Key points
- July exports -2.6pc yr/yr vs forecast -2.1pc
- Drop largest since Feb 2021
- Auto prices rise for first time in six months
ISLAMABAD: Japanese automakers, until recently, absorbed the tariffs to keep US retail prices steady, but no longer.
According to Nikkei Asia, they are passing some of the expense of US tariffs through to American car buyers, a change from their strategy of absorbing the impact, new data shows.
Biggest monthly drop
Japan’s exports posted the biggest monthly drop in about four years in July, government data showed on Wednesday, as the impact of U.S. tariffs intensified, raising concerns about the outlook for the export-reliant economy.
According to Reuters, total exports from the world’s fourth-largest economy dropped 2.6 per cent year-on-year in July in value terms, the biggest monthly drop since February 2021, when exports fell 4.5 per cent.
Automotive components
Exports to the United States in July fell 10.1 per cent from a year earlier, with automobiles slumping 28.4 per cent and automotive components down 17.4 per cent.
However, automobile exports fell just 3.2 per cent in volume terms, suggesting Japanese automakers’ price cuts and efforts to absorb additional tariffs have partly shielded shipments.
