The U.S. wants a fairer' trading relationship with Japan. Photo: AFP/File
business

Japan's trade surplus with U.S. soars ahead of talks

28 Comments
By Toshifumi Kitamura

Japan's politically sensitive trade surplus with the United States grew more than 15 percent in July, data showed Monday, as negotiators from the two economic powerhouses prepare to restart talks over a free trade deal.

According to Japanese finance ministry statistics, the trade surplus with Washington climbed to 579.4 billion yen ($5.5 billion) last month, a 15.6-percent year-on-year gain and the fifth consecutive monthly rise.

Japanese imports from the U.S. rose 3.5 percent, led by aircraft and crude oil, but this was outweighed by an 8.4-percent climb in exports driven by chip-making equipment and construction machinery, the ministry data showed.

U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe enjoy close ties but the bullish US president has frequently claimed that Tokyo has an advantage in bilateral trade and has called for a "more fair" relationship.

On a visit to Japan in May, Trump said he was expecting to announce "some things" on trade negotiations in August, but no firm deadline has been set yet for an agreement.

The two main trade negotiators, Japan's Economy Minister Toshimitsu Motegi and U.S. Trade Representative Robert Lighthizer are slated to meet in Washington on Wednesday and Thursday.

The data showed that Japan had an overall trade deficit of 249.6 billion yen last month, a 9.8-percent increase year-on-year.

Japan's trade deficit with China -- the 16th consecutive monthly deficit -- stood at 383.8 billion yen.

With the European Union, Japan booked a trade deficit of 67.9 billion yen.

© 2019 AFP

©2019 GPlusMedia Inc.

28 Comments
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When you have someone else wants you are going to do whatever it takes to get it. Seems to me that Japan wants what America is selling, and not the reverse.

Abe is going to have a hard time equaling things out here!

-2 ( +1 / -3 )

Japan's trade deficit with China -- the 16th consecutive monthly deficit -- stood at 383.8 billion yen.

Looks like Japan needs to negotiate a new trade deal with China too.

We'll get a deal with Japan before we get one with China.

-2 ( +0 / -2 )

Seems to me that Japan wants what America is selling, and not the reverse.

You seem to be mistaken. Japan has a trade surplus with USA. What this means is, The USA is buying far more Japanese goods than Japan buys from USA. And this is increasing. Unfortunately for USA, there are not many of their goods Japan wants.

-2 ( +3 / -5 )

Nothing like reports of a soaring trade surplus, just as trade negotiations are about to begin. The elephant in the room is that the globalist project is under siege on multiple fronts and the days of such huge lopsided imbalances are just about at an end.

0 ( +0 / -0 )

You seem to be mistaken. Japan has a trade surplus with USA. What this means is, The USA is buying far more Japanese goods than Japan buys from USA. And this is increasing. Unfortunately for USA, there are not many of their goods Japan wants.

My mistake, I did mean to write the opposite, have no idea why but my mistake non the less.

However, my intent was to say that Japanese trade restrictions make it near to impossible for many US products to make it to the market here!

It is unfortunate for the JAPANESE , and the way Trump is, I wont be surprised to see Japan make concessions!

There is no reason to be paying 500 yen or more for butter, or 300 yen per 100 grams for chuck steak!

Not to mention medicines and other pharmaceuticals along with countless numbers of other products that would benefit the consumers here!

5 ( +5 / -0 )

Meanwhile, Japan's deficit with China spiked. Both are related to the uncertainty Trump has engendered with these nonsensical and counterproductive tariffs. He will doubtless tweet his misreading of the situation within hours.

1 ( +1 / -0 )

Japanese trade restrictions make it near to impossible for many US products to make it to the market here!

Can you give a few examples?

-2 ( +2 / -4 )

Japanese trade restrictions make it near to impossible for many US products to make it to the market here!

Can you give a few examples?

Rice.

5 ( +5 / -0 )

Yubaru, like American vehicles? The US has pulled out of that market.

-2 ( +1 / -3 )

If the US made stuff we want, we would buy it. That is how trade works. I hear that there are lots of meetings being held by American companies who are very successful in Japan to try to figure out ways to keep Trump from ruining everything for them.

-3 ( +0 / -3 )

Rice.

9% of Japan's rice is imported, most of that from California.

