Japanese exports to the United States have fallen by 5.2 percent in July, according to various reports. Experts accounted for this massive fall to the cuts in terms of auto shipments. The decline drastically narrowed Japan's trade surplus by 22.1 percent over its Western partner.
According to official figures, the July drop in terms of exports follows a 0.9 percent drop in June. The export drop also caused Japan's surplus with the U.S. to hit 502.6 billion Yen or $4.5 billion. With regards to global trade, Japan posted a 231.2 billion Yen deficit, a figure attributed by many experts as an effect of higher crude oil prices in the previous month.
Japan's auto export to the U.S. is also seeing a slight drop. U.S.-bound auto shipments from Japan saw a 7 percent drop in sales in July. Many economists saw this drop as one of the major factors that had affected Japan's overall export drop, rather than the current tense global trade.
The mood of the U.S. in terms of global trade is also foreseen by many to have a drastic impact on the future of Japanese export. The Western superpower is already waging a bitter trade war against China, and U.S. President Donald Trump has repeatedly stated that he will be targeting other Asian markets as well.
In a statement acquired by Reuters, Norinchukin Research Institute chief economist Takeshi Minami said that the growing tension in terms of U.S. trade policy causes car sales in the country to drop. This has a direct effect on Japan's car export to the U.S. as well.
This hint of trade protectionism is expected to have a huge negative effect on global trade. In May, President Trump said that he is considering raising auto tariffs to as much as 25 percent. SMBC Nikko Securities economist Junichi Makino said that these huge tariffs will seriously hurt Japanese exports to America.
Despite the recent drop in terms of export, Japan's overall export performance is still on the positive side. This is due to the recent uptick of demand for semiconductor components and microprocessor equipment from China.
While Japan's trade with the U.S. faces a sluggish progress, its trade with neighboring China is flourishing. Recently released figures show that Japanese exports to China have increased 11.9 percent. This is the fifth straight year-on-year increase in terms of trade between the two countries.
