TOKYO – Japan’s exports fell for the first time in eight months as the US tariff campaign weighed on global trade, raising the risk of a technical recession after the economy contracted at the start of 2025.
Exports measured by value dropped 1.7 per cent in May from a year earlier, led by cars, steel and mineral fuel, the Ministry of Finance reported on June 18.
That compared with the median analyst estimate of a 3.7 per cent decline. Imports dropped 7.7 per cent, led by crude oil and coal.
Japan’s trade balance stayed in the red for a second month, widening to a deficit of 637.6 billion yen (S$5.6 billion).
The drop in exports and the widening trade deficit add to concerns that Japan’s economy could shrink again in the second quarter, ushering in a technical recession.
Domestic consumption has remained weak as inflation continues to outpace wage hikes.
US President Donald Trump has imposed a 25 per cent tariff on imports of cars and auto parts, along with a baseline tax of 10 per cent on all other Japanese goods.
He also doubled a levy on steel and aluminium to 50 per cent in early June.
The levies will stay in place for now as Mr Trump and Japanese Prime Minister Shigeru Ishiba failed to reach a deal on the sidelines of the Group of Seven leaders’ summit after two months of bilateral negotiations.
The 10 per cent across-the-board tariff is set to revert back to 24 per cent on July 9, in line with announcements made in April.
Car exports to the United States tumbled 24.7 per cent in May.
Overall exports to the US fell 11.1 per cent while imports slumped 13.5 per cent, leaving Japan with a trade surplus of 451.7 billion yen.
The gap, which narrowed for the first time in five months, has made Japan a target in Mr Trump’s attempts to rebalance US trade with his tariff measures.
Meanwhile, Japan’s exports to China fell 8.8 per cent and those to Europe increased 4.9 per cent. Bloomberg
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