Japan’s Exports Rise at Faster Clip Before Trump Tariffs Hit

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(Bloomberg) — Japan’s exports rose at a faster pace as businesses increased orders ahead of the rollout of higher tariffs in the US.

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Exports measured by value gained 11.4% in February from a year earlier, the Ministry of Finance reported Wednesday. Exports slightly missed the median estimate of a 12.6% increase. Imports fell 0.7%, compared with the median estimate of a 0.8% gain. 

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Japan’s trade balance switched back into the black, with a surplus of ¥584.5 billion ($3.9 billion).

Trade helped Japan’s economy grow in the last quarter of 2024 as net exports rose, and shipments abroad have advanced in the first two months of this year. Part of that bump reflected efforts to frontload exports to get ahead of new tariffs in the US.

“I think that some of the growth in exports may be due to a rush of orders before the Trump tariffs came,” said Yuichi Kodama, economist at Meiji Yasuda Research Institute. “But it’s not clear to what extent this was the case. It’s worth noting that exports to the US fell in terms of volume.”

By region, shipments to the US rose 10.5% by value and slipped by 3.3% in terms of volume. Those to China increased 14.1%, likely boosted by the Lunar New Year effect, while exports to Europe fell 7.7%.

Global trade flows now face potential major disruptions as US President Donald Trump continues to escalate his tariff campaign, targeting nations including Canada and Mexico, where Japanese carmakers have major manufacturing bases. The renewed trade war between Washington and Beijing also risks having a ripple effect on Japan, which counts on the two nations as its biggest trading partners. 

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The OECD Monday cut its world growth forecast to 3.1% for 2025 to account for turbulence weighing on global commerce.

“I don’t think overseas demand is that strong,” Kodama said. “Exports are growing in value terms mainly due to the impact of exchange rates, but growth in volume is slow, so it remains to be seen whether this strength will continue.”

The yen averaged 154.61 per dollar in February, 4.3% weaker than a year earlier, the Finance Ministry said.

Japan has so far failed to get an exemption from direct levies from the Trump administration, despite a seemingly positive meeting between the two nations’ leaders in February. Trade Minister Yoji Muto’s pleas to senior officials in Washington this month apparently went unheeded.

Fresh tariffs on steel and aluminum started hitting the Asian nation last week, and its manufacturers face the prospect of reciprocal tariffs on a variety of sectors plus a 25% auto levy set to start in early April.

To lower the impact from any tariffs imposed by Trump, Japanese companies are already stockpiling goods in the US, according to a survey by Bloomberg News. 

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Cars, semiconductor manufacturing equipment and chips led the advance in exports in February, while declining imports of crude oil and coal were among components weighing on imports.

Japan’s trade surplus with America was ¥918.8 billion in February, up 29% versus a year earlier. Auto shipments to the US rose almost 14%. Trump has long criticized the US trade deficit with Japan, and the president recently accused Japan and China of gaining an unfair advantage through foreign exchange policy, which Japan has denied. 

The US has also historically criticized the road safety standards in Japan as a non-tariff barrier that restricts US automakers’ exports to Japan.

(Updates with economist’s comments, more details from report)

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