Japan racks up $15 billion in trade deficit in the first half

TOKYO

Japan sank into a trade deficit of 2.2 trillion yen ($15 billion) for the first six month of this year, according to government data released on Thursday, as exports were hit by President Donald Trump’s tariffs .

In June, Japan's exports slipped 0.5 percent from a year earlier after its shipments of vehicles and other products were slapped with a 25 percent tariff.

Trump has postponed implementing that higher import duty until Aug. 1, to allow time for negotiations but so far no deal has been reached.

Exports in June totaled nearly 9.2 trillion yen ($62 billion), in the second straight month of declines. Imports in June rose 0.2 percent to 9 trillion yen ($61 billion), the Finance Ministry said. That left a trade surplus of 153 billion yen (just over $1 billion).

Japan's exports to the United States fell 11 percent in June, with auto exports plunging 25 percent. 

In the first half of the year, Japan's exports totaled 53.4 trillion yen ($360 billion), up 3.6 percent, while imports rose 1.3 percent to 55.6 trillion yen ($375 billion).

Japan and the U.S. have been holding trade talks, with Japanese officials stressing that Japan is a key U.S. ally.

Trump has focused on rice, a sector traditionally protected from foreign competition for the sake of Japan's food security. Japan imports more than 300,000 tons of rice a year from the U.S., according to various data, although some of that is used for animal feed.

Japan’s economy contracted at an annual rate of 0.7% in the first quarter of this year compared to the previous quarter, partly due to slowing exports.