Japan’s exports post biggest drop in 4 years amid US tariffs
Japan records biggest export decline in 4 years due to US tariffs
Japan’s exports post biggest drop in 4 years amid US tariffs
Japan’s exports fell 2.6% in July 2025, auto shipments to the US dropped 28%, and the nation posted its first trade deficit in months.
2025-08-20T08:20:01+03:00
2025-08-20T08:20:01+03:00
2025-08-20T08:20:01+03:00
Japan’s exports fell 2.6% year-on-year in July 2025, marking the sharpest decline in nearly four years, according to government data. The slump was driven largely by the impact of higher US tariffs, which continue to weigh heavily on the nation’s crucial auto sector.
Shipments to the United States dropped 10.1%, with auto exports plunging 28.4% and auto parts down 17.4%. In volume terms, the decline was smaller at 3.2%, showing Japanese carmakers are temporarily absorbing higher tariffs by holding prices steady.
Earlier this year, Washington raised tariffs on cars and parts to 25%. A July 23 trade deal cut them to 15% in exchange for a $550 billion Japanese investment package, but the new rate is still six times higher than the original 2.5%. That leaves Toyota, Nissan, and other manufacturers under sustained pressure.
Exports to China also slipped 3.5%, adding to the overall weakness. As a result, Japan recorded a trade deficit of ¥117.5 billion (about $795 million) in July, against expectations for a surplus.
Economists note that despite falling exports, Japan’s economy has remained resilient thanks to strong capital spending and Q2 GDP growth. Still, prolonged tariff pressure threatens the export-reliant model, and some analysts now expect the Bank of Japan could resume rate hikes as early as October.
japan exports 2025,us tariffs,japanese auto industry,toyota,nissan,trade deficit,japan economy
2025
Michael Powers
news
Japan records biggest export decline in 4 years due to US tariffs
Japan’s exports fell 2.6% in July 2025, auto shipments to the US dropped 28%, and the nation posted its first trade deficit in months.
Michael Powers, Editor
Japan’s exports fell 2.6% year-on-year in July 2025, marking the sharpest decline in nearly four years, according to government data. The slump was driven largely by the impact of higher US tariffs, which continue to weigh heavily on the nation’s crucial auto sector.
Shipments to the United States dropped 10.1%, with auto exports plunging 28.4% and auto parts down 17.4%. In volume terms, the decline was smaller at 3.2%, showing Japanese carmakers are temporarily absorbing higher tariffs by holding prices steady.
Earlier this year, Washington raised tariffs on cars and parts to 25%. A July 23 trade deal cut them to 15% in exchange for a $550 billion Japanese investment package, but the new rate is still six times higher than the original 2.5%. That leaves Toyota, Nissan, and other manufacturers under sustained pressure.
Exports to China also slipped 3.5%, adding to the overall weakness. As a result, Japan recorded a trade deficit of ¥117.5 billion (about $795 million) in July, against expectations for a surplus.
Economists note that despite falling exports, Japan’s economy has remained resilient thanks to strong capital spending and Q2 GDP growth. Still, prolonged tariff pressure threatens the export-reliant model, and some analysts now expect the Bank of Japan could resume rate hikes as early as October.
