The Trump administration’s higher tariffs continue to disrupt global commerce even as deals have been reached
[TOKYO] Japan’s exports fell for the fourth consecutive month as US President Donald Trump’s tariffs continued to cloud the prospects for global commerce, especially for trade involving the US.
Exports slipped 0.1 per cent in August from a year earlier, led by cars and steel, the finance ministry reported on Wednesday (Sep 17). That compared with a 2 per cent fall forecast by analysts. Japan saw the largest drop in the value of shipments to the US in more than four years.
Overall, Japan’s trade balance was in the red, with a 242.5 billion yen ($2.1 billion) deficit. Imports declined by 5.2 per cent, compared with the consensus estimate of a 4.1 per cent retreat.
The latest slide in Japan’s exports comes as companies around the world continue to absorb the shock from Trump’s trade policies. For export-reliant Japan, hits from trade put the country’s still fragile growth at risk.
The fall in overall exports was led by a 13.8 per cent drop in the value of shipments to the US with cars the main drag. Exports to China dropped 0.5 per cent and cargoes to Europe gained 5.5 per cent.
The Trump administration’s higher tariffs continue to disrupt global commerce even as deals have been reached. In late July, the US agreed to lower tariffs on imported Japanese cars to 15 per cent from 27.5 per cent, and to refrain from stacking previous tariffs on fresh 15 per cent universal tariffs, but those changes did not take effect until Sep 16.
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The blow to corporate finances could be a headache for the Bank of Japan (BOJ) as it continues to look for opportunities to raise the benchmark rate at a gradual pace. Robust wage growth has been a key element behind the BOJ’s policy normalisation steps thus far, and with inflation having hovered at or above its 2 per cent target for more than three years, speculation over a rate hike has persisted. BLOOMBERG
