(Bloomberg) -- Japan’s trade surplus with the US last year far surpassed its average levels during President Donald Trump’s first term, risking his ire as the president mulls tariff plans across the world.
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Japan’s trade surplus with the US last year stood at ¥8.6 trillion ($54.9 billion), the fifth largest on record, according to data released by the Finance Ministry Thursday. That’s significantly higher than the average of ¥6.7 trillion during 2017 and 2020, and underscores the fact that Japan continues to export more to the US than it imports.
Those gains for Japan were largely driven by shipments of cars and car parts, which were also helped by a weaker yen. The Japanese currency was 7.7% weaker than the year before last year, trading on average at 150.97 against the dollar.
Taken together, the data leaves Japan at the mercy of further attacks from Trump, who has criticized countries with large trade surpluses with the US. While Japan has argued that it has also invested significant amounts in the US and boosted employment, the trade balance data will likely be one element that’s thrown around in future trade negotiations, as firms brace for tariffs.
“Companies are waiting to see what the Trump administration’s tariff policy will be,” said Yuichi Kodama, economist at Meiji Yasuda Research Institute. “There is of course a risk that exports will decline if tariffs are actually imposed.”
At the same time, in 2024 Japan had a deficit of ¥6.4 trillion with China, a key reason why it had an overall deficit for global trade. Japan imported calculation machinery and related goods from its neighbor, while it exported even more chip-making machinery, with shipments jumping 42.4% from the previous year.
The chips related exports are also likely to remain a source of tension with Trump, as the US-China trade war gears up for another chapter.
Thursday’s data also showed that Japan’s overall exports measured in value gained 2.8% from a year ago in December, led by chip-making machinery and semiconductor parts. Imports increased 1.8%, led by calculation machinery and related goods.
Before the release, analysts at SMBC Nikko Securities Inc. wrote in a note that exports probably got a lift from last-minute demand anticipating fresh tariffs under Trump.