"Japan's Economy Declines More Than Expected, Partly Due to Tariffs"

Japan's economy has shrunk 0.2% in January through March, which was more than experts were anticipating. With the trade war continuing and Japan still not happy with President Trump's tariffs, more concerns grow that, unless something changes, a recession is around the corner for the country.

Japan's economy had grown 0.6% late last year. It had also experienced a contraction early in 2024.

Economist Ryutaro Kono told the press, "Uncertainty is greatly heightened by the Trump tariffs, and it is likely that the economic slowdown trend will become clearer from [the second quarter] onward."

The economic issues Japan is facing do not all stem from the tariffs. Japan was already seeing a drop in domestic and foreign sales. However, the tariffs have made a difficult situation much worse, and economies around the world are being thrown off by the trade war. President Trump proposed putting 24% tariffs on Japan, one of America's closest trading partners.

The Dai-ichi Life Research Institute's Yoshiki Shinke remarked, "The possibility of the economy entering a recession cannot be ruled out, depending on the degree of downward pressure caused by the tariff issue."

The Bank of Japan has had to change its growth estimates and cautioned that the tariffs are creating economic uncertainty, not just in Japan but across the globe.

Capital Economics's Marcel Thieliant opined, "With U.S. tariffs set to weigh on export growth, the Bank of Japan's decision to become more downbeat about the economic outlook at its previous meeting seems to be vindicated."

Moody's Analytics' Stefan Angrick pointed to challenges being faced by the Japanese government, especially with elections around the corner in July.

"[Prime Minister Shigeru] Ishiba's government has so far opposed fiscal support for the economy, a strategy that looked untenable even before the trade war ramped up," he stated. "With public support slipping, a policy pivot may become unavoidable, but could arrive too late to make a difference."

Source: Fortune

Image: Masahiro Sugimoto/The Yomiuri Shimbun/AP

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Danica Davidson is the author of the bestselling Manga Art for Beginners with artist Melanie Westin, plus its sequel, Manga Art for Everyone, and the first-of-its-kind manga chalk book Chalk Art Manga, both illustrated by professional Japanese mangaka Rena Saiya. Check out her other comics and books at www.danicadavidson.com.

Source:Otakuusamagazine

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