Japan racks up trade deficit amid threat from 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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Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama
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Politico
a minute ago
- Politico
Vodka Toasts With the Dictator of Belarus: How Diplomacy Gets Done in Trump 2.0
A bus carrying 14 political prisoners with bags over their heads hurtled through the lush Belarusian countryside one morning last month, its destination unknown. Five years after President Alexander Lukashenko launched an unsparing crackdown on dissent in the former Soviet nation, some of the captives feared they were about to be executed. Among the group was the prominent dissident Siarhei Tsikhanouski whose wife, Sviatlana Tsikhanouskaya, became the face of the Belarusian opposition movement after his arrest in 2020. As the bus approached its destination, their minders from the Belarusian security services — which still goes by its Soviet name the KGB — removed the bags from their heads but told them to keep their eyes fixed on the floor. 'We kept looking ahead all the same,' said Ihar Karnei, a Belarusian journalist who was among the group and had been imprisoned for two years. 'We were interested: Where were they taking us?' The bus pulled up to a field not far from Belarus' border with Lithuania. The door of the van flew open, and they received a surprising greeting: 'President Trump sent me to take you home.' The man speaking to the bewildered prisoners was John Coale, one of President Donald Trump's lawyers and now a deputy special envoy to Ukraine. It took a moment for the reality of what was happening to sink in. 'They were terrified,' Coale recalled in an interview with POLITICO Magazine. 'Opening that door and getting them to realize that 'You are free' was quite a moment.' The prisoner release, a goodwill gesture by the Belarusian leader, marked the continuation of a cautious diplomatic opening between the United States and Belarus. The fraught relationship between the two countries came to a standstill in 2020 when protests against rigged elections were met with mass arrests and thousands of people were swept into the country's vast prison system. But the release also wouldn't have happened without Coale's efforts to forge a relationship with Lukashenko, including over a long lunch with vodka toasts. 'I did two shots, didn't throw up, but did not do a third one,' said Coale. The episode offers a window into the highly personalistic way in which foreign policy gets done during Trump's second term in office, as the president has tapped a slew of close friends and allies to serve as his envoys and implement his agenda abroad. Critics have balked at their lack of experience; after all, they smirk, can real estate magnate Steve Witkoff really lead negotiations to conclude Russia's war on Ukraine, tackle Iran's nuclear program and end Israel's war in Gaza? But the envoys bring the prospect of a direct line to the president and the chance to bypass State Department bureaucracy. They are also free to say and do things that traditional U.S. diplomats might not be able to. 'It's sort of easier to have an eye-to-eye conversation with the president's right hand,' said Artyom Shraibman, a nonresident scholar at the Carnegie Endowment for International Peace. Dispatching the national security advisor or secretary of State (currently Marco Rubio in both cases), could be seen as a full legitimization of Belarus' isolated president, said Franak Viacorka, chief of staff to Tsikhanouskaya, the opposition leader. 'But if we speak about envoys — an envoy's task is to make deals, to solve crises,' he said. Coale's adventures in Belarus began with a call from the State Department in late April with a special request. Was he willing to go to Minsk to meet with Lukashenko, a man often described as Europe's last dictator? 'Fine,' said Coale. Could he fly out the next day? 'Not fine,' he replied. 'But I did it anyway.' The 78-year-old Coale is a plainspoken, veteran litigator perhaps best known for helping to broker a $386 billion settlement from Big Tobacco in the late 1990s. He's also had a winding political life; a longtime Democrat, Coale endorsed John McCain in 2008 and befriended Sarah Palin, before backing Democrat Martin O'Malley's 2016 presidential bid. In 2021, he led Trump's longshot lawsuit against social media companies, accusing them of censorship. 'The woke stuff has moved me to the right,' he said in one interview. He first met Trump some 20 years ago through his wife Greta Van Susteren, the former Fox News host who has interviewed the president on numerous occasions. Days after the call, Coale and a handful of U.S. diplomats crossed the border from Lithuania into Belarus, stopping on a country road to swap out the diplomatic license plates on their vehicles so as not to attract attention. They arrived at Independence Palace, Lukashenko's residence in central Minsk which, with its glass facade and swooping metal roof, is the size of a small airport terminal. 