According to the data shown by govt. Japan exports have declined in the month of August as US Tariffs hit hard on the country’s automotive and other manufacturing sectors. The aggregate exports by value have reduced 0.1% year on year in August the data showed, less than a median market forecast for a 1.9% decrease and following a 2.6% fall in July.
What did the Chief Japan economist at Mizuho Research says about Japan exports and US tariffs?
Saisuke Sakai, Chief Japan economist at Mizuho Research, said that Japanese automakers are still mostly absorbing the US tariff costs by cutting export prices to maintain U.S. sales volumes. He added that, but some of them, unable to withstand rising costs, have begun increasing prices to pass them on to consumers. Furthermore, he stated: “Coupled with growing uncertainties over the U.S. economy, the US tariff effect on Japan exports and output is set to sharpen towards the year-end”.
Japan Exports to USA
Japan Exports to USA plummeted around 3.8% in August from a year earlier, representing the largest fall since February 2021, dragged down by a 28.4% fall in automobiles and a 38.9% drop in chipmaking equipment. The volume of U.S.-bound shipments fell 12.0%, extending the 2.3% decline seen in July. Moreover, Japan exports to China. Exports dropped by 0.5%, whereas those to Asia and the European Union rose, minutely balancing the drop in Japan exports to the USA However, the effect is significant, especially for Japanese automakers and auto parts suppliers, as the tax is still multiple times higher than their earlier 2.5% rate. Bank of Japan Governor Kazuo Ueda has determined to lower the hiking rates due to uncertainty over the impact of U.S. tariffs on Japan’s economy.