Japan is the third largest economy in the world after the United States and China. It is the fourth largest importer of U.S. products after Canada, Mexico and China. Japan is a key member of the international trade system, and its market respects the rule of law and provides strong protections for intellectual and real property rights.
U.S. goods and services trade with Japan totaled an estimated $283.6 billion in 2017. Exports were $114.0 billion; imports were $169.5 billion. The U.S. goods and services trade deficit with Japan was $55.5 billion in 2017.
Japan is currently our 4th largest goods trading partner with $204.1 billion in total (two way) goods trade during 2017. Goods exports totaled $67.6 billion; goods imports totaled $136.5 billion. The U.S. goods trade deficit with Japan was $68.9 billion in 2017.
Trade in services with Japan (exports and imports) totaled an estimated $79.5 billion in 2017. Services exports were $46.4 billion; services imports were $33.1 billion. The U.S. services trade surplus with Japan was $13.4 billion in 2017.
. However, the United States’ goods trade deficit with Japan is its third-largest one in the world. U.S. economic policy toward Japan seeks to address this trade deficit through free, fair, and reciprocal trade.
A fascinating and complex country steeped in history and rich in culture, Japan honors its traditions while serving as an economic and demographic trend setter. Driven by its large middle class consumer base, Japan is a leading consumer and producer of goods and services and exerts significant commercial influence in global markets. In particular, Japan’s technology and manufacturing-related industries play a leading role in the global economy and global supply chains.
As the only Asian representative of the G-7, Japan is the second largest source of foreign direct investment (FDI) in the United States with a cumulative stock of $414 billion. Over the past several years, Japan has been the single largest source of foreign direct investment into the U.S. market, with an inflow over $31 billion in 2015. These investments, in turn, support U.S. jobs and contribute to U.S. economic output and exports.
Japan’s consumer economy is large, broad-based and sophisticated. As a percentage of its population, Japan’s middle class is similar to the United States. Per capita income of $38,900 underpins its strength as a consumer market.
Japan is highly dependent upon the import of natural resources; it is the world’s largest net buyer of food products in the world. The United States is the leading supplier of its agricultural imports, as well as agricultural capital equipment and related technologies.
Japan’s rapidly aging population continues to send ripple effects through its society and economy, shaping present and future demand in economic spheres as disparate as robotics and pharmaceuticals, franchise and real estate.
U.S. companies engage with the Japanese market through a variety of strategies. In addition to the market’s size and wealth, Japanese business partners expose American companies to new technology, rigorous competition, and – in some cases – the opportunity to partner with Japanese firms in third markets.
Treaties & Agreements
Japan and the United States belong to a number of the same international organizations, including the United Nations, G7, G-20, Organization for Economic Cooperation and Development, Asia-Pacific Economic Cooperation forum, ASEAN Regional Forum, International Monetary Fund, World Bank, and World Trade Organization. Japan is also a Partner for Cooperation with the Organization for Security and Cooperation in Europe and an observer to the Organization of American States. In 2019, Japan will assume the G-20 presidency and host numerous ministerial meetings as well as the G-20 Leaders’ Summit in Japan.