'It's so big that Tom Brady couldn't throw a pass from one end of the lobby to the other,' Coale said. The imposing complex on the capital's Victory Avenue was built as a symbol of the country's independence, according to the website of the Belarusian president. That sovereignty was always tenuous. One of Russian President Vladimir Putin's closest allies, Lukashenko has long relied on subsidies from Moscow to prop up his ailing economy. In 2022, Belarus was used as a staging ground for Russian troops in their full-scale assault on Ukraine which further cemented his alienation from the West. Lukashenko has ruled Belarus since 1994, preserving many of the institutions and habits of the country's Soviet past. He has proven skilled at playing Russia and the West off against each other, flirting with Washington and Brussels to get Putin's attention or secure relief from economic sanctions imposed on the country. Political prisoners have often been used as a bargaining chip. In 2015, Lukashenko released all those deemed wrongfully detained, prompting Europe and America to lift some sanctions. The reprieve was to be short-lived. Over 5,000 people have been convicted of politically motivated charges over the past five years, according to the Belarusian human rights organization Vyasna, and some 1,150 remain in prison. Trump has made freeing wrongfully detained Americans a priority of his foreign policy, creating an opening for authoritarian leaders like Lukashenko to get his attention. Within a week of Trump's inauguration in January, Belarus unilaterally released U.S. citizen Anastasia Nuhfer from prison. 'Lukashenko is afraid of Trump,' said Viacorka. '[He] knows very well how to deal with ordinary politicians, but he doesn't have a clue how to deal with these strong and unpredictable leaders like Trump.' Three more political prisoners were released in February, after Deputy Assistant Secretary of State Chris Smith quietly travelled to Belarus, becoming the most senior U.S. official to visit the country in over five years. By April, they were on the cusp of getting another American citizen released and dispatched Coale in a bid to seal the deal. Over a long lunch in the palace, Coale was tasked with getting to know the garrulous Belarusian leader. 'They told me to charm him. To yuck it up with him, so I did that,' he said. '[Lukashenko] brought up stuff about the State Department and I said, 'Yeah all they want to do is blah blah blah,' so he loved that.' Lukashenko struck Coale as smart, savvy. 'He does want better relations with the United States,' Coale said, adding that the Belarusian leader seemed keen to play a role in negotiations regarding the war in Ukraine. At some point vodka — Lukashenko's own personal brand — was brought out and the toasts commenced. The Belarusian president offered a toast to Trump. Smith, the State Department official, nudged Coale to reciprocate, as is customary in the region. Coale followed suit with his own toast to Lukashenko, and soon, he began to worry about his stomach. As the afternoon wore on there were more toasts, and while there was little talk of politics, the two men got to know each other. A relationship was developing. 'It was all fun,' Coale said. Lukashenko seems to have agreed. Hours later, the American delegation got what they had come for as the Belarusian authorities handed over Youras Ziankovich, a naturalized U.S. citizen who was arrested in Moscow in 2021 and accused of plotting a coup against Lukashenko. The U.S. government deemed him wrongfully detained earlier this year. Discussions continued behind the scenes into the summer and by June, another prisoner release was set in motion. When she awoke on the morning of Saturday June 21, Sviatlana Tsikhanouskaya had little idea that she was about to be reunited with her husband, Siarhei. A popular YouTube blogger, he was swiftly arrested after attempting to run against Lukashenko in the 2020 presidential elections. Tsikhanouskaya, a soft-spoken former teacher, took up her husband's mantle after his arrest and was herself quickly forced into exile in Lithuania, becoming the most recognizable face of the Belarusian opposition. For five years she has shuttled between global capitals to raise awareness about her country's political prisoners, often carrying a folder bearing a photograph of her husband. On the morning her husband was released, Tsikhanouskaya was flying back from Poland to the Lithuanian capital, Vilnius. She knew that Trump's special envoy to Ukraine, Keith Kellogg, had been in Belarus the night before with Coale and that negotiations about a prisoner release were underway. She speculated with her chief of