TOKYO (AP) - Japan's exports experienced a decline in May, with shipments of automobiles to the United States plummeting by nearly 25% compared to the same month last year. This drop has been attributed to the higher tariffs imposed by former President Donald Trump.
According to the Finance Ministry's report on Wednesday, overall exports fell by 1.7% year-on-year, which was a smaller decrease than analysts had anticipated. Meanwhile, imports also saw a significant reduction, dropping 7.7% as a result of weakened domestic demand. This decline in imports surpassed the 2% decrease recorded in April.
The trade deficit for Japan in May was recorded at 637.6 billion yen, equivalent to approximately $4.4 billion. This figure underscores Japan's ongoing struggles with its trade dynamics in the face of tariff pressures.
To date, Japan has not reached a satisfactory agreement with Trump regarding the tariffs. Prime Minister Shigeru Ishiba disclosed after attending the Group of Seven summit in Canada earlier this week that discussions between the two countries had hit roadblocks, with no consensus reached on several points related to trade.
The tariffs imposed by Trump include a steep 25% additional duty on Japanese automobiles and a 24% tariff on other imported goods. Trump has even suggested the possibility of increasing the auto tariffs, adding to Japan’s economic unease.
Prime Minister Ishiba has emphasized Japan’s status as a crucial ally within a significant bilateral defense partnership with the United States, making it clear that he is advocating for the protection of Japan's national interests amid rising trade tensions.
The automobile industry is a critical component of Japan's economy, with the country exporting over one million vehicles to the United States annually. Japan's government has consistently highlighted that major automakers, such as Toyota and Honda, have manufacturing plants in North America, thereby contributing significantly to the local economy and job creation.
This ongoing trade tension and the resultant economic implications are closely monitored by various stakeholders, as they could have lasting effects on both nations' economic performances and trade relationships moving forward.
Yuri Kageyama, The Associated Press
