Japan Exports Fall 1.7 percent in May Amid U.S., China Slowdown

• Japan's exports dropped 1.7 percent in May 2025, the fastest decline since September 2024.
• Exports to the U.S. fell 11.1 percent; motor vehicle shipments to the U.S. plunged by 24.7 percent.
• Trade deficit narrowed to 637.6 billion yen, below Reuters' forecast of 892.9 billion yen.

The Japanese exports in the month of May decreased by 1.7 percent compared to the same period in the previous year, which was the fastest decrease since September 2024 because the country is struggling to deal with the uncertainties associated with trade.

The decrease was smaller than that of the 3.8 percent that economist surveyed by Reuters said to be the expected rate but compared to spring when it rose by 2 percent, the trip was backward. Statistics provided by the trade ministry of Japan indicated that exports to the U.S. remained low as they declined 11.1 percent in year-over-year activity. The export to China which is the biggest trade partner within Japan, declined by 8.8%. Global automobile exports have declined by 6.9 per cent in Japan though interestingly, export of motor vehicles to the U.S. fell by 24.7 per cent as compared to last year.

According to the data of customs, Japanese manufacturers provided 28.3 percent of the total exports to the U.S. in 2024. In addition, on top of the existing 25 percent duty on her auto, steel exports to the U.S., Japan is already experiencing a 24 percent adverse or so-called reciprocal tariff on all other exports that comes in effect on July 9.

The figures follow in a day after the Bank of Japan wrote in its monetary policy report that growth would slow down in the country since factors such as trade would create a slowdown in foreign economies as well as a reduction in domestic business profits.

“It is extremely uncertain how trade and other policies in each jurisdiction will evolve and how overseas economic activity and prices will react to them,” the BOJ added.

Declining exports were already blemishing the GDP in Japan as the economy in the country shrank by 0.2 percent quarter-on-quarter in the third quarter ending March, compared to the previous quarter in the year, becoming the first time a year where the economy shrank on such terms.

Also Read: Japan, U.S. in Final Talks on Trade Deal Before G7 Summit

The third-largest economy in the world experienced a decreasing of imports by 7.7 percent in May-2015 compared to international expectations that show six and seven percent. In May, the trade deficit of Japan was at 637.6 billion yen which is less than the expected deficit of 892.9 billion yen in the Reuters poll.

On Wednesday, the U.S. president Donald Trump was quoted as saying that Japan was being “tough” in trade negotiations discussions, following six rounds of negotiations between the top negotiator of Japan Ryosei Akazawa, U.S. Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent, failed to record a breakthrough.