Japan records rising exports despite tariff uncertainties

Japan's export economy shows resilience: exports rose for the third consecutive month in December. One reason for this growth could be the strategy of companies to accelerate important deliveries before the planned US tariffs on goods are introduced. This is because the newly inaugurated US President Donald Trump has indicated that he wants to impose import tariffs on major trading partners such as China, Canada, and Mexico. Such protectionist tones from the US are fueling global fears about potential disruptions to international trade. Japan's exports increased by 2.8 percent in December compared to the previous year, exceeding forecasts that expected a rise of 2.3 percent. A growth of 3.8 percent was already recorded in November. Despite this growth, trade with China, Japan's largest trading partner, fell by 3 percent, while exports to the US declined by 2.1 percent. On the import side, there was a 1.8 percent year-on-year increase in December, which was below the projected 2.6 percent. Imports were down 3.8 percent as recently as November. As a result, Japan achieved a trade surplus of 130.9 billion yen in December, whereas experts had anticipated a deficit of 53 billion yen. Looking at the overall year 2024, Japan still has a trade deficit of 5.3 trillion yen. These are four consecutive years of deficits, although the amount is reduced compared to the previous year's deficit of 9.52 trillion yen. Positive signals are coming from the domestic front: rising wage growth could stimulate consumption and prompt the Bank of Japan to raise interest rates as early as this week. However, the situation remains uncertain since Trump's proposed tariffs could threaten global trade flows and China's economic recovery. According to a survey by the Japan External Trade Organization, many Japanese companies in the US are preparing for possible additional tariffs. Measures include strengthening production and procurement within the US and potential price increases for products.