U.S. Tariffs Push Japan’s Economy Toward Recession as Exports

Japan’s economy is feeling the pressure as new U.S. tariffs make it harder for Japanese companies to sell their products abroad.

According to official data from the Ministry of Finance, Japan’s exports dropped by 1.7% in May compared to last year. This is the first time in eight months that exports have fallen, and it signals growing trouble for the country’s economic recovery.

The main reason for this drop is higher tariffs from the United States, which is Japan’s largest export market. The U.S. government raised taxes on Japanese cars, car parts, steel, and other goods.

This means American buyers now pay more for Japanese products, so they are buying less. Japanese car makers, for example, shipped almost as many cars as before but had to cut their prices to keep up sales. This price cutting hurts their profits.

Imports into Japan also fell sharply, down 7.7% from last year. The biggest drops were in crude oil and coal, showing that Japanese businesses and consumers are spending less.

With exports down and imports also lower, Japan ended up with a trade deficit of 637.6 billion yen (about $4.4 billion) in May. This is the second month in a row that Japan imported more than it exported.

These problems come at a tough time. Earlier this year, Japan’s economy shrank, and now experts worry it could shrink again, which would mean a technical recession.

The Bank of Japan, which sets interest rates and tries to keep the economy stable, has decided not to change its main interest rate for now. The bank says it is watching the situation closely because it is not clear how long these trade problems will last.

Japan’s government is trying to negotiate with the U.S. to reduce or remove the tariffs, especially for cars. So far, no agreement has been reached, and tariffs could go even higher in July if talks fail.

The government has announced emergency support for families and businesses to help them cope with higher costs and lower sales. Some politicians want to cut sales taxes to make life easier for consumers.

Japan’s export troubles matter for the whole world. The country is a major supplier of cars, electronics, and other products. If Japan’s economy slows down, it can affect prices and jobs in other countries too.

This situation shows how trade policies between big economies can have a real impact on everyday life, both in Japan and around the globe.