Japan’s exports to the United States declined nearly 2% in April, marking a setback for the country’s largest single trading relationship, as elevated trade tariffs imposed by the Trump administration weighed heavily on the automotive sector. The broader impact saw Japan register a trade deficit for the first time in three months, with the Ministry of Finance reporting a shortfall of JP¥115.8 billion (€710 million), compared to a surplus of JP¥504.7 billion (€3 billion) in the same month last year.
The United States currently imposes a 25% tariff on imported automobiles, one of Japan’s primary exports, which has significantly dampened demand. Although some tariff measures have been relaxed, elevated duties on steel and aluminium remain, affecting Japan’s industrial shipments.
Vehicle exports to the U.S. dropped by almost 6% year-on-year in April, reflecting the broader pressure on Japan’s automakers, who rely heavily on diversified production hubs in countries like Mexico and Canada. According to S&P Global Ratings, regional carmakers are also facing higher operating costs and revenue risks due to the complex supply chains linking their U.S. sales to international manufacturing bases.
Overall, Japan’s global exports grew a modest 2% in April, down from 4% in March, while total imports declined by 2.2%. Imports from the U.S. alone plunged over 11%, further straining bilateral trade ties. The yen’s recent appreciation against the dollar, from JP¥155 to around JP¥144, has also diminished the value of export revenues in yen terms.
This economic slowdown follows a 0.7% contraction in GDP in the previous quarter, intensifying concerns about growth prospects. Earlier gains in exports, attributed to businesses racing to pre-empt the phased tariffs under Trump’s second term, have begun to taper off.
While exports to Southeast Asia have shown some resilience, Japan continues to press Washington for tariff relief. Economic Revitalization Minister Ryosei Akazawa, Japan’s lead negotiator on trade issues, is expected to travel to the U.S. over the weekend for the third round of talks aimed at easing trade tensions.
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