So how does your claim fit this:

Japanese trade restrictions make it near to impossible for many US products to make it to the market here!

1 ( +1 / -0 )

Japanese trade restrictions make it near to impossible for many US products to make it to the market here! 

Can you give a few examples?

He gave the example of US Beef. You won’t believe how low prices are for meats in the US. There is also citrus and tobacco off the top of my head. Japan also restricts by number or quantitative restrictions.

The Japanese industrial sector contrasts sharply with the agriculture sector. We know how efficient the automobile, steel, snd consumer electronics are but Japanese agriculture is inefficient to US agriculture in terms of production and costs of cultivation.

Abe and the LDP depend on the farm vote and are reluctant to do anything that would affect the agricultural community. Yet while the US had made its market comparatively open, the Japanese have been unwilling to open its own borders to American agricultural goods, which have a demonstrated comparative advantage.

The Japanese are good at making cars and can sell them to the US. The US is good at growing farm products and meats but can’t sell them to Japan. I think that is where the frustration is and not so much

Unfortunately for USA, there are not many of their goods Japan wants.

as many tend to think. It isn’t so much that “we prefer Japanese eggplant” or “Japanese beef taste better” that is the problem, the US products and its comparative advantage and low prices don’t have a chance to compete due to barriers.

4 ( +4 / -0 )

Rice.

Sure, but I'm thinking more of uniquely American products being kept out by uniquely Japanese restrictions. Agriculture is highly regulated everywhere so rice, meat, dairy and other foodstuffs aren't the best examples. Virtually every industrialised country (including the US) imposes quotas and tariffs on agricultural goods, and of all the countries which regulate agriculture, Japan is probably the most justified given its precariously low food self-sufficiency rate. It's also questionable whether US rice would sell in Japan even if all tariffs and quotas were abolished. If price became the main selling point, larger and closer exporters like Thailand and Vietnam would likely dominate the market.

9% of Japan's rice is imported, most of that from California.

And I believe most of the foreign rice gets converted to animal feed and even sent to Africa as foreign food aid.

1 ( +1 / -0 )

YuriOtani: "Yubaru, like American vehicles? The US has pulled out of that market."

I see more and more Japanese driving American vehicles these days. I personally believe Japanese cars are superior (don't pat yourself on the back unless you help design and build them), but they are not powerful cars. American cars are gas guzzlers but last far longer. How many times in Japan have you heard at the biannual car check, "Sorry... we don't have the parts... it would cheaper to buy a new car than repair your current one" same with all electronics here, to keep the market going? The answer is, about 8 years. American cars can last decades. If you disagree with this, I'd like you to show me a 1950s or so collectible Japanese car.

5 ( +6 / -1 )

Rice.

9% of Japan's rice is imported, most of that from California.

So how does your claim fit this:

Japanese trade restrictions make it near to impossible for many US products to make it to the market here!

Imported rice is subjected to a very high tariff. Other countries including the USA do not have the same level of tariff.

2 ( +2 / -0 )

Imported rice is subjected to a very high tariff. Other countries including the USA do not have the same level of tariff.

Ok, but you gave rice as an example of something near to impossible to get to market, yet it's got nearly a 10% share of the market, and clearly is not impossible to get to market here.

0 ( +1 / -1 )

Purchases of U.S. jets and weapons are not included in the trade account. If included, the figures will be different.

0 ( +1 / -1 )

@smithinjapan

I haven’t had that experience. They want consumers to buy new cars is what it is but I’m not sure quality is the problem. You can drive Honda’s and Toyoda’s forever. They never die.

My sister’s Toyoda Sienna has 225,000 miles (362,000 km) on it. It drives fine. I know a guy who drives a Honda Accord with over 400,000 miles (643,000 km)!

2 ( +2 / -0 )

Purchases of U.S. jets and weapons are not included in the trade account. If included, the figures will be different.

And neither are some of the most quintessential American-ish products like the iPhone, Levi's Jeans or Wilson baseball gloves. These are all counted under Japan's trade deficit with China.

0 ( +0 / -0 )

Can you give a few examples?

Reread my post,

1 ( +1 / -0 )

 I'd like you to show me a 1950s or so collectible Japanese car.

