# Trump’s Chances of Achieving a Trade Surplus with Japan Seem Unlikely

- Link: https://www.thailand-business-news.com/japan/195982-trumps-chances-of-achieving-a-trade-surplus-with-japan-seem-unlikely
- Published: 2025-02-20T14:11:50+07:00
- Author: Fujiko Takahashi

**Japan’s trade surplus with the U.S. is unlikely to turn into a deficit, as U.S.
export growth remains insufficient, timing delays persist, and Japanese demand continues
to decline, despite President Trump’s efforts to reduce it.**

**Key View**

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 * We expect Japan’s trade surplus with the US is unlikely to turn into a deficit
   because US exports to Japan would have to increase dramatically—an outcome that
   appears improbable.
 * Increasing US LNG exports to Japan will not significantly alter the trade balance
   due to time lags, declining Japanese demand, and pricing disadvantages of US 
   LNG.
 * More fundamentally, the US trade deficit reflects higher Japanese savings at 
   home and investment in the US due to its higher growth outlook. Tariffs are unlikely
   to offer a long-term solution.

To be clear, we do not take US President Trump’s position that a trade deficit is
necessarily a problem. That said, his clear desire to narrow the bilateral goods
trade deficit with Japan is worth addressing. Trump has not explicitly stated his
goal for the U.S.-Japan trade balance, but it is reasonable to assume that he would
want to eliminate the trade deficit by the end of his second term. **Given Japan’s
USD68.5bn trade surplus with the U.S. in 2024, achieving balance would require either
a sharp reduction in Japanese exports to the U.S. or a significant increase in U.
S. exports to Japan.**

In recent years, former President Donald Trump has consistently emphasized the importance
of achieving a trade surplus with Japan, viewing it as a critical component of his
broader economic strategy. However, experts believe that realizing this goal remains
challenging due to Japan’s well-established trade relationships and economic stability.
The intricate dynamics of international markets, coupled with Japan’s strong yen
and diverse export portfolio, create significant barriers to achieving a favorable
balance for the U.S.

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Furthermore, Japan has a robust industrial base that produces high-quality goods,
particularly in technology and automotive sectors. These industries are not only
competitive but are also fueled by a strong domestic demand, which limits the avenues
for U.S. exports to gain a foothold. While Trump sought to renegotiate trade agreements
to bolster American exports, these efforts may not significantly shift the existing
trade balance given Japan’s economic resilience.

Moreover, global economic factors, such as supply chain disruptions and fluctuating
demand caused by the pandemic, continue to affect trade patterns. Until a comprehensive
and strategic approach is adopted, Trump’s ambition of achieving a trade surplus
with Japan remains an uphill battle. The intricate nature of trade relations indicates
that while aspirations may motivate policy changes, tangible results are more complex
to attain.
[Read More](https://www.fitchsolutions.com/bmi/country-risk/trump-unlikely-achieve-trade-surplus-japan-18-02-2025)