Japan Aug. exports to China decline 0.5% y/y

Japan Aug. exports to China decline 0.5% y/y

Japan's exports to China in August 2025 decreased by 0.5% year-over-year (y/y), according to the latest trade data released by the Ministry of Economy, Trade and Industry. This marks a slight downturn from the previous month, which saw a 0.3% increase in exports to the Asian giant. The decline comes amidst ongoing trade tensions between the U.S. and China, which have spilled over into bilateral trade agreements and global market dynamics.

The decrease in exports to China is part of a broader trend of slowing economic growth in Japan, driven by factors such as the ongoing COVID-19 pandemic and geopolitical uncertainties. Despite the recent decline, Japan remains one of China's largest trading partners, with a significant trade deficit. In 2024, Japan's exports to China totaled $200 billion, up 4% from the previous year, according to the Japan External Trade Organization (JETRO).

The decline in exports to China is also tied to broader global trade dynamics. The U.S. and China have been engaged in high-stakes trade talks, with U.S. Democrats urging the Trump administration to address China's "structural overproduction" as part of any future bilateral trade agreement. The Biden administration, through former Treasury Secretary Janet Yellen, has emphasized the need to address China's overcapacity, particularly in industries such as steel and solar panels, which have a significant impact on the U.S. and global markets .

Meanwhile, China has initiated two investigations against the U.S. semiconductor sector, including an anti-dumping probe, potentially affecting the trade talks. The investigations reportedly follow Washington's recent move to add 23 more China-based companies to its entity list, imposing restrictions on firms considered to be acting against U.S. national security or foreign policy interests .

As trade tensions persist, U.S. agricultural producers are preparing to travel to China, aiming to strengthen ties with Beijing. This is the third year in a row that the U.S. Department of Agriculture (USDA) has organized such a trip, but officials say this year's mission carries greater significance due to tense bilateral trade relations .