Japan eyes concessions after $63b US surplus amid tariff risk

Japan posted a ¥9 trillion ($63 billion) trade surplus with the United States over the last fiscal year, even as the country recorded a fourth consecutive annual global trade deficit, according to preliminary data released by the Finance Ministry on Thursday.

Japan’s overall trade balance showed a deficit of ¥5.2 trillion ($37 billion) for the fiscal year ending in March, driven by a weaker yen that pushed up import costs despite export growth.

The US trade surplus figure comes as Japanese negotiators meet with US counterparts in Washington to argue against President Donald Trump’s latest tariff proposals, which include a threatened 24% levy on Japanese imports.

The announcement triggered financial market jitters earlier this month, prompting Trump to delay implementation for 90 days.

Nonetheless, Japan still faces a 10% base tariff and additional duties of 25% on key exports such as cars, auto parts, and metals—measures that have already taken effect.

The surging surplus with the US may complicate Tokyo’s position as it seeks exemptions or concessions.

Prime Minister Shigeru Ishiba faces growing pressure to stabilise trade relations while navigating domestic economic challenges.

Analysts have speculated that Japan may offer concessions in politically sensitive sectors, such as rice imports, to defuse tensions. A domestic rice shortage has recently pushed up prices, possibly making such a move more politically feasible.

Total exports from Japan rose 5.9% year-on-year, bolstered by strong overseas demand for semiconductors and vehicles. Imports climbed 4.7%, reflecting the yen’s continued depreciation.

For March alone, Japan recorded a ¥544 billion ($4 billion) surplus, with exports increasing nearly 4% compared to a year earlier.

Exports to the US rose 3%, while shipments to China declined. However, exports to Hong Kong, Taiwan, and South Korea saw notable increases.

“This is likely due to the rerouting of exports within Asia to avoid tariff conflicts with the US,” said Min Joo Kang, senior economist at ING.