U.S.–Japan Trade Relations: Exports, Imports & Sanctions

Introduction: A Bilateral Trade Partnership

Japan and the United States are two of the premier forces in trade around the world. The two countries depend heavily on each other in a variety of trade areas, from electronics to tourism and banking. Together, they form a formidable bond of trade that dominates the world market and the global economy.

In 2002, Japan's total foreign trade was 52,109 billion yen. The portion traded with the United States was 14,873 billion yen, or 28% of Japan's total foreign trade (Editors, 2003). Conversely, the United States trades only about 9% of its foreign trade with Japan, so a deficit between the two countries has persisted for many years. This seems surprising given that Japan is a smaller country with a lower population and less land area than the United States. However, many Japanese trade items are extremely popular in America, and the deficit has continued to grow.

Japanese Exports

Japan exports a wide variety of items, from motor vehicles to electronics. Its major market is Southeast Asia, which accounts for 37% of Japanese exports, followed by the United States at 28%. Japanese automobiles are popular worldwide and are extremely common in the United States. From Subaru to Honda, Japanese automakers exported 4,468,092 billion yen worth of automobiles to the United States in 2002, averaging roughly 493,000 vehicles (not including trucks and motorcycles). Japan also exported approximately 889,898 billion yen worth of automobile parts to the United States (Editors, 2003).

The country also exports a large volume of electronic goods, including cameras, computers, televisions, and music players, along with some agricultural goods and silk fabric. Japan's exports generally keep the country in sound economic condition, although it did face a recession in the late 1990s. The Japanese economy has experienced a series of peaks and valleys throughout its history, and Japanese leaders hope to build a stronger, more durable economy by expanding trade relationships with foreign partners.

Japanese Imports

Japan imports nearly 100 billion yen less in goods and services than it exports. Approximately 22% of its imports come from the United States. The country imports mainly fossil fuels—which have been declining in domestic availability for decades—and raw materials, especially food, because Japan cannot produce enough to feed its large and densely populated nation.

One of the major obstacles to Japanese importing is the set of trade restrictions the country places on many incoming goods. For example, Japan severely limits the number of American cars that may be imported each year. In fact, Japan's only fully free trade agreement with another nation is with Singapore, a small country that has little effect on Japan's long-term trade volumes. Clearly, both Japan and the United States have trade issues that must be addressed. Chief among them are the sanctions imposed by each side that hinder free trade and prevent both nations from reaching their full trade potential with each other.

Conclusion: The Path Forward

Editors. (2004). Third report to the leaders on the U.S.–Japan regulatory reform and competition policy initiative. Retrieved from the United States Trade Representative Web site:

Editors. (2003). Japan statistical yearbook. Retrieved from the Japan Statistics Bureau Web site: http://www.stat.go.jp/english/data/nenkan/index.htm