Japan’s Export Growth Decelerates for the Second Consecutive Month Due to U.S. Tariffs

Vehicles awaiting shipment are parked at a port on March 27, 2025, in Yokohama, Japan. U.S. Tomohiro Ohsumi | Getty Images

Japan’s exports slowed for a second consecutive month, according to government data released Wednesday, as the nation grapples with the impact of U.S. tariffs. Export growth of 2% aligned with analysts’ estimates, marking the slowest rate since October of the previous year and the worst performance since September when exports contracted by 1.7%.

The country’s imports decreased by 2.2% year-over-year, which was better than the anticipated 4.5% decline. Preliminary government data revealed that Japan’s real gross domestic product contracted at an annualized rate of 0.7% in the first quarter of this year, primarily due to stagnant private consumption and slowing export growth.

Japan currently faces a 25% levy on its auto, steel, and aluminum exports to the U.S. Additionally, the country is subject to a 10% baseline tariff imposed on most trade partners. Japanese goods also encounter ‘reciprocal’ tariffs of 24%, which have been temporarily suspended. On April 2, tariffs were levied on over 180 countries, including Japan, but were suspended about a week later for 90 days amid market turmoil, allowing trade partners to negotiate agreements with the U.S.

Automobiles represent Japan’s leading export to the U.S., accounting for 28.3% of all shipments in 2024, according to customs data. Japan’s trade deficit narrowed to 115.8 billion yen ($803.1 million), which was smaller than the expectations of 227.1 billion yen in the Reuters poll. In March, the deficit stood at 559.4 billion yen.

By region, Japanese exports to China and the U.S., its largest trading partners, fell by 0.6% and 1.8% year-over-year, respectively.