U.S. 2016 trade gap with Japan was second-largest; deficit with China is half the total

Kyodo

The U.S. trade deficit in goods with Japan was its second-largest in 2016, totaling $68.94 billion, according to new U.S. government data.

The trade gap with China was five times bigger, topping the list at $347.04 billion, the Commerce Department said Tuesday. That was, however, 5.5 percent lower than a year earlier.

The deficit with Germany, the previous No. 2, shrank 13.3 percent to $64.87 billion as shipments to Germany surged 12.4 percent.

The deficit with the European Union narrowed 5.9 percent to $146.34 billion.

Although the deficit with Japan was nearly flat from 2015, U.S. President Donald Trump, given his recent remarks about U.S. trade partners, appears certain to step up criticism against Japan.

The release of the data came ahead of a meeting between Trump and Prime Minister Shinzo Abe in Washington on Friday.

While nearly half of the total U.S. trade deficit is with China, Japan’s share stood at 9.4 percent in 2016, up from 9.2 percent in 2015.

Car imports from Japan totaled $39.26 billion in 2016, compared to $518 million in exports of U.S. cars.

Trump has called Japan’s automobile trade practices “not fair,” saying, “They do things to us that make it impossible to sell cars in Japan.”

Japan was the second-largest exporter of cars to the United States, after Canada. Mexico ranked third and Germany fourth.

The overall U.S. trade deficit in both goods and services widened 0.4 percent in 2016 to $502.25 billion, the third straight year of increases.

Exports shrank 2.3 percent to $2.209 trillion and imports fell 1.8 percent to $2.712 trillion, both down for the second consecutive year.

In Tokyo on Wednesday, the government released data for Japan’s current account surplus in 2016, which rose to a nine-year high of ¥20.65 trillion ($183.66 billion), up 25.8 percent from the previous year.

The current account is one of the widest gauges of international trade. Finance Ministry officials attributed Japan’s 2016 surplus to lower oil prices and a stronger yen, which both pushed down import prices.

In 2016, Japan’s goods trade registered a surplus of ¥5.58 trillion, returning from a deficit of ¥628.8 billion in 2015. Imports dived 16.6 percent to ¥63.31 trillion, while exports fell 8.5 percent to ¥68.89 trillion.

The value of crude oil imports plunged 32.4 percent as average oil prices slid 24.4 percent to $41.58 per barrel in 2016.