Japan’s exports to the United States fell in June for the first time in 17 months amid worries about U.S. President Donald Trump’s protectionist trade policies.
Exports to the United States fell 0.9 in June from the same period a year ago due to a decline in shipments of cars and semiconductor manufacturing equipment, two of Japan’s most important export products.
The decline, while slight, could still raise concerns among Japanese policymakers who worry whether Trump will push Japan to take concrete measures to lower its trade surplus with the United States.
“Overall exports remain healthy for now, but we are not sure how things are going to turn out on the trade policy front,” said Shuji Tonouchi, senior market economist at Mitsubishi UFJ Morgan Stanley Securities.
“It is possible talk of tariffs and trade friction could reduce corporate investment.”
Most of Japan’s top exports to the United States fared poorly in June.
Exports of cars fell 12.0 year-on-year in June, while shipments of semiconductor manufacturing equipment fell an annual 40.2 . Aircraft exports also fell an annual 10.4 .
Exports of heavy machinery rose a slight 0.1 in June from the same period a year earlier.
Imports from the United States fell 2.1 year-on-year due a decline in crude oil, aircraft, and coal.
As a result, Japan’s trade surplus with the United States was 590.3 billion yen, up 0.5 from the same period a year ago.
Japan’s trade surplus with the United States may draw criticism as Trump’s administration raises tariffs to lower the U.S. trade deficit and combat what it says are unfair trade policies.
The United States this month imposed 25 tariffs on $34 billion of Chinese goods to lower the U.S. trade deficit, and China quickly retaliated with an increase in tariffs on U.S. goods.
Trump has imposed tariffs on imported steel and aluminium, a blow to Japanese exporters, and has also criticised Japan for the small number of American vehicles it imports.
In June, the value of Japan’s exports of steel to the United States fell 17.2 from the same period a year earlier, the biggest decline since July last year, as tariffs started to have an impact.
In terms of volume, which strips out the effect of currencies, Japan’s steel exports fell an annual 32.3 , the biggest decline in three months.
“Japan’s steel exports are not that large, but if they are already falling this much I worry about the ripple effects from U.S. steel tariffs,” said Hiroaki Muto, economist at Tokai Tokyo Research Center. “These tariffs will have a global impact.”
Japan’s overall exports rose 6.7 in June from the same period a year ago, less than the median estimate for a 7.0 annual increase expected by economists in a Reuters poll. Exports grew an annual 8.1 in May.
Exports are likely to continue to grow because global demand remains firm, but Japan’s trade surplus with the United States makes it a potential target for Trump’s protectionist policies.
Japan’s imports rose 2.5 in the year to June, versus the median estimate for a 7.0 increase.
The trade balance was a surplus of 721.4 billion yen ($6.40 billion), versus the median estimate for a 534.2 billion yen surplus.