Japan’s exports declined 0.5% in June, marking the second straight monthly drop and raising fresh concerns about a potential recession. The fall defied economists’ expectations of a slight rise, as trade tensions with the U.S. remain unresolved.
Shipments to the U.S. dropped 11.4% year-on-year, led by a 26.7% plunge in auto exports. Since April, Japanese cars have faced a 25% tariff, with no breakthrough in trade talks. The new reciprocal tariff is set to take effect August 1.
Experts say carmakers are cutting prices to absorb costs. While export volumes rose slightly, export values dropped over 25%.
Exports to China also fell by 4.7%, adding pressure to Japan’s trade-dependent economy. Another quarterly contraction would meet the definition of a technical recession.
With elections set for July 20, Japanese officials are holding firm on agricultural protections, resisting U.S. demands. Analysts warn that without compromise, tariffs could further dent growth.
