TOKYO — Japan saw a trade deficit of 2.76 trillion yen (approximately $18 billion) in January, according to a report released by the Finance Ministry on Wednesday. This deficit has raised concerns, particularly regarding potential tariffs introduced by the U.S. government under President Donald Trump.

Last year, Japan also experienced a trade deficit, but the current figures show a significant increase of 60% compared to January 2024.

Exports in January amounted to 7.86 trillion yen (around $52 billion), reflecting a year-on-year increase of 7% across various sectors, such as machinery, medical products, and ships.

On the other hand, imports reached 10.62 trillion yen (roughly $70 billion), indicating a rise of 16.7% from the previous year. The surge in imports included machinery, computers, and a wide range of food items, as consumer demand strengthened amid a depreciating yen against other currencies.

Despite these trade challenges, consumer spending in Japan is anticipated to remain robust, bolstered by recent wage increases.

Notably, Japan had a positive trade balance of nearly 477 billion yen (about $3 billion) with the United States, attributed to an 8% rise in exports including electrical equipment, automobiles, and raw materials.

Japan is actively seeking an exemption from the U.S. tariffs labeled as “reciprocal tariffs,” particularly those impacting steel and aluminum. This desire for exemption is fueled by the historical importance of the U.S. as one of Japan’s top trading partners.

The recent uptick in both imports and exports aligns with a government report indicating that Japan’s economy outperformed expectations for the October-December quarter.

“The data on Japanese trade hints at a modest economic recovery occurring in this quarter. However, while the rise in exports is promising, it comes with significant uncertainties, particularly due to the looming threat of U.S. tariffs, which casts a shadow over future prospects,” stated Min Joo Kang, senior economist at ING.