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Japan’s exports fell at their fastest pace in over four years last month, as U.S. tariffs imposed under former President Donald Trump continued to impact key sectors, official data revealed on Wednesday.
According to figures released by the Ministry of Finance, Japanese exports declined 2.6% year-on-year in July, marking the steepest drop since early 2021. The decline was driven largely by a 10.1% plunge in exports to the United States, Japan’s second-largest trading partner.
Exports of motor vehicles-cars, buses, and trucks-dropped sharply by 28.4%, while auto parts exports fell by 17.4%, underscoring the heavy toll on Japan’s automobile industry.
The sharp decline follows years of escalating trade tensions during the Trump administration, which introduced sweeping tariffs on imports as part of an “America First” strategy aimed at boosting U.S. manufacturing and curbing the country’s trade deficit.
Japan, despite being a close ally of the U.S., was not spared. The Trump-era tariffs included a 10% across-the-board import tax and an additional 27.5% tariff on Japanese-made cars. These measures hit Japanese automakers such as Toyota, Honda, and Nissan, whose global supply chains are deeply linked to the American market. The auto industry supports around 8% of Japan’s workforce.
Last month, Tokyo secured a partial trade agreement with Washington that reduced a previously threatened 25% “reciprocal” tariff to 15% and cut the car tariff rate to 15%. However, to the frustration of Japanese officials, the revised rates have yet to come into effect.
Despite the export slump, Japan’s broader economy showed signs of resilience. GDP data released last week indicated that the world’s fourth-largest economy posted a better-than-expected annualized growth of 1.0% in the second quarter.
Still, analysts warn that ongoing trade uncertainties and delayed tariff relief could continue to pressure Japan’s export-driven economy in the months ahead.
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