TOKYO – Japan’s exports to the United States slumped 13.8% in August compared to the same month last year, totaling 1.39 trillion yen (approximately $9.5 billion), according to preliminary data released by the Finance Ministry on Wednesday. This marks the fifth straight month of export declines, a trend largely driven by escalating tariffs that have rocked one of Japan’s most critical trading partnerships.
The ongoing decline has been deeply felt in the automotive sector, where vehicle exports to the U.S. plunged 28.4%. In terms of volume, vehicle shipments fell 9.5% in August alone. This contraction comes in the wake of the U.S. raising auto import duties to 27.5% in April, before partially rolling back the increase to 15% in July — a move that only took effect earlier this week.
The result? A 50.5% drop in Japan’s trade surplus with the U.S., falling to 324 billion yen. Meanwhile, imports from the U.S. grew 11.6% to 1.06 trillion yen, placing further pressure on the trade balance.
Beyond autos, other key industries were also hit hard. Construction machinery exports fell 26.1%, and semiconductor manufacturing equipment exports plummeted 38.9%, showing the widespread impact of the strained trade environment.
Economists warn the worst may not yet be over.
“Price hikes to offset tariffs may start gradually affecting automakers’ sales,” said Takeshi Minami, Chief Economist at Norinchukin Research Institute.
“Even with a reduced 15% tariff, corporate earnings will likely suffer — which could put wage growth and other economic positives at risk,” he added.
On a global scale, Japan recorded a trade deficit for the second month in a row, though the shortfall narrowed by 65.9% to 242.5 billion yen thanks to declining crude oil prices and reduced imports from the Middle East. Total exports dipped just 0.1% to 8.43 trillion yen, but it was still the fourth consecutive month of decline. Imports fell by 5.2% to 8.67 trillion yen.
By region:
- With China, Japan logged a deficit of 425.7 billion yen, the 53rd consecutive month in the red.
- Exports to China dropped 0.5%, while imports grew 2.1%.
- Japan’s trade surplus with Asia, however, rose 25.3% to 545.5 billion yen.
- The European Union trade deficit stood at 121 billion yen, the 19th consecutive month of deficit.
