Japan exports see biggest fall in 4 years as US tariff pain deepens

Drop in value of 2.6% in July clouds outlook for economic growth amid weak spending

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TOKYO - Japan's exports sustained their steepest drop in more than four years as US tariffs continued to weigh on global commerce, clouding the outlook for economic growth at a time when personal spending remains unsteady.

Exports fell 2.6 per cent in value in July from a year earlier, sliding more than the median forecast of a 2.1 per cent decline, the Ministry of Finance reported on Aug 20.

The downturn, led by cars, auto parts and steel, was the biggest since February 2021.

Export volumes rose by 1.2 per cent, suggesting exporters are continuing to absorb US tariff costs by cutting selling prices to preserve market share.

Imports fell 7.5 per cent and the trade balance flipped to a deficit of 117.5 billion yen (S$1 billion).

"Car shipments to the US have started to decline in volume, suggesting that the impact of tariffs is finally starting to show," said Mr Taro Saito, head of economic research at NLI Research Institute.