Japan's auto exports to US drop after tariffs
Cars of Subaru Corporation are seen parked at Kawasaki Port in Kawasaki of Kanagawa Prefecture, south of Tokyo on Aug 15, 2024. (File photo: AFP/Philip Fong)
TOKYO: Japanese auto exports to the United States fell almost a quarter in May, data showed on Wednesday (Jun 18), as worries over Donald Trump's tariffs grow with Tokyo and Washington yet to strike a deal.
Roughly eight per cent of jobs are tied to the auto industry in Japan, which is home to the world's top-selling carmaker Toyota as well as Honda, Nissan and other giants.
The government is seeking relief from the 25 per cent US vehicle tariffs and other trade levies, but no agreement has been reached despite several rounds of talks.
Japan posted a trade deficit for the second straight month in May, with imports exceeding the value of exports by ¥637.6 billion (US$4.4 billion).
To the United States specifically, exports fell around 11 per cent, with automotive exports down 24.7 per cent on-year, finance ministry data showed.
"Car exports to the United States in May declined both by volume and value, but the impact of lower prices is overwhelmingly large," NLI Research Institute's Taro Saito said, adding that export volume declined 3.9 percent.
"It appears that automakers are making large-scale price cuts so as to absorb the cost of the tariffs," he added.
Japan, a key US ally and its biggest investor, is subject to the same 10 per cent baseline tariffs imposed on most nations plus steeper levies on cars, steel and aluminium.
Trump also announced an additional 24 per cent "reciprocal" tariff on Japan in early April but later paused it along with similar measures on other countries.
In Canada after the G7 summit, Prime Minister Shigeru Ishiba told reporters that US tariffs were "hitting many Japanese companies' profits".
The situation "could have a grave impact on both Japan and the United States as well as the world economy, directly and indirectly", he warned.
Ishiba held face-to-face talks with Trump on Monday but no breakthrough on the trade impasse was announced.
"As there are still some points where both sides disagree, we have not reached an agreement on the package as a whole," he said.
"I had frank discussions with President Trump, and we agreed to instruct the relevant cabinet members to advance further discussions."
Japan's trade surplus with the United States shrank 4.7 per cent on-year in May - the first contraction in the past five months, even as imports from the country dropped 13.5 per cent.
