President Donald Trump’s tariff strategy seems to be yielding positive results in Japan. The country’s export to the U.S. has dwindled, prompting Japanese firms to ramp up production in their U.S.-based subsidiaries.
Japan’s US Exports Drop, FDI Hits Record High
The export volume from Japan to the US has hit a four-year low, while the overall export numbers remain above the 2024 average, according to a report by Fortune. This shift in production has also led to a surge in foreign direct investment (FDI) from Japan into the U.S.
Japanese manufacturers’ North American subsidiaries outpaced Japan’s overall exports in Q2, with sales growing 6 percentage points faster. In July, Toyota‘s (NYSE:TM) U.S. output jumped 28.5% year-on-year, while production in Japan declined 5.5%.
Marcel Thieliant, the head of Asia-Pacific at Capital Economics, noted that the FDI from Japan to the U.S. is on track to reach a record high this year. The U.S. is expected to receive 47% of …