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Japan

Author: Andrew David
Senior International Trade Analyst

Change in 2014 from 2013:

  To view changing data, mouseover the graphic below.
  • U.S. total exports: Increased by $1.8 billion (3 percent) to $67.0 billion
  • U.S. general imports: Decreased by $4.6 billion (3 percent) to $133.9 billion
  • U.S. trade deficit: Decreased by $6.4 billion (9 percent) to $67.0 billion

U.S. Total Exports

Total U.S. exports to Japan increased by $1.8 billion (3 percent) to $67.0 billion in 2014 (table JA.1). Export trends (product group increases or decreases) were generally affected by four factors: (1) larger exportable supplies of U.S. corn and more competitive prices led to a recovery in U.S. corn shipments to Japan, (2) declining fossil fuel prices and the continued shutdown of Japanese nuclear plants, (3) the Japanese consumption tax increase, and (4) a stronger U.S. dollar.1

 
Table JA.1: Japan: U.S. total exports, general imports, and merchandise trade balance, by major industry/commodity sectors, 2010–14
 
Million $
 
           
Absolute change,
Percent change,
Item
2010
2011
2012
2013
2014
2013-14
2013-14
U.S. total exports:              
Agricultural products 13,010 15,380 14,720 13,393 14,401 1,008 7.5
Forest products 2,017 2,239 2,187 2,250 2,190 -61 -2.7
Chemicals and related products 11,454 11,698 12,694 11,199 11,736 537 4.8
Energy-related products 2,788 3,468 3,484 3,307 2,974 -333 -10.1
Textiles and apparel 582 634 697 722 660 -62 -8.6
Footwear 79 93 92 84 77 -7 -8
Minerals and metals 3,412 4,026 3,443 3,654 3,874 219 6
Machinery 3,468 3,939 3,543 3,877 4,347 470 12.1
Transportation equipment 7,849 8,202 11,924 10,507 10,421 -86 -0.8
Electronic products 12,130 13,145 14,270 13,336 13,111 -225 -1.7
Miscellaneous manufactures 1,843 1,838 1,889 1,864 1,949 85 4.6
Special provisions 1,840 1,139 1,022 1,011 1,223 212 21
Total 60,472 65,800 69,964 65,206 66,964 1,758 2.7
U.S. general imports:              
Agricultural products 717 762 787 763 782 19 2.5
Forest products 550 511 525 468 452 -15 -3.3
Chemicals and related products 12,397 12,710 12,916 12,660 12,642 -18 -0.1
Energy-related products 685 714 697 779 568 -210 -27
Textiles and apparel 661 710 758 712 745 33 4.6
Footwear 2 2 2 3 2 -1 -37.7
Minerals and metals 5,808 7,083 8,153 7,433 7,399 -34 -0.5
Machinery 15,324 19,388 20,832 18,908 18,749 -159 -0.8
Transportation equipment 52,791 55,699 70,144 67,913 65,156 -2,757 -4.1
Electronic products 26,562 26,618 26,304 24,217 22,898 -1,320 -5.4
Miscellaneous manufactures 1,719 1,721 1,597 1,223 1,148 -75 -6.1
Special provisions 3,334 3,010 3,723 3,495 3,397 -98 -2.8
Total 120,552 128,928 146,438 138,573 133,939 -4,635 -3.3
U.S. merchandise trade balance:              
Agricultural products 12,292 14,618 13,934 12,630 13,619 989 7.8
Forest products 1,467 1,728 1,662 1,782 1,737 -45 -2.5
Chemicals and related products -942 -1,012 -222 -1,461 -906 555 38
Energy-related products 2,103 2,753 2,786 2,529 2,406 -123 -4.9
Textiles and apparel -79 -76 -61 10 -85 -95 (a)
Footwear 77 90 90 80 75 -5 -6.8
Minerals and metals -2,397 -3,057 -4,710 -3,779 -3,525 253 6.7
Machinery -11,856 -15,449 -17,289 -15,031 -14,402 629 4.2
Transportation equipment -44,942 -47,497 -58,221 -57,405 -54,734 2,671 4.7
Electronic products -14,433 -13,473 -12,033 -10,881 -9,786 1,095 10.1
Miscellaneous manufactures 124 117 291 641 801 160 24.9
Special provisions -1,495 -1,871 -2,701 -2,484 -2,174 310 12.5
Total -60,080 -63,128 -76,474 -73,368 -66,975 6,393 8.7
Source: Compiled from official statistics of the U.S. Department of Commerce for the 2010–14 period. These reflect all official revisions of previously published data up to June 2014 (accessed February 20, 2015).
Note: Import values are based on Customs value; export values are based on free along ship value, U.S. port of export. Calculations based on unrounded data. Sectors are ordered by the level of processing of the products classified within each sector.
a Not meaningful for purposes of comparison.

