The US tariffs negatively affected exports to the US, but shipments elsewhere stayed strong, highlighting Japan’s export resilience.
By destination, exports to the US dropped 13.3% year-on-year, while exports to Asia (9.2%), China (5.8%), and the EU (5.0%) posted solid gains. Strong export performance to Asia, particularly to Hong Kong, Malaysia, Taiwan, and Vietnam, is related to IT exports as they are top global hubs.
Examining US exports in greater detail, the tariff has resulted in decreases across all export categories: chemicals (-17.8%), iron and steel (-34.7%), machinery (-8.7%), electrical machinery (-3.7%), and transport equipment (-19.2%).
We found that exports of machinery, electrical machinery, and transport equipment to the EU, Asia, and China were quite strong, but exports of iron and steel showed a decline across the globe. Overall, trade in iron and steel was hit by spreading tariffs from the US to the EU, sluggish construction activity, and severe price competition.
Meanwhile, the overall weakness in vehicle exports (0.6%) was mainly due to weak US exports, while semiconductor booms continued to support Japanese chipmakers.