami that occurred in Japan and the following nuclear crisis at Fukushima are having large negative effects on Japan's economy, particularly due to the subsequent radioactive contamination, and extensive damage to infrastructure and manufacturing plants.
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CRS states that the impact on U.S. imports from and exports to Japan is expected to be modest as a proportion of overall trade, but particular sectors or companies may be affected considerably. The CRS states that Japan plays a major role in global supply chains both as a supplier of parts and as a producer of final products, and that even a small disruption in the provision of a single component can wreak havoc on an entire product line. Japan’s production of automobiles, semiconductors, and electronics is likely to be affected the most, but companies in the U.S. that rely on Japan for critical components such as electronic parts and batteries or transmissions for electrical vehicles also will be affected.
According to the report, the U.S. already has banned imports of certain vegetables and milk from the vicinity of the damaged nuclear reactors and is monitoring other foods for radiation. However, the CRS states that radioactive contamination of seafood from Japan does not currently appear to be a food safety problem for consumers in the U.S. as the damage to infrastructure in Japan has limited food production and associated exports from areas near the Fukushima nuclear facility. Additionally, food products from those areas, including seafood, are to be tested by FDA before they can enter the U.S. food supply.
(See ITT's Online Archives or 05/17/11 news, 11051908, for BP summary of the latest FDA import alert on certain milk products, fruit, vegetables, etc. from Japan due to radionuclide contamination.
See ITT's Online Archives or 04/12/11 news, 11041234, for BP summary of the FDA's updated questions and answers document on what it is doing to ensure the safety of products imported from Japan.)
(CRS R41702 & CRS R41751, dated 04/11)
Report on the effects of Japan's earthquake and tsunami is available here.
Report on the effects of radiation from the Fukushima Daiichi is available here.