Japan experienced a contraction in exports for the first time in four years this July. Exports declined 2.6% on an annualized basis, falling beneath the median forecast of a 2.1% contraction, according to the Ministry of Finance.
As with Canada, tariffs have caused a downturn in the auto sector. Autos, auto parts, and steel saw the steepest decline since February 2021. “Car shipments to the US have started to decline in volume, suggesting that the impact of tariffs is finally starting to show,” said Taro Saito, head of economic research at NLI Research Institute. “In the US, prices of Japanese exports began rising around June or July, so we’re now seeing the effects of Japanese goods gradually losing their price competitiveness.”
Japanese exports to the US fell 10.1% in July YoY, with vehicles sharply falling by 28.4% and auto parts by 17.4%. Tariff discussions are ongoing, with some progress made in July. However, nothing has been set in stone, and the uncertainty is clearly reflected in trade.
The decline expanded beyond the US—tariffs are not the only culprit. Exports from Japan to China fell by 3.5%, with orders to Europe falling 3.4%. Demand is waning. Europe is experiencing a recession already, and China has boosted its manufacturing capacity to the point where it does not need to rely as strongly on exports. US tariffs are certainly playing a TEMPORARY role in world trade, but we must look at the macro trend rather than singling out a momentary policy adjustment.
Click this link for the original source of this article.
Author: Martin Armstrong
This content is courtesy of, and owned and copyrighted by, https://www.armstrongeconomics.com and its author. This content is made available by use of the public RSS feed offered by the host site and is used for educational purposes only. If you are the author or represent the host site and would like this content removed now and in the future, please contact USSANews.com using the email address in the Contact page found in the website menu.
