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Why is Japan's trade slumping now?
Japan's trade has declined recently due to US tariffs on auto and steel exports, which have made Japanese goods more expensive abroad. Additionally, global trade disruptions and political uncertainties have contributed to weaker exports, marking Japan's first contraction in six quarters.
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How are US tariffs affecting Japan's exports?
US tariffs, especially on autos and steel, have increased costs for Japanese exporters, reducing their competitiveness. Although a trade deal in July lowered tariffs from 25% to 15%, the impact of these tariffs continues to slow Japan's export growth.
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What does a trade deficit mean for Japan's economy?
A trade deficit occurs when a country imports more than it exports. For Japan, a narrowing trade deficit suggests reduced export activity, which can slow economic growth and impact employment, especially in export-dependent sectors like automotive and steel industries.
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Could this trade tension lead to a global slowdown?
Yes, ongoing trade tensions, especially between the US and other major economies, can reduce global trade volume. Japan, as a key exporter, is vulnerable to these shifts, which could contribute to a broader slowdown in the global economy.
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What other factors are impacting Japan's trade now?
Besides US tariffs, Japan faces challenges like sluggish domestic consumption, political uncertainties, and shifts in global supply chains. These factors, combined with trade tensions, are creating a complex environment affecting Japan's trade performance.