Japan ships fewer cars to US as export growth slows

Japanese carmakers have so far shown no sign of rushing to boost car shipments to the US, which would happen if they anticipated higher tariffs were to be imposed on their products in coming months. (Reuters)
Updated 16 August 2018
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Japan ships fewer cars to US as export growth slows

  • Japan’s exports to the US fell 5.2 percent year-on-year in July, down for a second straight month
  • Shipments to Asia, which account for more than half of Japan’s overall exports, rose 8.0 percent

TOKYO: Japan’s export growth slowed more than expected in July as shipments to the US fell for a second straight month, with the automotive sector down sharply and global trade disputes casting doubts over foreign demand.
Ministry of Finance (MOF) data out on Thursday showed exports rose 3.9 percent year-on-year in July, far below a 6.3 percent increase expected by economists in a Reuters poll. The rise followed a 6.7 percent year-on-year gain in June.
Japan’s exports to the US fell 5.2 percent year-on-year in July, down for a second straight month, due to a 12.1 percent decline in car shipments.
“The drop in US-bound car exports was in reaction to brisk sales seen there a year ago, boosted by the solid US economy and declines in oil prices,” said an MOF official in charge of compiling the data.
“We cannot say whether it was affected by trade tensions with the US.” US President Donald Trump has made the threat of heavy tariffs a core part of his agenda, with an eye on the US auto sector’s trade deficit with countries such as Germany and Japan, raising speculation about restrictions on US-bound car exports.
Japanese carmakers have so far shown no sign of rushing to boost car shipments to the US, which would happen if they anticipated higher tariffs were to be imposed on their products in coming months.
“While caution is heightening over US trade policy, US car sales are levelling off, causing Japan’s car exports to the US to level off as well,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
“If capital outflows from emerging economies accelerate on top of this, it would cause a marked slowdown in global economy, further weighing on Japan’s exports.” Imports from the US rose 11.0 percent in the year to July, led by crude oil, motors and liquefied petroleum gas.
As a result, Japan’s trade surplus with the US fell 22.1 percent year-on-year to ¥502.7 billion ($4.55 billion). Exports to China, Japan’s largest trading partner, rose 11.9 percent in July from a year ago.
Shipments to Asia, which account for more than half of Japan’s overall exports, rose 8.0 percent, led by semiconductor production equipment and electronics parts for China and sales of steel to Thailand.
Overall imports rose 14.6 percent in the year to July, roughly matching economists’ median estimate, resulting in a trade deficit of ¥231.2 billion, vastly exceeding the expected ¥50 billion.
Thursday’s trade figures came after gross domestic product (GDP) data last week showed Japan’s economy, the world’s third largest, rebounded in the second quarter from a January-March dip.
Analysts say global economic growth is likely to support Japan’s exports, but international trade conflicts are an ever-present risk to Japan’s export-reliant economy.
The impact on the broader economy from higher US tariffs on Japanese automotive exports would be significant, they say.
Japan’s economy grew at an annualized rate of 1.9 percent in the second quarter on the back of household and business spending, recovering from an earlier contraction.


US in criminal probe of China's Huawei

Updated 17 January 2019
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US in criminal probe of China's Huawei

  • The Wall Street Journal said the US justice department is looking into allegations of theft of trade secrets from Huawei's US business partners
  • Huawei forcefully denied accusations that his firm engaged in espionage on behalf of the Chinese government

WASHINGTON: US authorities are in the "advanced" stages of a criminal probe that could result in an indictment of Chinese technology giant Huawei, a report said Wednesday.
The Wall Street Journal, citing anonymous sources, said the Department of Justice is looking into allegations of theft of trade secrets from Huawei's US business partners, including a T-Mobile robotic device used to test smartphones.
Huawei and the Department of Justice declined to comment on the media report.
However, Huawei noted that "Huawei and T-Mobile settled their disputes in 2017 following a US jury verdict finding neither damage, unjust enrichment nor willful and malicious conduct by Huawei in T-Mobile's trade secret claim."
The move would further escalate tensions between the US and China after the arrest last year in Canada of Huawei's chief financial officer Meng Wanzhou, who is the daughter of the company founder.
The case of Meng, under house arrest awaiting proceedings, has inflamed US-China and Canada-China relations.
Two Canadians have been detained in China since Meng's arrest and a third has been sentenced to death on drug trafficking charges -- moves observers see as attempts by Beijing to pressure Ottawa over her case.
Huawei, the second-largest global smartphone maker and biggest producer of telecommunications equipment, has for years been under scrutiny in the US over purported links to the Chinese government.
Huawei's reclusive founder Ren Zhengfei, in a rare media interview Tuesday, forcefully denied accusations that his firm engaged in espionage on behalf of the Chinese government.
The tensions come amid a backdrop of President Donald Trump's efforts to get more manufacturing on US soil and slap hefty tariffs on Chinese goods for what he claims are unfair trade practices by Beijing.
In a related move, lawmakers introduced a bill to ban the export of American parts and components to Chinese telecom companies that are in violation of US export control or sanctions laws -- with Huawei and fellow Chinese firm ZTE the likely targets.
"Huawei is effectively an intelligence-gathering arm of the Chinese Communist Party whose founder and CEO was an engineer for the People's Liberation Army," said Republican Senator Tom Cotton, one of the bill's sponsors.
Democratic Senator Chris Van Hollen said in the same statement: "Huawei and ZTE are two sides of the same coin. Both companies have repeatedly violated US laws, represent a significant risk to American national security interests and need to be held accountable."
Last year, Trump reached a deal with ZTE that eases tough financial penalties on the firm for helping Iran and North Korea evade American sanctions.
Trump said his decision in May to spare ZTE came following an appeal by Chinese President Xi Jinping to help save Chinese jobs.