Exports to the U.S., the biggest market for Japanese goods, slumped 10.1% in July, compared to a 11.4% fall in June.
Japan’s exports slipped 2.6% in July, compared to a year earlier, as U.S. President Donald Trump’s tariffs continued to hit global trade.
According to a CNBC report, the decline was bigger than the 2.1% contraction expected by economists. The drop compared to a 0.5% fall in June, marking the steepest fall since February 2021.
Exports to the U.S., the biggest market for Japanese goods, slumped 10.1% in July, compared to a 11.4% fall in June.
The value of vehicle exports and auto parts fell 28.4% and 17.4%, respectively. In terms of volume, auto exports to the U.S. slipped by 3.2%. Japanese automakers are absorbing some of the tariffs to maintain their market share.
Earlier this year, the U.S. imposed 25% levies on Japanese steel, cars, and aluminum exports while also enacting a 10% tariff on most other goods. The steel tariffs were raised to 50% in June.
Retail sentiment on Stocktwits about the iShares MSCI Japan ETF (EWJ) was in the ‘bullish’ territory at the time of writing.
A Bloomberg report said it will take a while before the new, reduced rates agreed between the U.S. and Japan would take effect.
U.S. Commerce Secretary Howard Lutnick said on Tuesday that written documentation on the trade deals with Japan and South Korea is “weeks away.”
The weak exports could weigh on economic growth in the third quarter. Japan’s economy grew in the previous five quarters, but continued weak exports could cause a recession. It could also indicate that Japan’s central bank might take a more cautious stance toward benchmark interest rates.
The Asian country’s exports to China slipped 3.5% while total imports also fell 7.5% as inbound shipments of crude oil, coal, and liquefied natural gas fell by double-digit percentage points.
For updates and corrections, email newsroom[at]stocktwits[dot]com.<