Japan Faces Trade Deficit as US Tariffs Impact Auto Exports
In May, Japan's exports declined by 1.7% year-on-year, principally due to a significant drop in auto shipments to the US following increased tariffs by President Donald Trump. Despite ongoing trade talks, Japan's trade deficit reached 637.6 billion yen, as auto industry exports face uncertainty.
- Country:
- Japan
Japan's export figures took a hit in May, as shipments of automobiles to the United States plunged by nearly 25% compared to the previous year. This decline is largely attributed to the imposition of higher tariffs by US President Donald Trump, as reported by Japan's Finance Ministry on Wednesday.
Overall exports fell by 1.7% from the previous year, which turned out to be less severe than analysts' predictions. Imports, however, dropped by 7.7%, signaling a weakening in domestic demand and marking a steeper decline than the 2% drop recorded in April. The trade deficit for May stood at 637.6 billion yen, equivalent to $4.4 billion.
Trade negotiations between Japan and the United States remain unresolved. Prime Minister Shigeru Ishiba acknowledged issues in reaching an agreement with President Trump during their recent meeting. Japan stresses its role as a key US ally and its significant contribution to the North American economy through automakers like Toyota and Honda, which have substantial operations in the region.
(With inputs from agencies.)
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- Shigeru Ishiba
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