Japan’s exports fell for the second month in a row in June as U.S. tariffs began to weigh on its manufacturing sector, with shipments to the United States dropping sharply.
Exports declined 0.5% in June from a year earlier, following a 1.7% decrease in May. Shipments to the U.S. fell 11.4%, the largest monthly drop since February 2021.
The fall was led by a 26.7% decline in automobiles, a 15.5% drop in auto parts, and a 40.9% fall in pharmaceutical products.
Washington plans to impose 25% tariffs on Japanese imports beginning August 1 unless a new trade agreement is reached. Japan had tried to focus negotiations on removing existing 25% tariffs on automobiles before a temporary pause on the country-specific tariffs expired on July 9, but no deal was made.
Despite the drop in export value, the volume of automobile shipments rose 3.4%, suggesting that Japanese automakers are absorbing costs to stay competitive. Japan exported 21 trillion yen worth of goods to the U.S. last year, with cars making up about 28% of the total.
Japan’s trade surplus with the U.S. fell 22.9% in June to 669 billion yen ($4.51 billion). Exports to China also declined by 4.7%, while overall imports increased slightly by 0.2%.
The country recorded a trade surplus of 153.1 billion yen ($1.03 billion) in June, lower than expected. Japan’s economy contracted in the first quarter as rising prices hit domestic demand, and pressure from U.S. tariffs is likely to increase in the coming months.
