"The biggest issue for U.S. consumers," says Gary Hufbauer, senior fellow at the Peterson Institute for International Economics, "is how quickly they can get power grid going again at its full capacity. The quake affected the northeast, not the industrial heartland of Japan. The northeast accounts for only about 4 percent of Japan's GDP."
Nationwide, he says, Japanese industry is facing a reduced supply of electricity, caused in part by the shutdown of nuclear plants damaged by quakes or water. "They get about 20 percent of their power from nuclear," he says. "Of that, about a quarter could be down for a long time. That's a pretty big hit."
Factories in the region, including ones belonging to Sony and Toyota, have chosen temporarily to suspend operations, so that the available electricity can be put to domestic household use.
Bob Cole, a Japan specialist and professor emeritus at the Haas School of Business at U.C. Berkeley, thinks Toyota may be the hardest hit of Japan's car makers. Reason? They're the one most dependent on locally-produced content, he says.
"The Lexis, the Yaris, the Prius and the Scion are all produced entirely in Japan," says Cole. "The Prius was already in short supply, due to rising U.S. gas prices. The profit margin on the Prius and the Lexis is large. This will affect Toyota's bottom line pretty quickly."
Cole notes, too, that one of Japan's leading engineering schools, Tohoku University, is in Sendai, a city badly hurt by the quake. It specialized in the kind of optical technology needed to produce semiconductors as well as cameras and other consumer optical devices. Sony, Nikon and Canon all had operations centered around the school, and all of these may have sustained serious damage.
Gary Hufbauer says in the next two weeks Japan will address its power shortfall by boosting output from under-utilized gas- and oil-fried power plants. Increased use of coal, though, isn't an option: "The coal fired plans are already running close to 100 percent capacity."
The time required to ship goods to the U.S. by sea averages 15 to 20 days, so, for that much time at least, the pipeline of goods will continue to deliver at pre-disaster levels. And afterwards, says Hufbauer—if the power situation improves -- manufacturers ought to be able to make up any shortfalls by increased overtime.
What if the power situation doesn't get better?
"If it gets worse, then by mid-May the U.S. will begin to see shortages in, say, cars and electronics. We'd be feeling it. Inventories by then would have been run down.