 

U.S. corn exports to Japan (excluding seed) increased by $800 million (45 percent) in 2014, as higher quantities were spurred by lower U.S. corn prices and larger volumes available for export. The United States has traditionally been the largest supplier of corn to Japan, accounting for 89 to 96 percent of Japan's imports during 2009–11.2 However, U.S. suppliers lost market share in Japan starting in 2012 as drought affected U.S. corn production. Higher U.S. corn prices led to Japanese purchasers switching to alternative sources—such as Australia, Brazil, and Ukraine—and substituting other products in feed.3 However, more competitive U.S. corn prices and larger exportable supplies in 2014 led to a rebound in U.S. exports, with the volume of U.S. exports to Japan, excluding seed and popcorn, increasing by 91 percent.4

U.S. exports of natural gas and components to Japan increased (up $541 million, or 77 percent), while exports of petroleum products (down $375 million, or 24.5 percent) and nuclear materials (down $327 million, or 86.5 percent) fell (table JA.2). These trends reflect declining prices, expanding U.S. fossil fuel production, and a shift away from nuclear power in Japan. First, the increase in exports of natural gas and components reflects an increase in exports of propane and, to a lesser extent, natural gas. While Japan’s imports of propane have remained relatively flat (in quantity terms), U.S. production is increasing, and U.S. exports—which were among the lowest priced in the Japanese market in 2014—have gained market share compared to other Japanese import sources, particularly Saudi Arabia.5 Second, declining prices and a change in the product mix contributed to the decrease in the value of petroleum product exports.6 Third, Japan shut down its nuclear reactors following the March 2011 Tohoku earthquake and tsunami that led to the Fukushima Daiichi nuclear accident. The last operating reactor was taken offline in 2013, leading to lower imports of nuclear materials.7

Table JA.2: Japan: Leading changes in U.S. exports and imports, 2010–14
 
Million $
 
           
Absolute change,
Percent change,
Item
2010
2011
2012
2013
2014
2013-14
2013-14
U.S. total exports:              
Increases:              
Cereals (AG030) 4,169 5,607 4,365 3,177 3,985 808 25.4
Natural gas and components (EP006) 533 305 471 700 1,240 541 77.2
Decreases:              
Medical goods (EL022) 4,687 4,838 5,259 5,159 4,693 -466 -9
Energy-related products:              
Petroleum products (EP005) 968 1,218 1,503 1,532 1,156 -375 -24.5
Nuclear materials (EP002) 752 650 508 378 51 -327 -86.5
All other 49,363 53,181 57,856 54,261 55,838 1,578 2.9
Total 60,472 65,800 69,964 65,206 66,964 1,758 2.7
U.S. general imports:              
Increases:              
Transportation equipment:              
Aircraft, spacecraft, and related equipment (TE013) 2,080 2,567 3,256 3,837 4,856 1,018 26.5
Internal combustion piston engines, other than for  aircraft (TE002) 3,752 4,533 5,239 4,597 4,912 315 6.9
Decreases:              
Transportation equipment:              
Motor vehicles (TE009) 32,280 30,408 38,199 38,368 34,485 -3,883 -10.1
Certain motor-vehicle parts (TE010) 7,617 8,415 10,642 9,225 8,743 -482 -5.2
Electronic products:              
Computers, peripherals, and parts (EL017) 6,026 5,878 5,254 4,680 4,277 -403 -8.6
Consumer electronics (EL003) 3,660 3,434 3,689 2,565 2,186 -379 -14.8
All other 65,137 73,692 80,159 75,302 74,481 -821 -1.1
Total 120,552 128,928 146,438 138,573 133,939 -4,635 -3.3
Source: Compiled from official statistics of the U.S. Department of Commerce for the 2010–14 period. These reflect all official revisions of previously published data up to June 2014 (accessed March 27, 2015).
Note: Import values are based on Customs value; export values are based on free along ship value, U.S. port of export. Calculations based on unrounded data.