There are a few, but the costs involved in keeping them on the road are outrageous here. Every three years the inspection, and after I believe it's 12 or 15 years, it becomes yearly.

1 ( +1 / -0 )

quercetum: "I haven’t had that experience. They want consumers to buy new cars is what it is but I’m not sure quality is the problem. You can drive Honda’s and Toyoda’s forever. They never die."

With older vehicles, MAYBE. The ones with mostly moving parts that you CAN replace if you know how to look, but not the modern cars with mostly computerised parts.

"My sister’s Toyoda Sienna has 225,000 miles (362,000 km) on it. It drives fine. I know a guy who drives a Honda Accord with over 400,000 miles (643,000 km)!"

Yeah? Where do they drive them? I bet not in Japan, because the automobile industry wouldn't allow it, claiming they don't have the parts anymore. That said, you give a couple of examples, but I ask again, how many car collectors have Japanese cars in their midst? My dad's not exactly a collector, but he has a 1950's Ford that he can still drive around, with white-wall tires and all (he needs to get the seatbelts fixed by law).

It's like in my old apartment; I had a refrigerator from the 70s that lasted until 2006. The new refrigerator I replaced it with lasted 8 years. Tried to repair it myself but there was a problem with the condenser. Called Sharp, they said, "Sharp is no longer an independent company and we don't have the parts. It'll cost you more to get them and have it repaired than to buy a new refrigerator." This nation is still the same bubble-era 'use and throw away' that it always was, but is just a bit more subtle about it.

4 ( +4 / -0 )

"Purchases of U.S. jets and weapons are not included in the trade account. If included, the figures will be different."

Yes they are. Aircraft is a durable good. It is listed under transportation/ aircraft. For weapons, it would depend on the type of weapon. Here is an example:

77 Bombs, grenades, ammunition $4.1 billion -0.1%

America shipped 4.1 biilion worth bombs in 2018

-1 ( +1 / -2 )

"American cars can last decades. If you disagree with this, I'd like you to show me a 1950s or so collectible Japanese car."

Bla, bla, bla....

Well, watch all 3 parts of the links I've posted; it's called "killing a Toyota"

Come back with similar tests done with "Murican" car(s).

https://www.youtube.com/watch?edufilter=NULL&v=xnWKz7Cthkk

https://www.youtube.com/watch?edufilter=NULL&v=xTPnIpjodA8

https://www.youtube.com/watch?edufilter=NULL&v=kFnVZXQD5_k

@Quercetum,

I think you'd like to see these too.

-2 ( +0 / -2 )

I wouldn't blame American cars not selling well in Japan on Japanese government.

The truth is that Japan has become a low-income country with 40% of workers being low-wage irregular workers making $30K or less per year, and you can't afford car at this level of salary. If American officials want to sell American cars, try China or Korea instead, whose middle and upper class are now far wealthier than Japan and can afford Tesla, Cadillacs and Lincolns.

What Japanese government officials need to do is to convince US government officials that Japan is now a low-income country and is now in the Post-Automobile era, can't afford regular-sized automobiles from anywhere, not even from Japan.

What Japanese government officials can do is to offer Japan's agricultural product market; this has the double effect of appeasing Trump's rural support base while lowering food cost in Japan.

2 ( +2 / -0 )

Not to mention medicines and other pharmaceuticals along with countless numbers of other products that would benefit the consumers here!

---

What "countess" other products America produce the days?

And did you know that Bernie Sanders, a runner of the presidency, organized caravans to Canada for medicines?

Now get out the bubble and face the reality that your dear Murica has become a bloody joke

-3 ( +0 / -3 )

@pacifiwest

You can't fit regular-sized automobiles from the US anywhere in Japan,

The Ford Focus parked in my central Tokyo neighbourhood fits quite nicely. And yes, the steering wheel is on the right. In fact, Ford and Mazda jointly developed that model's platform. The biggest private vehicle in my area is a Toyota FJ Cruiser, which does NOT really fit the narrow streets. So let's ban it, eh?

1 ( +1 / -0 )

and you can't fit Americans in regular-sized automobiles from Japan.

Now you stepped in it! I am 196CM, weigh 115 KG, and I drive a Suzuki Wagon R (Mild Hybrid)

Understand the issue before talking out of your nether regions!

0 ( +0 / -0 )

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