Japan recorded a trade deficit for the fiscal year through March, marking its fourth consecutive year of deficits, according to the Finance Ministry’s provisional statistics. The total deficit amounted to 5.2 trillion yen ($37 billion). However, Japan achieved a significant surplus in trade with the U.S., which reached 9 trillion yen ($63 billion).
Exports to the U.S. have been a point of contention between Japan and the U.S., particularly with regard to President Donald Trump’s trade policies. Trump had announced plans to impose a 24% tariff on imports from Japan, which caused market turmoil. In response, Trump temporarily delayed the tariff implementation for 90 days but continued to escalate tariffs on Chinese goods to up to 145%.
Japan continues to face U.S. tariffs, including a 10% baseline tariff and a 25% tax on certain products like auto parts, steel, and aluminum. These duties have created significant challenges for Prime Minister Shigeru Ishiba’s administration. Some analysts speculate that Japan may eventually make concessions, such as importing more American rice, especially as Japan faces a domestic rice shortage driving up prices.
Japan’s total exports grew by 5.9% compared to the previous year, bolstered by strong shipments of products like computer chips and vehicles. Imports also increased by 4.7%, though the weakening of the yen made these imports more expensive. Additionally, the growing influx of foreign tourists has also contributed to higher export figures, as tourist spending is counted as an export.
In March, Japan recorded a trade surplus of 544 billion yen ($4 billion). Exports rose by nearly 4% from the previous year, marking the sixth consecutive month of growth. Exports to the U.S. increased by 3%, while shipments to other parts of Asia rose by 5.5%. However, exports to China declined, while exports to Hong Kong, Taiwan, and South Korea surged. Some economists suggest that this shift could be a result of Japan rerouting exports within Asia to avoid U.S. tariffs.