There was also an increase in machinery exports (up $423 million, 12 percent), with the increase in exports spread across a number of different product groups. U.S. machinery exports to Japan were especially strong in the first quarter—exceeding imports in the first quarter of 2013 by 31 percent—as Japanese consumers and businesses bought domestic and imported products ahead of an increase in the consumption tax,8 which was raised from 5 percent to 8 percent in April 2014.9 The increase in the consumption tax also affected U.S. exports in other sectors. For example, U.S. transportation equipment exports to Japan were up 29 percent year over year in the first quarter, but down 23 percent in the second quarter as Japanese businesses and consumers pulled back on spending.10 The most significant export decline, in value terms, was in U.S. exports of medical goods (down $466 million, or 9 percent).11 Largely because of the depreciation of the yen relative to the U.S. dollar, 2014 was the second straight year of declines in the value of medical device exports to Japan, following several years of significant growth.12

U.S. General Imports

The value of U.S. imports from Japan decreased by 3.3 percent in 2014 to $133.9 billion. This decrease was due in part to the 8.3 percent decline in the value of the yen against the U.S. dollar in 2014.13 Japan’s exports to the United States—in yen terms—increased as expected from a weakening currency, but not enough to offset the significant decline in the yen’s value when translated to U.S. dollars.14 The change in the exchange rate further explains the 9 percent ($12.5 billion) decline in imports during 2012–14. Over this same time period, the value of the yen declined 32 percent and U.S. imports from Japan—in yen terms—increased by 21 percent.15

The decline in U.S. imports from Japan also reflects the shift in motor vehicle production to North America. U.S. unit imports of motor vehicles from Japan reached their highest pre-recession level in 2013, but declined 6 percent in 2014 as Japanese companies increased their North American vehicle production. For example, in 2014, Mazda started production of the Mazda 2 and Mazda 3 in Mexico, while Honda began production in Mexico of the Fit; all of these were previously sourced from Japan.16

U.S. imports of computers, peripherals, and parts (down $403 million, or 9 percent) and consumer electronics (down $379 million, or 15 percent) from Japan also declined. The largest declines in the computer product group were the value of imports of printer parts and notebook computers. The value of notebook imports fell because of both lower prices and Japanese producers’ loss of market share.17 The decrease in imports of consumer electronics (down $379 million, or 15 percent) was primarily because of lower imports of digital cameras, as more consumers now use smartphones to take pictures. The unit value of U.S. digital camera imports actually rose, however, as Japanese producers increasingly focus on selling high-end cameras.18

Despite the overall decline in imports, there was a $1.0 billion (26.5 percent) rise in U.S. imports of aircraft, spacecraft, and related equipment and a $315 million (6.9 percent) increase in imports of internal combustion piston engines (other than for aircraft). These changes reflect a growing demand for certain finished products that use inputs from Japanese suppliers. The growth in aircraft imports, which is a continuation of a long-term trend, was driven by increased imports of parts for Boeing aircraft. Global deliveries of Boeing aircraft increased from 648 to 723 during 2010–14, including an increase in deliveries of the Boeing 787 “Dreamliner” from 65 to 114.19 Japanese firms are major suppliers of components for Boeing aircraft in general, and have an even larger role in supplying parts for the 787.20 Japanese producers are also suppliers of internal combustion engines for the automotive, machinery, and marine industries, which all experienced U.S. production growth in 2014.21

