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 the United States represents the country’s number one trading partner in terms of Japanese export sales.

The world’s fourth-largest exporter, Japan shipped US$645.2 billion worth of products around the globe in 2016. That figure represents roughly 4% of overall global exports estimated at $16.236 trillion for the prior year.

From a continental perspective, 57.3% of Japan’s total exports by value in 2016 were delivered to other Asian trade partners. North American countries purchased 23.1% of Japanese shipments while 13% worth arrived in Europe.

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 2016. Also shown is each import country’s percentage of total Japanese exports.

  1. United States: US$130.5 billion (20.2% of total Japanese exports)
  2. China: $113.9 billion (17.7%)
  3. South Korea: $46.3 billion (7.2%)
  4. Taiwan: $39.4 billion (6.1%)
  5. Hong Kong: $33.6 billion (5.2%)
  6. Thailand: $27.4 billion (4.3%)
  7. Singapore: $19.8 billion (3.1%)
  8. Germany: $17.7 billion (2.7%)
  9. Australia: $14.2 billion (2.2%)
  10. United Kingdom: $13.7 billion (2.1%)
  11. Vietnam: $13 billion (2%)
  12. Malaysia: $12.1 billion (1.9%)
  13. Netherlands: $11.8 billion (1.8%)
  14. Indonesia: $11.3 billion (1.8%)
  15. Mexico: $10.7 billion (1.7%)

Four-fifths (79.7% by value) of Japanese exports in 2016 were delivered to the above 15 trade partners.

Twelve of these trade partners increased their import purchases from Japan from 2009 to 2016. Gains were led by Vietnam (up 99.8%), Mexico (up 56.8%), United States (up 36.9%), Philippines (up 26%), Thailand (up 23.6%) and Indonesia (up 21.6%).

The three trade partners cutting back on Japanese imports were South Korea (down -2.2%), Singapore (down -4.4%) and Malaysia (down -5.6%).

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 2016, Japan incurred the highest trade deficits with the following countries:

  1. China: -US$42.7 billion (country-specific trade deficit in 2016)
  2. Australia: -$16.2 billion
  3. Saudi Arabia: -$14.6 billion
  4. Qatar: -$9.3 billion
  5. United Arab Emirates: -$9.3 billion
  6. Indonesia: -$6.9 billion
  7. Russia: -$6.1 billion
  8. Ireland: -$5.5 billion
  9. Malaysia: -$5.2 billion
  10. Switzerland: -$4.5 billion

Among Japan’s trading partners that cause the greatest negative trade balances, Japanese deficits with China (up 232.4%), Ireland (up 39.6%) and Malaysia (up 34.4%) grew at the fastest pace from 2009 to 2016.

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.

In 2016, Japan incurred the highest trade surpluses with the following countries:

  1. United States: US$61.1 billion (country-specific trade surplus in 2016)
  2. Hong Kong: $31.7 billion
  3. South Korea: $21.2 billion
  4. Taiwan: $16.4 billion
  5. Singapore: $12.3 billion
  6. Netherlands: $9.5 billion
  7. Thailand: $7.3 billion
  8. United Kingdom: $7.2 billion
  9. Panama: $5.3 billion
  10. Mexico: $4.9 billion

Among Japan’s trading partners that cause the greatest positive trade balances, growing at the fastest-rate were Japanese surpluses with United States (up 76.1% from 2009 to 2016), Mexico (up 22.8%), Thailand (up 18%) and United Kingdom (up 17.9%). The greatest decline in Japan’s top country-surplus was a -58.2% 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 Top Japanese Trade Balances

Research Sources:
The World Factbook, Field Listing: Imports – Commodities, Central Intelligence Agency. Accessed on February 1, 2017

Trade Map, International Trade Centre, www.intracen.org/marketanalysis. Accessed on February 1, 2017

Investopedia, Net Importer Definition. Accessed on February 1, 2017

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