Japan racks up trade deficit amid threat from Trump's tariffs
By YURI KAGEYAMA
Japan sank into a trade deficit of 2.2 trillion yen ($15 billion) for the first six month of this year, according to government data released Thursday, as exports were hit by President Donald Trump's tariffs.
In June, Japan's exports slipped 0.5% from a year earlier after its shipments of vehicles and other products were slapped with a 25% tariff. Trump has postponed implementing that higher import duty until Aug. 1, to allow time for negotiations but so far no deal has been reached.
Exports in June totaled nearly 9.2 trillion yen ($62 billion), in the second straight month of declines. Imports in June rose 0.2% to 9 trillion yen ($61 billion), the Finance Ministry said. That left a trade surplus of 153 billion yen (just over $1 billion). The trade deficit in May was 637.6 billion yen, or $4.4 billion.
Japan's exports to the United States fell 11% in June, with auto exports plunging 25%. Shipments to China decreased by nearly 5%. Exports to Mexico, a major auto assembly hub for North America for Japanese automakers, fell nearly 20%.
In the first half of the year, Japan's exports totaled 53.4 trillion yen ($360 billion), up 3.6%, while imports rose 1.3% to 55.6 trillion yen ($375 billion).
Japan and the U.S. have been holding trade talks, with Japanese officials stressing that Japan is a key U.S. ally.
Trump has focused on rice, a sector traditionally protected from foreign competition for the sake of Japan's food security. Japan imports more than 300,000 tons of rice a year from the U.S., according to various data, although some of that is used for animal feed.
Japan will hold an election for the Upper House of Parliament on Sunday. Given falling public support for Prime Minister Shigeru Ishiba's administration, the conservative and pro-business ruling Liberal Democratic Party could lose its majority unless it gains another coalition partner.
Japan's economy contracted at an annual rate of 0.7% in the first quarter of this year compared to the previous quarter, partly due to slowing exports.
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