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2d ago

U.S. Tariffs Push Japan Into 2.2 Trillion Yen First-Half Trade Deficit

Trade negotiations with the U.S. have yet to secure relief for exports following the postponement of 25% duties to August 1.

Shipping containers are seen at a port in Tokyo, Japan, March 22, 2017. REUTERS/Issei Kato/ File Photo
FILE - A car, center, is moved to another location of the area where export vehicles are parked at Daikoku Pier in Yokohama, near Tokyo, Tuesday, April 8, 2025. (AP Photo/Hiro Komae, File)
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Overview

  • Japan recorded a 2.2 trillion yen trade deficit in the first half of 2025, reversing a sequence of monthly surpluses
  • Exports slipped 0.5% in June from a year earlier, marking a second consecutive monthly decline after vehicles and other goods faced higher U.S. duties
  • Shipments to the U.S. fell 11% in June with automotive exports plunging 25%, and exports to China and Mexico dropped nearly 5% and 20%, respectively
  • President Trump postponed the planned 25% tariff increase on Japanese imports until August 1 to allow more time for negotiations, but no agreement has been reached
  • The economy contracted at an annualized rate of 0.7% in the first quarter, heightening political stakes ahead of Japan’s Upper House election