Listeners, today's biggest headline in Japan Tariff News and Tracker is the sharp contraction of Japan’s economy following significant US tariffs under the second Trump administration. According to KSAT, Japan’s economy shrank at a 1.8% annual pace in the third quarter of 2025, with exports tumbling 4.5%. This decline is directly tied to US tariffs—a 15% surcharge now affects nearly all Japanese imports to America, scaled down from the previous threat of a 25% rate.

This 15% tariff is part of President Trump’s broader “reciprocal tariffs” policy, which aims to counter trade imbalances by raising rates across a huge range of imported goods. The Trump administration, as detailed by Wikipedia’s summary of tariff developments in his second term, initially spiked the average US tariff rate from 2.5% to as high as 27%, the highest level seen in modern history. Notably, after negotiations and some political pushback, this average has eased to about 17.9% by September 2025. The 15% figure for Japanese imports fits within this context, making Japanese automotive and tech companies most vulnerable, despite their efforts to shift some production abroad to avoid these punishing duties.

Listeners should know that the story behind these tariffs is not just about trade policy but also about global economic ripple effects. The Japanese government attributes the sudden contraction in GDP largely to lost momentum in its export sector—especially carmakers like Toyota and Honda, who have scaled down shipments to the US. Private residential investment in Japan also collapsed, mostly due to complex factors including new building codes, but the trade shock played a leading role in this downturn. Prime Minister Sanae Takaichi, newly in office since October, has pledged stimulus to revive the economy, but these tariffs make her job much harder.

For Japanese and US businesses alike, the impact is clear: trade costs have soared, supply chains have been disrupted, and cautious optimism about recovery hinges on government action and, possibly, upcoming legal challenges in the US courts. In September, the US Court of Appeals ruled that Trump may have exceeded his authority with sweeping tariffs under emergency powers, but for now, those tariffs—including the ones hammering Japanese exports—are still being enforced pending Supreme Court review.

Listeners, that wraps up today’s key stories in Japan Tariff News and Tracker—Japan’s first economic contraction in six quarters, a 15% US tariff now hitting nearly all Japanese imports, and the latest on trade and legal battles shaping the global economic landscape. Thanks for tuning in, and don’t forget to subscribe for the latest updates. This has been a quiet please production, for more check out quiet please dot ai.

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