Japanese exports to the US declined for the first time in five years

The automotive industry was hit hardest, with car exports falling by 11.4% and parts exports by 10.7% due to the new import tariffs.

Japan's exports to the United States fell 4.1% last year, to just over 20 trillion yen. This was the first decline since 2020, a direct consequence of U.S. tariff policies.

The automotive industry was hit hardest, with car exports falling by 11.4% and parts exports by 10.7% due to the new import tariffs. To adapt, major players like Toyota, Honda, and Nissan are considering bringing vehicles manufactured in the US back to the Japanese market.

Conversely, imports from the United States to Japan continued to increase for the second consecutive year, reaching 12.8 trillion yen, a 1.6% increase. The increase was mainly driven by items such as liquefied petroleum gas and grains.

For China, Japan's largest trading partner, Tokyo's exports are projected to decline only slightly in 2025, primarily due to a drop in demand for chip manufacturing equipment.

Conversely, imports from China increased at a faster rate, causing Japan's trade deficit with the country to widen to 7.9 trillion yen.

Japan's total exports are projected to increase by 3.1% in 2025, reaching 110.4 trillion yen, driven by strong demand from Asia for electronic and semiconductor components.

Due to slower import growth, Japan's trade deficit narrowed by more than 50% to 2.6 trillion yen, marking the fifth consecutive year of deficit.

Domestically, new fiscal support measures are expected to help stabilize growth, but after three years of austerity, these measures are mainly aimed at easing pressure rather than providing a strong boost, so imports are likely to grow slowly.

Source: VTV