Japan has reduced its share of the U.S. trade deficit in both recent years and decades.

From January to May 2025, Japan’s share of the Unites States. goods trade deficit was 4.8 percent.

In this period, in bilateral trade, Japanese exports totaled $62.958 billion and U.S. exports were $33.667 billion.

U.S. trade deficit

Hajime Takata, member of the Board of Governors of the Bank of Japan, pointed out that Japan’s share of the U.S. trade deficit fell to 6%, while in the early 1990s it exceeded 50 percent. 

Consequently, Takata considered that Japan’s geopolitical situation is very different now. For reasons of economic security, several plants have returned to the country. A clear example: the boost to semiconductor production in Kumamoto and Hokkaido. Takata said that this picture contrasts with the 1990s, when Japan was the main target of Washington’s containment policies.

Below is the U.S. deficit in goods trade with Japan, in millions of dollars, and Japan’s share of the total United Satates trade deficit in goods, according to Commerce Department data:

• 2018: 67,196 (7.7 percent).
• 2019: 68,984 (8.1 percent).
• 2020: 55,414 (6.1 per cent).
• 2021: 60,163 (5.6 percent).
• 2022: 68,013 (5.8 percent).
• 2023: 71,175 (6.7 per cent).
• 2024: 68,468 (5.7 percent).
• Energy-May 2025: 29,291 (4.8 percent).

Growth rate of the Japanese economy

Takata believes that Japanese companies have managed to overcome commercial frictions and cost competition, driven by the appreciation of the yen. They did so through restructuring centered on wage cuts and cost reductions, even through subsidiaries. However, this process left a lasting consequence: the idea that neither wages nor prices should rise. 

Thus began a long stage of labor stagnation. In addition, Takata warned that this strategy could also mark the beginning of the decline in Japan’s potential growth rate, due to the lack of investment.