Japan exports to U.S. fall for first time in 17 months amid protectionism fears

(Adds Japan's steel exports to U.S., economist's quote)
* June exports +6.7 pct yr/yr vs forecast +7.0 pct
* Imports +2.5 pct yr/yr vs forecast +5.3 pct
* Trade surplus with U.S. expands
* Steel exports to U.S. fall 33 pct by volume

By Stanley White
TOKYO, July 19 (Reuters) - Japan's exports to the United
States fell in June for the first time in 17 months amid worries
about U.S. President Donald Trump's protectionist trade
policies.
Exports to the United States fell 0.9 percent in June from
the same period a year ago due to a decline in shipments of cars
and semiconductor manufacturing equipment, two of Japan's most
important export products.
The decline, while slight, could still raise concerns among
Japanese policymakers who worry whether Trump will push Japan to
take concrete measures to lower its trade surplus with the
United States.
"Overall exports remain healthy for now, but we are not sure
how things are going to turn out on the trade policy front,"
said Shuji Tonouchi, senior market economist at Mitsubishi UFJ
Morgan Stanley Securities.
"It is possible talk of tariffs and trade friction could
reduce corporate investment."
Most of Japan's top exports to the United States fared
poorly in June.
Exports of cars fell 12.0 percent year-on-year in June,
while shipments of semiconductor manufacturing equipment fell an
annual 40.2 percent. Aircraft exports also fell an annual 10.4
percent.
Exports of heavy machinery rose a slight 0.1 percent in June
from the same period a year earlier.
Imports from the United States fell 2.1 percent year-on-year
due a decline in crude oil, aircraft, and coal.
As a result, Japan's trade surplus with the United States
was 590.3 billion yen, up 0.5 percent from the same period a
year ago.
Japan's trade surplus with the United States may draw
criticism as Trump's administration raises tariffs to lower the
U.S. trade deficit and combat what it says are unfair trade
policies.
The United States this month imposed 25 percent tariffs on
$34 billion of Chinese goods to lower the U.S. trade deficit,
and China quickly retaliated with an increase in tariffs on U.S.
goods.
Trump has imposed tariffs on imported steel and aluminium, a
blow to Japanese exporters, and has also criticised Japan for
the small number of American vehicles it imports.
In June, the value of Japan's exports of steel to the United
States fell 17.2 percent from the same period a year earlier,
the biggest decline since July last year, as tariffs started to
have an impact.
In terms of volume, which strips out the effect of
currencies, Japan's steel exports fell an annual 32.3 percent,
the biggest decline in three months.
"Japan's steel exports are not that large, but if they are
already falling this much I worry about the ripple effects from
U.S. steel tariffs," said Hiroaki Muto, economist at Tokai Tokyo
Research Center. "These tariffs will have a global impact."
Japan's overall exports rose 6.7 percent in June from the
same period a year ago, less than the median estimate for a 7.0
percent annual increase expected by economists in a Reuters
poll. Exports grew an annual 8.1 percent in May.
Exports are likely to continue to grow because global demand
remains firm, but Japan's trade surplus with the United States
makes it a potential target for Trump's protectionist policies.
Japan's imports rose 2.5 percent in the year to June, versus
the median estimate for a 7.0 percent increase.
The trade balance was a surplus of 721.4 billion yen ($6.40
billion), versus the median estimate for a 534.2 billion yen
surplus.
($1 = 112.8000 yen)

(Reporting by Stanley White
Editing by Eric Meijer)


First Published: 2018-07-19 01:54:12
Updated 2018-07-19 04:18:44


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