staff, Viacorka, who might be released but didn't dare expect her husband would be included. Having been held without access to anyone on the outside for over two years, Siarhei was on a shortlist of some 200 prisoners deemed a priority for release by Belarusian human rights defenders on humanitarian grounds. The majority of the 14 people who were about to be released were citizens of other countries who had been swept up in the crackdown, or, had some kind of affiliation with the West. It wasn't until the morning of the release that Coale learned the final details of the prisoners to be freed. As Tsikhanouskaya made her way back to Vilnius, the bus carrying her husband and 13 other political prisoners made its way to the Belarusian border with Lithuania, after the KGB handed them over to Coale and representatives from the State Department. By the time the now-former prisoners made it to the border, it was hours since they had been fed. Many were gaunt after years of meager prison rations. Siarhei, once a bear of man, emerged from prison unrecognizable with hollow cheeks. 'For some reason, in one of our cars was a whole basket of little Tootsie Rolls,' said Coale, which they passed around the group. As they waited to be processed into the country, Coale and the other diplomats passed their cellphones around so people could call their loved ones and let them know that they had been released. 'Nobody had any idea this was happening,' he said. In the Vilnius airport, Tsikhanouskaya received a call from her husband, with whom she hadn't had any contact in over two years. 'When I heard the voice of my husband on the phone, it was a huge surprise,' she said. He told her: 'My dear, I am free.' While Trump's efforts to broker an end to the war in Ukraine have run headlong into Putin's intransigence, Tsikhanouskaya hopes that her country could offer the diplomatic victory that Trump craves so dearly. 'Belarus can be a success story for President Trump,' she said. '[A] free, independent Belarus is in the interest of the USA as well.' Lukashenko also senses an opportunity to return to relevance as the U.S. president seeks to strike a deal between Russia and Ukraine, said Shraibman of the Carnegie Endowment. 'He wants to be relevant to the peace process. He wants to speak to the big guys. This is a prize in itself.' But Belarus isn't Switzerland. 'Lukashenko is so, so deeply dependent on Putin and Russia these days that it is simply beyond the power of the United States, no matter how hard it tries, to decouple these two countries,' Shraibman said. Coale isn't too preoccupied with Lukashenko's diplomatic dance. 'That's for Rubio to worry about.' 'I look at the thing of, can I free some more people,' he told me. 'And if it plays into my purpose and what I'm trying to do, I don't care.'
CNBC
a minute ago
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Earnings playbook: The reporting season heats up with Alphabet and Tesla on deck
The corporate earnings season heats up this week with some of the largest companies in the world set to report. More than 100 S & P 500 names are scheduled to post their latest quarterly figures, including Tesla, Alphabet and Coca-Cola. Those numbers come after a solid start to the reporting period. Of the roughly 59 S & P 500 names that have posted results, 86% have topped expectations, according to FactSet. Among those are Goldman Sachs and JPMorgan. Take a look at CNBC Pro's breakdown of what to expect in this week's key reports. All times are ET. Tuesday Coca-Cola is set to report earnings before the bell, followed by a conference call at 8:30 a.m. Last quarter: KO maintained its full-year outlook and said it expects tariff disruptions to be "manageable." This quarter: Analysts polled by LSEG expect roughly flat year-over-year earnings and revenue from the beverage giant. What to watch: Investors will look for updates on whether the company will move forward with a plan to switch to cane sugar from high fructose corn syrup for its drinks the U.S. — like President Donald Trump announced last week. "We appreciate President Trump's enthusiasm for our iconic Coca-Cola brand," the company said in a statement. "More details on new innovative offerings within our Coca-Cola product range will be shared soon." What history shows: Data from Bespoke Investment Group shows the company has beaten earnings expectations for five straight quarters. Wednesday Chipotle Mexican Grill is set to report earnings after the close, followed by a call at 4:30 p.m. Last quarter: CMG said it was seeing a "slowdown" in consumer spending . This quarter: Analysts see a slight decline in year-over-year earnings for the fast casual chain, LSEG data shows. What to watch: BMO upgraded Chipotle last week ahead of the company's earnings report, expecting strong results in the latter half of 2025. "We expect improving absolute performance and a