U.S. Trade Balance

The U.S. trade deficit with Japan decreased by $6.4 billion in 2014 because of an increase in U.S. total exports and a decline in U.S. general imports. U.S. exports to Japan were affected by several factors. First, larger exportable supplies of U.S. corn and more competitive prices led to a recovery in U.S. corn shipments to Japan. Second, there were shifts in U.S. exports of energy products because of the decline in petroleum prices, the shutdown of nuclear reactors, and exports of competitively priced propane gaining market share in Japan. Third, Japan’s consumption tax increase in April 2014 likely contributed to substantially higher U.S. exports of machinery and other goods in the first quarter as consumers and businesses increased spending on domestic and imported products in advance of the expected hike. On the other hand, the decline in the value of the yen relative to the U.S. dollar led to a decrease in exports in some sectors as U.S. exports became more expensive to Japanese purchasers.The decline in the value of U.S. imports from Japan was primarily because of the depreciation of the yen against the U.S. dollar. Japan’s exports to the United States—in yen terms—increased as expected from a weakening currency, but not enough to offset the significant decline in the yen’s value when translated to U.S. dollars. Motor vehicles also contributed to the import decline as Japanese firms expanded production in North America. Some types of imports grew, however—particularly imports of inputs to U.S. production of civil aircraft and certain machinery and other transportation equipment.


 

