Japan’s Top Trading Partners

Japan’s Top Trading Partners

by Flagpictures.org

Known as the Land of the Rising Sun, Japan is a major economic and political power in Asia. Yet it is a North American nation–the United States–that serves as Japan’s number one trading partner in terms of Japanese export sales.

The world’s fourth-largest exporter, Japan shipped US$698.2 billion worth of products around the globe in 2017. That figure represents about 4.4% of overall global exports estimated at $15.952 trillion for the prior year.

From a continental perspective, 58.4% of Japanese exports by value are delivered to other Asian countries while 22.3% are sold to North American importers. Japan ships another 12.9% worth of goods to Europe compared to just 1.1% destined for customers in Africa.

Japan’s Top Trading Partners

Top 15

Below is a list showcasing 15 of Japan’s top trading partners, countries that imported the most Japanese shipments by dollar value during 2017. Also shown is each import country’s percentage of total Japanese exports.

  1. United States: US$135.1 billion (19.3% of total Japanese exports)
  2. China: $132.8 billion (19%)
  3. South Korea: $53.3 billion (7.6%)
  4. Taiwan: $40.6 billion (5.8%)
  5. Hong Kong: $35.4 billion (5.1%)
  6. Thailand: $29.4 billion (4.2%)
  7. Singapore: $22.6 billion (3.2%)
  8. Germany: $18.9 billion (2.7%)
  9. Australia: $16 billion (2.3%)
  10. Vietnam: $15.1 billion (2.2%)
  11. United Kingdom: $13.8 billion (2%)
  12. Indonesia: $13.4 billion (1.9%)
  13. Malaysia: $12.8 billion (1.8%)
  14. Netherlands: $12.4 billion (1.8%)
  15. Mexico: $11.3 billion (1.6%)

Four-fifths (80.7% by value) of Japanese exports in 2017 were delivered to the above 15 trade partners.

All of these trade partners increased their import purchases from Japan from 2016 to 2017. Percentage increases in demand ranged from 18.2% for Indonesia, 16.7% for China and 15.9% for Vietnam down to 1.1% for the United Kingdom and 3.4% each for Taiwan and the U.S.

Deficits

As defined by Investopedia, a country whose total value of all imported goods is higher than its value of all exports is said to have a negative trade balance or deficit.

It would be unrealistic for any exporting nation to expect across-the-board positive trade balances with all its importing partners. Similarly, that export country doesn’t necessarily post a negative trade balance with each individual partner with which it exchanges exports and imports.

In 2017, Japan incurred the highest trade deficits with the following countries:

  1. China: -US$31.5 billion (country-specific trade deficit in 2017)
  2. Saudi Arabia: -$24 billion
  3. Australia: -$23 billion
  4. United Arab Emirates: -$13.5 billion
  5. Qatar: -$9.8 billion
  6. Russia: -$7.8 billion
  7. Malaysia: -$6.5 billion
  8. Indonesia: -$6.4 billion
  9. Italy: -$5.4 billion
  10. Chile: -$4.6 billion

Among Japan’s trading partners that cause the greatest negative trade balances, Japanese deficits with Saudi Arabia (up 65.1%), United Arab Emirates (up 45.3%) and Australia (up 40.6%) grew at the fastest pace from 2013 to 2017.

Surpluses

Based on Investopedia’s definition of net importer, a country whose total value of all imported goods is lower than its value of all exports is said to have a positive trade balance or surplus. Overall, Japan posted a $26.9 billion trade surplus for 2017 down by -29.1% from the prior year.

In 2017, Japan incurred the highest trade surpluses with the following countries:

  1. United States: US$61.2 billion (country-specific trade surplus in 2017)
  2. Hong Kong: $33.6 billion
  3. South Korea: $25.2 billion
  4. Taiwan: $15.3 billion
  5. Singapore: $14.1 billion
  6. Netherlands: $10 billion
  7. United Kingdom: $6.7 billion
  8. Thailand: $6.7 billion
  9. Mexico: $5.5 billion
  10. Panama: $4.6 billion

Among Japan’s trading partners that cause the greatest positive trade balances, Japanese surpluses with South Korea (up 18.8%), Singapore (up 14.2%) and Mexico (up 11.7%) grew at the fastest pace from 2016 to 2017.
The greatest year-over-year decline in Japan’s top country-surplus was a -12.6% drop in value for Panama.

These positive cashflow streams clearly indicate Japan’s competitive advantages with the above countries, but also represent key opportunities for Japan to develop country-specific strategies to optimize its overall position in international trade.

Companies

Companies Servicing Japanese Trading Partners

According to the Japan Import Export Directory, the following are examples of entrepreneurial companies that ship products from Japan to its trading partners around the globe. Shown within parenthesis is the product category that the Japanese business specializes in.

  • Aiza Corporation Japan (consumer electronics)
  • Akasaka Diesels Limited (marine engines, generators)
  • Aktio Corp. (construction equipment)
  • Fuji Latex Co., Ltd. (shock absorbers)
  • Japan Algae Co., Ltd. (dietary supplements)
  • Kiramek, Inc. (vehicle security products)
  • Kyodo Co., Inc. (steel)
  • Ochadokoro Sanwa (Japanese Green tea)
  • TMO International Limited (gold, gemstones)
  • Whn Co., Ltd. (new/used cars)


 
See also Top Japanese Trade Balances, Japan’s Top 10 Imports, Highest Value Japanese Export Products and Japan’s Top 10 Major Export Companies

Research Sources:
The World Factbook, Field Listing: Imports – Commodities, Central Intelligence Agency. Accessed on February 2, 2018

Trade Map, International Trade Centre, www.intracen.org/marketanalysis. Accessed on February 2, 2018

Investopedia, Net Importer Definition. Accessed on February 2, 2018

IMPORTERS.com The Online Market for G20 Importers, Japan Import Export Directory. Accessed on November 3, 2015