By AP with Eleanor Butler
Published on
Japan’s economy sank at an annualised rate of 1.8% in the July to September period, government data showed on Monday, as President Donald Trump’s tariffs sent the nation’s exports spiralling.
The fall in the annualised rate was still smaller than the 0.6% drop that the market had expected.
On a quarter-by-quarter basis, Japan’s GDP, meaning the total value of a nation’s goods and services, slipped 0.4%. That marked the first contraction in six quarters.
A big decline during the quarter came in exports, which were 1.2% down from the previous quarter.
Where possible, some businesses sped up shipments to beat the tariff deadline, inflating some of the earlier data for exports.
On an annualised basis, exports dropped 4.5% in the three months through September.
Imports for the third quarter slipped 0.1%, while private consumption edged up 0.1% during the quarter.
Tariffs are a major blow to Japan’s export-reliant economy, led by powerful automakers like Toyota Motor Corp., although such manufacturers have over the years moved production abroad to avoid the brunt of tariffs.
The US now imposes a 15% tariff on nearly all Japanese imports, down from an earlier rate of 25%.
The new GDP data comes as a challenge for new Prime Minister Sanae Takaichi, who took on the role in October.
Takaichi is already contending with tensions between Japan and China related to disagreements over Taiwan. Earlier this month, the prime minister said that Tokyo could take military action if Beijing attacked the self-governing island, which Beijing views as part of its territory.
Chinese and Japanese officials are expected to hold talks on Tuesday.