1 The yen declined 8 percent in value against the U.S. dollar in 2014. Exchange rate calculations are based on the average daily rate using the Federal Reserve’s historical data series. Federal Reserve, “Historical Rates for the Japanese Yen,” February 9, 2015.
2 GTIS, Global Trade Atlas database (for HTS subheading 1005.90; accessed February 23, 2015).
3 U.S. Department of Agriculture (USDA), Foreign Agricultural Service (FAS), Japan: Grain and Feed Annual, 2013, March 19, 2013; USDA, FAS, Japan: Grain and Feed Annual, 2014, March 12, 2014; USDA, FAS, Japan: Grain and Feed Update—January 2015, January 29, 2015; GTIS, Global Trade Atlas database (for HTS subheading 1005.90; accessed February 23, 2015).
4 USDA, FAS, Japan: Grain and Feed Update—January 2015, January 29, 2015; GTIS, Global Trade Atlas database (for HTS subheading 1005.90) accessed February 23, 2015).
5 GTIS, Global Trade Atlas database (for HTS subheading 2711.12; accessed February 23, 2015); USDOE, EIA, “Petroleum and Other Liquids” (accessed February 23, 2015).
6 USITC DataWeb/USDOC (for commodity group EP005; accessed February 26, 2015).
7 Some nuclear reactors are expected to restart in 2015. CNN, “Japan Shuts Down Last Nuclear Reactor,” September 16, 2013.
8 According to the Japan External Trade Organization (JETRO), “The following domestic and import transactions, except for certain transactions deemed non-taxable, are subject to consumption tax. The consumption tax rate is 8% (national consumption tax rate of 6.3% and local consumption tax rate of 1.7%). 1. Domestic transactions: the transfer or rental/lease of assets or the provision of services as a business in Japan by an enterprise for consideration. 2. Import transactions: cargo retrieved from a bonded zone. Financial transactions, capital transactions, and certain transactions in the areas of medical care, welfare and education are deemed non-taxable.” JETRO, http://www.jetro.go.jp/en/invest/setting_up/laws/section3/page6.html (accessed April 23, 2014).
9 U.S. machinery exports to Japan peaked in the first quarter of 2014.They declined 8 percent from the first quarter to the second quarter because of the consumption tax increase, though second-quarter 2014 machinery exports remained higher than in the second quarter of 2013.
10 Mitsubishi UFJ, “Forecast for the Japanese Economy,” May 2014, 1; Mitsubishi UFJ, “Forecast for the Japanese Economy,” August 2014, 1; Einhorn, “Japan Falls into Recession,” November 17, 2014. USITC DataWeb/USDOC (for commodity groups TE001–TE015; accessed February 26, 2015).
11 Exports of medicinal chemicals to Japan, on the other hand, increased by $312 million (8.6 percent). Overall, U.S. chemical exports to Japan increased by $582 million, led by increases in exports of medicinal chemicals and certain organic chemicals (up by $223 million, or 17 percent). USITC DataWeb/USDOC (for commodity group CH019; accessed February 26, 2015); Espicom, “Executive Summary,” December 2014.
12 Japan's recorded imports of medical devices from the United States in yen, however, increased 15 percent in 2013 and 3 percent in 2014, based on Japanese imports in HTS headings 9018–9022. These data are not entirely consistent with the medical device product group used in this report, but capture most medical device trade. Government of Japan, MOF, “Trade Statistics of Japan” (accessed February 26, 2014).
13 In yen terms, U.S. imports from Japan increased 5 percent in 2014. Exchange rates are from Federal Reserve, “Historical Rates for the Japanese Yen,” February 9, 2015.
14 Similarly, examining Japan’s export data indicates that Japanese exports (in yen) to the United States increased 6 percent in 2014. Government of Japan, MOF, “Trade Statistics of Japan” (accessed February 13–17, 2014).
15 Japanese trade statistics indicate a 22 percent increase in exports to the United States (in yen terms) during this time period. Government of Japan, MOF, “Trade Statistics of Japan” (accessed February 13–17, 2014).For exchange rates, see Federal Reserve, “Historical Rates for the Japanese Yen,” February 9, 2015.
16 U.S. imports from Japan of vehicles with engines from 1 to 1.5 liters declined from 152,883 units to 72,762 units (52 percent), while U.S. imports of such vehicles from Mexico increased from 49,516 units to 133,957 units. The Mazda plant will also build up to 50,000 cars per year for Toyota. USITC DataWeb/USDOC (HTS subheading 8703.22; accessed February 17, 2015); Case, “Mazda Pins U.S. Growth on Mexico Plant,” February 27, 2014; Snavely, “Honda Starts Making FIT Cars in Mexico,” February 23, 2014; Honda, “Honda Now Ships,” January 28, 2014.
17 USITC DataWeb/USDOC (for HTS subheadings 8471.30.01, 8443.99.20, and 8443.99.25; accessed February 27, 2015).
18 Fujikawa, “Weaker Yen Pushes Up Canon Profit,” January 28, 2015; Harjani, “Oh Snap,” November 5, 2014. USITC DataWeb/USDOC (for HTS subheading 8525.80.4000; accessed February 26, 2015).
19 See the Transportation Equipment webpage for further discussion of the U.S. aircraft industry overall. Boeing, “Orders and Deliveries,” n.d. (accessed February 20, 2015).
20 Boeing, “Boeing in Japan,” February 2015, 3; Suga, Matsuda, and Park, “Boeing Hands 21%,” June 12, 2014; Harner, “The Boeing 787 Dreamliner,” September 26, 2011.
21 U.S. machinery shipments increased 6 percent in 2014, while shipments of motor vehicles and parts increased by 4 percent. The increase in demand from the marine industry was for engines for outboard motors, with demand for these products reportedly increasing because of U.S. economic growth. USDOC, Census, “Advance Report on Durable Goods,” January 27, 2015; Barrett, “Mercury Marine CEO,” February 2, 2015; Barrett, “Mercury Marine Debuts,” February 16, 2015; Hogan, “Marina Industry in SW Florida,” January 31, 2015.