TOKYO: Japan’s economy sank at an annualized rate of 1.8% in the July-September period, government data showed Monday, as US President Donald Trump’s tariffs sent the nation’s exports spiraling.
On a quarter-by-quarter basis, Japan’s gross domestic product, or GDP, or the sum value of a nation’s goods and services, slipped 0.4%, in the first contraction in six quarters, the Cabinet Office said.
The annualized rate shows what the economy would have done if the same rate were to continue for a year. The fall was still smaller than the 0.6% drop the market had expected.
A big decline during the quarter came in exports, which were 1.2% down from the previous quarter.
Some businesses had sped up exports, when they could, to beat the tariffs kicking in, inflating some of the earlier data for exports.
On an annualized basis, exports dropped 4.5% in the three months through September.
Imports for the third quarter slipped 0.1%. Private consumption edged up 0.1% during the quarter.
Tariffs are a major blow to Japan’s export-reliant economy, led by powerful automakers like Toyota Motor Corp., although such manufacturers have over the years moved production abroad to avert the blunt of tariffs.
The U.S. now slaps a 15% tariff on nearly all Japanese imports. Earlier the tariffs were 25%.
Japan also faced political uncertainty recently, until Sanae Takaichi became prime minister in October.