Japan’s export sector experienced a downturn in May, primarily driven by a significant 25% drop in automobile shipments to the United States. This decline is attributed to the heightened tariffs imposed by President Donald Trump. According to the Finance Ministry, overall exports decreased by 1.7% year-on-year, a figure that, while concerning, was less severe than the anticipated decline forecasted by analysts. Concurrently, imports plummeted by 7.7%, indicative of weakening domestic demand and marking a steeper fall compared to April’s 2% decrease. The trade deficit for May stood at 637.6 billion yen, equivalent to $4.4 billion. Despite ongoing discussions, Japan has yet to secure an agreement with the U.S. to resolve the tariff issue. Prime Minister Shigeru Ishiba, following a meeting with President Trump at the Group of Seven summit in Canada, noted that the two nations remain at odds on several key points. Trump has levied a 25% tariff on Japanese automobiles and a 24% tariff on other goods, with recent statements suggesting potential increases in auto tariffs. Ishiba has underscored Japan’s role as a crucial ally in the bilateral defense alliance with Washington, emphasizing efforts to safeguard national interests. The auto industry, a cornerstone of Japan’s economy, exports over a million vehicles to the U.S. annually. Tokyo has consistently highlighted the contributions of automakers like Toyota and Honda, which manufacture vehicles in North America, bolstering the economy and generating employment.