[Source/Observer Network, Pan Yuchen, Editor/Gao Shen] According to a report by Reuters on June 18, due to the impact of US tariffs on large auto manufacturers such as Toyota, the total export value in May decreased by 1.7% year-on-year to 8.1 trillion yen (approximately RMB 401.7 billion), which was lower than the market expectation of a 3.8% decline.

This is the first decrease in Japan's export value in eight months, while it grew by 2% in April.

And because Japan and the US failed to reach a trade agreement this week, Japan's fragile economy has been further pressured. Weak personal consumption has already caused Japan's economy to shrink in the first quarter of this year, marking the first contraction in nearly a year.

Exported cars docked at Yokohama Port, Reuters

On local time June 17, Japanese Prime Minister Shibayama stated after the G7 Leaders' Summit that Japan has not yet reached a comprehensive tariff agreement with the US due to some existing differences between the two countries. He added that Japan and the US only discussed the possibility of reaching an agreement until the very last moment.

Currently, Tokyo is making every effort to persuade Washington to exempt the 25% import tariff on Japanese car manufacturers. Additionally, if no agreement is reached, Japan will face a "reciprocal" tariff of 24% starting from July 9.

According to estimates by the Japan Research Institute, if all threatening tariffs imposed by the US on Japan take effect, Japan's exports to the US will decrease by 20%-30%. Some economists said that these tariffs could reduce Japan's GDP by approximately 1 percentage point.

In 2024, the total amount of Japan's exports to the US was 21 trillion yen (approximately RMB 1.04 trillion), with Japan's automotive industry accounting for about 28% of the export value. Affected by a 24.7% drop in automobiles and a 19% drop in automotive parts, Japan's exports to the US fell by 11.1% year-on-year in May, marking the largest monthly decline since February 2021. The appreciation of the yen also led to a reduction in shipments.

On the other hand, in terms of quantity, Japan's automobile exports to the US only decreased by 3.9%. Economist Hiroki Akimoto of Daiwa General Research stated that the decrease in the export value of Japanese car companies to the US, but without a significant drop in export volume, indicates that Japanese car companies are actually bearing the cost of the tariff rather than passing it on to consumers through price increases.

So far, except for Subaru and Mitsubishi Motors, major Japanese carmakers have not raised prices in the US to reduce the cost of tariffs. The impending tariff has prompted Japanese companies to increase shipments earlier this year, thus boosting the level of exports to the US during the same period.

Akimoto Hiroki stated that Japanese carmakers are buying time based on the progress of trade negotiations between Japan and the US. He added that not raising prices may affect their profits, but their financial foundation remains overall stable.

In addition, official Japanese data also shows that imports fell by 7.7% year-on-year in May, compared with a market forecast of a 6.7% decline; Japan's trade deficit last month was 637.6 billion yen (approximately RMB 31.6 billion), lower than the forecast of 892.9 billion yen (approximately RMB 44.3 billion).

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Original source: https://www.toutiao.com/article/7517192078212842021/

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