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Japan racks up trade deficit amid threat from Trump’s tariffs

JAPAN, JUL 17 – Japan recorded a $15 billion trade deficit in the first half of 2025 as U.S. tariffs cut auto exports by 25%, pressuring negotiations before upcoming trade talks.

  • On August 1, the United States will implement 25 percent tariffs on Japanese vehicle imports amid ongoing trade tensions in Japan.
  • These tariffs follow prolonged negotiations, with Trump pushing for reciprocal market access to address a $70 billion U.S. trade deficit with Japan.
  • Japan's auto exports to the U.S. dropped over 26 percent in June, deeply affecting companies like Mazda, which has prioritized protecting suppliers, dealers, and employees.
  • Mazda reported an 18.6 percent fall in U.S. sales in May and has formed a tariff strategy team meeting weekly in Hiroshima to mitigate impacts.
  • The tariffs raise concerns about inflation and market share loss for smaller Japanese automakers, potentially pressuring Japan to finalize a trade deal as U.S. officials engage at the World Expo in Osaka.
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Kyodo News+ broke the news in Japan on Wednesday, July 16, 2025.
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