Japan’s exports to the United States experienced a significant decline in December, dropping 11.1 percent to 1.81 trillion yen ($11.4 billion), according to official figures released on Thursday. This decrease contributed to a 4.1 percent decline in Japan’s exports to the US for the entire year, resulting in a 12.6 percent decline in Tokyo’s trade surplus with Washington to 7.5 trillion yen ($47 billion).
The decline in exports was primarily driven by a decrease in the number of cars and auto parts shipped to the US, as well as an increase in imports of liquefied petroleum gas, cereals, and power-generating machines. The auto sector, which accounted for 30 percent of Japanese exports to the US in 2024, was particularly affected by the tariffs imposed by the US.
In July, Tokyo and Washington announced a trade deal that lowered tariffs to 15 percent from a feared 25 percent. While this reduction was seen as a positive step, Tokyo officials and business leaders have expressed concerns that the 15 percent tariffs are still high compared to the period before the second Trump administration.
Japan’s overall trade account logged a deficit of 2.65 trillion yen in 2025, marking its fifth consecutive deficit. The country’s trade surplus with the US has been shrinking, with the December surplus declining 31.7 percent to 690.6 billion yen ($4.4 billion).
The decline in Japan’s exports to the US is a significant development, given the importance of the US market to Japan’s economy. The US is one of Japan’s largest trading partners, and the tariffs imposed by the US have had a notable impact on Japan’s export-driven economy. As the global trade landscape continues to evolve, Japan will likely need to navigate these challenges to maintain its economic growth and competitiveness.
The trade deal between Tokyo and Washington has provided some relief, but the ongoing impact of the tariffs will be closely watched by economists and business leaders. As Japan seeks to expand its trade relationships with other countries, the outcome of its trade negotiations with the US will be crucial in determining the future of its export-driven economy.
