Japan’s Exports to the U.S. Fall for Six Consecutive Months! “Headwinds” from Trump’s Tariffs Show No Signs of Abating

According to data from Japan’s Ministry of Finance, Japan’s exports to Asia in September increased by 9.2% compared to the same period last year, with exports to China rising by 5.8% year-on-year.

In contrast, Japan’s exports to the United States fell by 13.3%, marking the sixth consecutive month of year-on-year decline. This decline is attributed to the tariff policies implemented by U.S. President Donald Trump.

Breaking down the details, Japan’s exports of electronic components, such as semiconductors, increased by 12.6% year-on-year, primarily driven by strong demand from Asia. On the other hand, exports of automobiles and chips to the U.S. remained sluggish. Although the U.S. reduced tariffs on Japanese automobiles from 27.5% to 15% in mid-September, Japan’s automobile exports to the U.S. in September still fell by 24.2%, showing no reversal of the declining trend.

Analysts estimate that in the three months leading up to September, the impact of U.S. tariffs caused Japan’s economy to contract quarter-on-quarter for the first time in six quarters. This could potentially undermine the virtuous cycle of inflation, wage growth, and economic expansion that Japanese authorities are striving to build.

Regarding trade balance, Japan’s unadjusted trade deficit in September reached 234.6 billion yen (approximately $1.5 billion), with imports growing by 3.3% year-on-year, exceeding market expectations of 0.6%.

Sanae Takaichi is known for her conservative, nationalist-leaning views, but she is also regarded as an advocate for increased public spending. This stance has contributed to a recent broad rally in Japanese stocks.

Takaichi has also pledged to raise wages and implement more accommodative monetary policies, which would lead to a weaker yen, thereby benefiting Japan’s large export-oriented companies.

Trump is expected to visit Japan later this month and meet with Sanae Takaichi. In July, Trump announced a trade framework with Japan, under which the U.S. reduced tariffs on Japanese goods from 25% to 15%, while Japan committed to investing $550 billion in the United States and further opening its market to accept more American automobiles and rice.