Japan's exports to US decline as tariffs weigh on trade

Japan’s exports to the United States fell sharply in December and declined overall last year, official data showed on Thursday, highlighting the impact of higher tariffs on trade between the two countries.

Exports to the US dropped 11.1 percent in December compared with a year earlier, while shipments for the full year fell 4.1 percent. The slowdown contributed to a 12.6 percent drop in Japan’s trade surplus with Washington, which stood at 7.5 trillion yen, or about $47 billion, according to figures from the finance ministry.

The ministry said the weaker surplus was driven mainly by a fall in exports of cars and auto parts, alongside increased imports of liquefied petroleum gas, cereals and power-generating machinery from the United States.

In December alone, Japan’s exports to the US totalled 1.81 trillion yen, with the bilateral trade surplus shrinking 31.7 percent to 690.6 billion yen.

Tokyo and Washington agreed in July to a trade deal that reduced tariffs to 15 percent from a previously feared level of 25 percent. The cut was particularly significant for the auto sector, which accounted for around 30 percent of Japan’s exports to the US in 2024.

Despite the reduction, Japanese officials and business leaders have said the current tariff rate remains high compared with levels before the second administration of US President Donald Trump.

Japan’s overall trade balance recorded a deficit of 2.65 trillion yen in 2025, marking the country’s fifth consecutive annual trade deficit.