widening gap to the industry to warrant a higher multiple," BMO said . What history shows: Chipotle has a strong track record around earnings. Bespoke data shows the company beats earnings estimates 78% of the time. The stock also averages a 1.6% advance on earnings days. Alphabet is set to report earnings after the closing bell, with a call slated for 4:30 p.m. Last quarter: GOOGL reported earnings and revenue that easily beat analyst expectations. This quarter: The Street sees double-digit earnings and revenue growth for Google's parent company, per LSEG. What to watch: BofA's Justin Post raised his estimates on Alphabet last week, calling for an earnings beat. "2Q positives could include: 1) Commentary suggesting ad spend has accel. since April, 2) Strong search results suggesting AI integration aiding monetization (lowering rev. reset risk), 3) YouTube beat on easy y/y comps, and 4) Cloud strength from added capacity & Workspace AI integration," he said in a note. What history shows: Alphabet earnings have beaten expectations for nine straight quarters, per Bespoke. Shares also average a 1.3% advance on earnings days. IBM is set to report earnings after after the close, followed by a conference call at 5 p.m. Last quarter: IBM maintained its full-year guidance and posted first-quarter earnings and revenue that beat expectations . This quarter: Analysts polled by LSEG expect year-over-year earnings to have grown by nearly 9%. What to watch: Morgan Stanley analyst Erik Woodring raised his price target to $253 from $233, though he kept his rating at equal weight. "Our Software and Consulting trackers lean cautiously ahead of 2Q earnings, but a weak USD supports CY25 FCF upside vs. Street. At $283, we believe FCF upside is already priced in, thus we lean tactically cautious into 2Q EPS; though 2Q is unlikely to fully break stock momentum," he said. What history shows: IBM beats earnings expectations 84% of the time, according to Bespoke. However, the stock averages a 0.5% slide on earnings days. Tesla is set to report earnings after the bell. A call with analysts and management is set for 5:30 p.m. Last quarter: TSLA reported a 20% drop in auto revenue, driving a first-quarter miss . This quarter: LSEG data shows analysts expect the electric vehicle maker to report a 20% year-on-year earnings decline. What to watch: Investors might not know what to expect from Tesla's report. Barclays analyst Dan Levy, who has an equal weight rating on shares, said the setup into the Q2 print is "confusing." He pointed to weak fundamentals for the company, but added that Tesla could get a boost from its conference call, which presents an opportunity for the company's "robotaxi/AV narrative to shine." What history shows: Tesla shares have risen after the past two earnings releases despite the company missing analyst expectations.
CNBC
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Bangladesh signs U.S. wheat-import deal in bid to curb tariff pressure
Bangladesh signed a deal on Sunday to import 700,000 metric tons of wheat annually from the United States over the next five years, in a move aimed at securing tariff relief from the Trump administration amid growing trade tensions, officials said. The agreement — formalized through a memorandum of understanding inked in Dhaka between the Ministry of Food and trade group U.S. Wheat Associates — comes at a critical moment, with Washington set to impose a 35% tariff on Bangladeshi exports from August 1. Officials in Dhaka hope the pact will help narrow Bangladesh's $6 billion trade deficit with the U.S. and pave the way for more-favorable treatment of key export items, particularly garments, which dominate shipments to the United States. Bangladesh's de facto food minister, Ali Imam Majumder, said at the signing ceremony that the agreement would not only ensure a steady supply of high-quality wheat at competitive prices but also strengthen trade ties between the two nations. "This step reflects our willingness to build mutual trust and deepen economic cooperation with the United States," he said. The U.S. tariff hike has rattled Bangladesh's export sector, especially the ready-made garments industry, which fears losing competitiveness in one of its largest markets. The wheat initiative is widely seen as part of a broader diplomatic and trade strategy to soften Washington's stance and open the door for further negotiations. Officials from the Ministry of Commerce said talks are ongoing with U.S. counterparts in an effort to lower the duty, arguing that such high tariffs could significantly undermine Bangladesh's competitiveness in the American market. Bangladesh imports around 7 million metric tons of wheat each year, with the bulk sourced from the Black Sea region due to its lower cost. Smaller volumes of higher-quality wheat, including some from the United States, are also imported for blending.
