Japanese Exports: Updated Sept. 24, 2025.

Japanese exports to US fall 14% in Aug., down for 5th straight month

Article source: https://mainichi.jp/english/articles/20250917/p2g/00m/0bu/025000c

Ideas:

For most of the last 50 years Japan has depended on exports to help grow its economy as, for the most part, exports was its only real economic driver.

Japan should have known, for a long time, that it can't depend on export forever as the US tariff situation is going to significantly reduce some export products to the US.

Japan for whatever reason just hasn't been able to develop and other real economic drivers to help its economy, as for better or worse other industries in Japan just hasn't evolved into an economic driver that can grow the economy.

So might say foreign tourists, with it record numbers, might become an economic driver but so far, while its growing, it hasn't reached the level of a Spain or France yet in numbers needed to be a significant economic driver.

Japan has always been focused on maintaining as positive trade surplus, as while its a resource-poor country, its imports haven't yet reached the level of imports increasing more than exports which would make it a trade deficit county like the US.

The problem is the current account in Japan is dependent on exports to pad the current account, which is like a country's bank account and much of what it needs for programs comes out of its current account, not to mention that the Japanese yen currency situation is related to the current account.

Japanese exports to the US have been it most important export and along with car parts make up as significant part of the exports to the US.

Again, besides Japanese car and Japanese car parts, Japan really hasn't been able to develop any other significant exports that can grow the Japanese economy.

Back in the day, the 1980's for example, Japan had many companies that were global leaders but overtime all of these companies, except for Toyota have slipped and didn't innovate, including Sony and Mitsubishi which are not just shells of their former selves.

While the tariff rate was reduced to 15 percent that is still going to affect exports to the US, and when companies in the US and even Japan begin to pass-on the tariffs to the next in the supply chain including the final customer, customers are going to think twice about buying Japanese products, which is going to affect companies in Japan and of course Japanese workers which means they are not going to spend as much as before in Japan.

While the tariff situation is not so good the real problem is the required investments that countries are required to do in the US and for the most part, its out of control about when and where they can do the investing.

Not to complain or criticize but someone in the US administration just doesn't know or really care about the workings of international trade or international economics.

International trade makes everyone better off and its not a zero sum game where one person win and one person loses, as trade makes everyone better off, but again they of course know it but they don't care.

Yes, the tariff situation could affect many parts of the Japanese economy including wage hikes, future business investment, and or course consumer spending in Japan as Japanese workers might not get future increased wage hikes which means they might not spend as much in the Japanese economy.

For the most part, there is/was no way any country could see this coming a year ago, but it has been known for a long time the current president of the US wanted tariffs for the US economy but never really talked about it that much until this year.

The problem is, again, Japan has depended on exporting to the US for a very long time, and really hasn't been able to develop any other sectors which could help grow its economy.

At one time ship building was a major industry in Japan and as global leader but China and South Korea passed them and its a shell of it's former self.

And the same with semiconductors at one time, Japan was again a global leader but let Taiwan and South Korea gain significant market share related to semiconductors. To Japan's credit it has begun to invest heavily in the semiconductor sector again.

There is always going to be this friction between import and exports, as for the most part, there is never a positive flow related to both as some months imports will be up and some months they will be down and the same with exports.

But for the Japanese economy, as the Japanese yen is weak, its helps Japanese export companies as the weak yen gives them more for the product they sell in the US while the opposite is true for imports and a weak Japanese yen, increases the price of import into Japan, which means imports, most likely, will pass-on the prices increases to the next in supply chain including the final retail customer.

China, for better or worse, just hasn't been the country it was ten or even 15 years ago as many countries seem to be experiencing the same challenges.

But, again, for better or worse, China is still an export powerhouse and it still exports to many countries.

There was a recent article that said many German companies, which have manufacturing plants in China are now looking to move to Japan as they feel Japan is a more stable economy.

While Japan might be experiencing challenges with exporting to China it seems have a robust trade situation with the rest of Asia, as a 25. 3 percent increase in exports is a very significant situation for Japan.

But the same can't be said with the EU, as the EU seems like the sick child for international trade globally.

It could be related to the Ukraine war situation or it could be related to a few countries in the EU and not every county, as there are 27 countries in the EU and some of them might have positive trade situations with Japan and some might not.

Have a nice day!