Japan’s export growth slowed in July, with shipments of cars to the United States sinking and as global trade disputes cast doubt over demand for products from the world’s third-biggest economy.
Exports rose 3.9% from a year earlier, Finance Ministry data showed yesterday, well below the 6.3% increase forecast by economists in a Reuters poll and slowing from June’s 6.7% increase.
Japan’s exports to the United States fell 5.2%, a second straight decline, paced by a 12.1% fall in car shipments.
There were no immediate signs that trade tensions with Washington have affected Japan’s auto sector, but analysts say external risks are increasing. “While caution is heightening over US trade policy, US car sales are levelling off, causing Japan’s car exports to the United States to level off as well,” said Takeshi Minami, chief economist at Norinchukin Research Institute. “If capital outflows from emerging economies accelerate on top of this, it would cause a marked slowdown in the global economy, further weighing on Japan’s exports.” President Donald Trump is pressing Japan and other nations to reduce their trade surpluses with the United States and has threatened to raise tariffs on the critical auto sector after raising them on steel and aluminium.
Japanese carmakers have shown no sign, though, of rushing to boost car shipments to the United States in anticipation of higher levies.
Imports from the United States rose 11% in July, led by crude oil, motors and liquefied petroleum gas.
As a result, Japan’s trade surplus with the United States fell 22.1% year-on-year to ¥502.7bn ($4.55bn). Exports to China, Japan’s largest trading partner, rose 11.9% in July from a year ago. Shipments to Asia, which account for more than half of Japan’s overall exports, rose 8%, led by semiconductor production equipment and electronics parts for China and sales of steel to Thailand.
Overall imports rose 14.6% in the year to July, roughly matching economists’ median estimate, resulting in a trade deficit of ¥231.2bn, vastly exceeding the expected ¥50bn.
Yesterday’s trade figures came after gross domestic product (GDP) data last week showed Japan’s economy, the world’s third largest, rebounded in the second quarter from a January-March dip. Japan’s economy grew at an annualised rate of 1.9% in the second quarter on the back of household and business spending, recovering from an earlier contraction.
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