US blames Japan as trade deficit soars

America's trade deficit with Japan soared in March, damaging the already dire trade relations between the two countries. Mickey Kantor, the US Trade Representative, blamed the trade deterioration, revealed in figures published yesterday, on the fact that Japanese firms were selling goods at a lower price in the US than at home in order to maintain market share.

The overall deficit shrank by less than analysts had expected, to $9.12bn in March from $9.15bn. The bilateral US deficit with Japan jumped from $4.7bn to $6.1bn, partly because of higher imports of cars.

Mr Kantor said he was concerned that this gap had widened, given the dollar's fall against the yen this year. But he thought it would be unwise to conclude that Japan's sales of cars to America - up from $1.88bn to $2.33bn - had risen in anticipation of trade sanctions. Last week the US imposed punitive 100 per cent tariffs on some makes of Japanese car, following the breakdown of lengthy trade negotiations.

David Bloom, an analyst at James Capel, agreed, saying the bilateral figures were not adjusted for seasonal variations, and March was always an important month for car dealers to build stocks of vehicles and parts. But some analysts held to the theory that US dealers were trying to pre- empt the trade sanctions.

Economists also pointed out that the fall in the US currency would have increased the dollar price of Japanese goods before it led to a lower volume of import shipments and higher volume of exports. This effect alone would have increased the import bill.

There were some brighter spots in the trade figures, too. Although the American deficits with Taiwan and Mexico rose, its big shortfall in trade with China shrank. There were also gains in exports to western Europe and other Asian countries such as South Korea.

Robert Hormats of Goldman Sachs in New York said: "American products look cheaper to other Asian countries." He added that there had been an encouraging rise in exports of industrial and capital goods.

The trade figures hit Wall Street, with the Dow Jones average 34 points down at 4389 by late morning. The dollar slipped too, reaching DM1.4450 and 86.80 yen at noon, but its fall after the trade news was limited by the German mark's weakness.

Increasing the openness of Japanese markets to foreign goods has been a constant theme of US trade policy, and Mr Kantor repeated the call yesterday. He will have an opportunity to meet his Japanese counterpart, Ryutaro Hashimoto, at the annual meeting of the Organisation for Economic Co-operation and Development in Paris next week.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions