Japan recorded a trade deficit of 2.2 trillion yen (around $15 billion) in the first half of this year, government data showed Thursday, as exports took a hit from President Donald Trump’s tariffs.
In June, Japanese exports fell 0.5% year-over-year, pressured by a 25% tariff on vehicles and other goods. Although Trump delayed the full implementation of this higher tariff until August 1 to allow for trade talks, no agreement has been reached so far.
June exports totaled nearly 9.2 trillion yen ($62 billion), marking the second consecutive month of decline. Meanwhile, imports increased slightly by 0.2% to 9 trillion yen ($61 billion), leaving a modest trade surplus of 153 billion yen (just over $1 billion) for the month. This followed a trade deficit of 637.6 billion yen ($4.4 billion) in May.
Exports to the U.S. plunged 11% in June, with vehicle shipments down 25%. Shipments to China fell nearly 5%, and exports to Mexico, an important auto assembly hub for Japanese manufacturers in North America, declined almost 20%.
For the first six months, Japan’s exports reached 53.4 trillion yen ($360 billion), up 3.6%, while imports rose 1.3% to 55.6 trillion yen ($375 billion).
Trade discussions between Japan and the U.S. continue, with Japanese officials emphasizing the strong alliance between the two countries. Trump has zeroed in on rice, a sector Japan has traditionally shielded to protect food security. Japan imports over 300,000 tons of U.S. rice annually, though some of it is used for animal feed.
Japan is gearing up for an Upper House election on Sunday. With public support for Prime Minister Shigeru Ishiba’s administration slipping, the ruling Liberal Democratic Party, which is conservative and pro-business, risks losing its majority unless it forms a new coalition partner.
Economic growth in Japan slowed, with the economy contracting at an annualized rate of 0.7% in the first quarter, partly due to weakening exports.
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