Japan's exports have declined for four consecutive months due to Trump's tariffs

On September 17th, the latest trade data released by Japan's Ministry of Finance showed that Japan's exports in August decreased by 0.1% year-on-year, marking the fourth consecutive month of decline. Behind this data lies the continuous impact of the tariff policies led by US President Trump on the global trade system. As the third-largest trading partner of the United States, Japan is deeply embroiled in the center of this trade war.

I. Tariff Escalation: Precision Strikes from Automobiles to All Categories

The Trump administration's tariff policy towards Japan shows a "stepwise escalation" feature. In April 2025, the United States first imposed a 25% tariff on Japanese automobiles and auto parts, raising the original 2.5% rate to 27.5%; in June, the steel and aluminum tariffs were doubled to 50%; in July, the United States announced a 15% benchmark tariff on all Japanese goods exported to the United States, and reserved the right to impose additional taxes on specific industries. This "precise strike on core industries + full coverage of all categories" strategy directly hits the core of the Japanese economy - the automotive industry accounts for 28.3% of Japan's total exports to the United States, with an export value of over 6 trillion yen in 2024.

Take Toyota as an example. Although its sales in the United States remained stable in the second quarter of 2025 due to a high proportion of local production, it still needed to import over 500,000 vehicles and key parts from Japan. The tariff increase led to a loss of 450 billion yen in operating profit for Toyota in a single quarter, and its annual net profit may drop by 44%. More seriously, the tariff shock has spread from complete vehicles to the supply chain of parts. Mazda and Subaru, which are highly dependent on the US market, all suffered losses in the second quarter, and the volume of auto exports from Kyushu to the United States dropped by 67.8% in June, causing a severe blow to the regional economy.

II. Structural Crisis Behind the Trade Data

The decline in Japan's exports shows a "core industry deceleration + transmission to related industries" chain reaction feature. Data from the Ministry of Finance shows that in May 2025, Japan's auto exports decreased by 6.9% year-on-year, steel exports dropped by 20.6%, and mineral fuel exports plummeted by 50.7%. This comprehensive decline contrasts sharply with the single-industry impact when Trump first imposed tariffs in 2018, exposing the deep vulnerability of Japan's trade with the United States.

From the perspective of trading partners, Japan's exports to the United States shrank from 21.3 trillion yen in 2024 to 1.514 trillion yen in May 2025, a year-on-year decline of 11.1%; during the same period, exports to China decreased by 8.8%, and exports to the European Union only increased by 4.9%. This "divergence between the US and Europe, simultaneous decline in Japan and China" pattern reflects the reconstruction of the global supply chain under Trump's tariff policies - Japanese companies are forced to make a difficult choice between "preserving the US market" and "transferring production capacity".

III. Policy Game: From Hardline Confrontation to Compromise for Survival

Facing the tariff shock, the Japanese government underwent a strategic shift from "absolutely no compromise" to "limited concessions". In July 2025, Prime Minister Ishiba Masayoshi made a tough statement before the upper house election that "agricultural interests will not be sacrificed", but quickly turned to negotiations after the election loss. The final agreement, although reducing the car tariff from 27.5% to 15%, required meeting three major conditions: Japan would purchase $8 billion worth of US agricultural products annually, invest $550 billion in the US, and open its car market. This "market-for-tariff-rate" compromise was essentially a reluctant choice made by Japan under the pressure of a governance crisis and economic strain.

IV. Deep-seated Dilemma: Export Dependence and Industrial Hollowing-out

The essence of Japan's export crisis lies in the failure of the post-war "trade-based nation" model in the face of the global anti-globalization trend. In the first quarter of 2025, Japan's GDP shrank by 0.2% quarter-on-quarter, with both private consumption stagnation and export decline exerting a double drag. The soaring price of rice weakened residents' purchasing power, while traditional advantageous industries such as automobiles and steel lost competitiveness due to tariffs. This "insufficient domestic demand + blocked external demand" predicament forced the Japanese government to propose a "doubling of rice product exports plan", attempting to open up new markets through innovative products like frozen sushi and soy sauce-fried rice, but the target of 350,000 tons by 2030 seemed unattainable under tariff barriers.

V. Future Outlook: Seeking Opportunities Amid Uncertainty

Currently, Japan's economy is on the verge of a "technical recession". The Cabinet Office has lowered its growth forecast for the fiscal year 2025 from 1.2% to 0.7%, and the Bank of Japan was forced to postpone its interest rate hike plan to avoid excessive appreciation of the yen. However, opportunities lie within the crisis: the demand for Japanese products in markets such as the EU and ASEAN is rising, and the export of emerging industries like semiconductors and new materials has increased by 12.3%, indicating potential for structural transformation.

Historical experience shows that there are no true winners in trade wars. While the Trump administration was obsessed with "America First", the plight of Japanese enterprises serves as a global warning: protectionism only undermines supply chain efficiency and ultimately harms the interests of all parties involved. For Japan, breaking away from export dependence, accelerating industrial upgrading, and building diversified trade relations might be the only way to navigate through this tariff storm.