Japanese exports to exceeded Japan’s imports from North America by $58.3 billion in 2014.
The fact that Japan earns these trade surpluses indicates Japanese competitive advantages albeit for a specific set of export products highlighted below.
These major product supply advantages provide a silver lining for the grim fact that Japan carried the world’s fourth-biggest trade deficit during 2014, lagging China’s $384.3 billion trade surplus by over half a trillion dollars.
Japan’s -$138.4 billion trade deficit in 2014 has demonstrated the massive growth in red ink since 2010 when its trade balance stood at a positive $75.7 billion.
Japan Major Product Supply Advantages
Top 10
Presented in descending order, the following list showcases the general product categories under which Japan earned the highest trade surpluses in 2014.
- Vehicles : US$121.2 billion (36.8% of all product surpluses)
- Machinery: $67.7 billion (20.5%)
- Iron and steel: $24.9 billion (7.6%)
- Optical, technical and medical apparatus: $15.6 billion (4.7%)
- Ships, boats: $12.4 billion (3.8%)
- Plastics and plastic articles: $9.8 billion (3%)
- Organic chemicals: $8.3 billion (2.5%)
- Rubber and rubber articles: $7.3 billion (2.2%)
- Articles of iron or steel: $6 billion (1.8%)
- Copper: $5.1 billion (1.6%)
The above top 10 product categories represent 89.3% of Japan’s overall product-category surplus subtotal which amounted to $303.9 billion. For that subtotal, 27 of Japan’s 97 general product categories delivered a surplus in 2014.
Growth
Japan enriched its trade surplus amounts at the fastest-pace during 2010 to 2014 under the product categories below.
- Miscellaneous manufactured articles: Up 110% since 2010 (US$1.4 billion)
- Organic chemicals: Up 41.4% ($8.3 billion)
- Manmade staple fibers: Up 11.8% ($1.4 billion)
- Soaps, lubricants, candles: Up 7.9% ($1.2 billion)
- Base metal tools, cutlery: Up 3.3% ($2.2 billion)
Detail
From the perspective of the more detailed 4-digit harmonized tariff system (HTS) level, below are 15 products that enabled Japan to achieve the highest surpluses in its international trade with other countries.
- Cars: US$78.3 billion
- Automobile parts/accessories: $24.9 billion
- Cruise/cargo ships, barges: $11.8 billion
- Machinery for making semi-conductors: $10.4 billion
- Trucks: $10.2 billion
- Integrated circuits/microassemblies: $8.7 billion
- Heavy machinery (bulldozers, excavators, road rollers): $8.5 billion
- Hot-rolled iron or non-alloy steel products: $7 billion
- Cyclic hydrocarbons: $6.8 billion
- Printing machinery: $6.8 billion
- Miscellaneous machinery: $6.4 billion
- Liquid crystal/laser/optical tools: $6.2 billion
- Rubber tires (new): $5.3 billion
- Piston engine parts: $5.2 billion
- Flat-rolled other alloy steel products: $5.1 billion
Among these cyclic hydrocarbons had the fastest-growing Japanese surplus with a 30% gain since 2010. In second place were liquid crystal/laser/optical tools up 22.9% while exported machinery for making semi-conductors moved ahead in value by a modest 2.2%.
JapanMajor Product Supply Advantages by Country
Top 10
Presented in descending order, the following list shows with which trade partners Japan earned the highest trade surpluses in 2014.
- United States: US$55.6 billion (29.2% of Japanese country-specific surpluses)
- Hong Kong: $35.9 billion (18.8%)
- South Korea: $15.9 billion (8.4%)
- Taiwan: $14.4 billion (7.6%)
- Singapore: $12.9 billion (6.8%)
- Thailand: $9 billion (4.7%)
- Netherlands: $8.6 billion (4.5%)
- Panama: $6.9 billion (3.6%)
- Mexico: $6.2 billion (3.3%)
- United Kingdom: $4.5 billion (2.4%)
The above 10 trade partners represent 89.3 % of Japan’s subtotal surplus of $190.4 billion from the 135 geographic entities with which Japan demonstrated competitive trade advantages.That subtotal excludes the 81 trade partners with which Japan incurred trade deficits.
Growth
Japan enriched its trade surplus amounts with the countries below at the fastest-pace during 2010 to 2014.
- Niue: Up 38,779% since 2010 (US$5.4 million)
- Somalia: Up 3,370% ($3.1 million)
- Zambia: Up 594.3% ($69.5 million)
- Northern Mariana Is: Up 330.5% ($37.4 million)
- Turks/Caicos Is: Up 319% ($4 million)
- Kyrgyzstan: Up 250.6% ($125.3 million)
- Jordan: Up 226.7% ($436 million)
- Guinea-Bissau: Up 219.6% ($2 million)
- Montenegro: Up 152.5% ($5.6 million)
- Georgia: Up 150.7% ($371 million)
From the above list, Japan showed major product supply advantages over trade partners with comparatively small populations and for generally small surplus amounts.
US
Below are the products that gave Japan the highest surpluses in its international trade with the United States.
- Cars: US$33 billion (59.4% of Japan’s surplus versus US)
- Automobile parts/accessories: $7.8 billion (14%)
- Printing machinery: $3 billion (5.4%)
- Aircraft parts: $3 billion (5.3%)
- Heavy machinery (bulldozers, excavators, road rollers): $2.8 billion (5.1%)
- Piston engines: $1.7 billion (3%)
- Piston engine parts: $1.7 billion (3%)
- Machinery for making semi-conductors: $1.4 billion (2.5%)
- Rubber tires (new): $1.3 billion (2.4%)
- Heterocyclics, nucleic acids: $1.3 billion (2.4%)
Among these, aircraft parts had the fastest-growing Japanese surplus with the US posting a 48.7% gain. In second place were heterocyclics and nucleic acids up 19% and piston engine parts ahead by 6.3% from 2010 to 2014.
Hong Kong
Below are the products that gave Japan the highest surpluses in its international trade with Hong Kong.
- Integrated circuits/microassemblies: US$3.5 billion (9.8% of Japan’s surplus vs. Hong Kong)
- Processed petroleum oils: $3 billion (8.4%)
- Gold (unwrought): $1.5 billion (4.2%)
- Solar power diodes/semi-conductors: $1.5 billion (4.2%)
- Lower-voltage switches, fuses: $1.1 billion (3.2%)
- Electrical capacitators: $1 billion (2.9%)
- TV receiver/transmit/digital cameras: $700.7 million (2%)
- Printing machinery: $641.4 million (1.8%)
- Liquid crystal/laser/optical tools: $629.6 million (1.8%)
- Watch components, assembled: $604.6 million (1.7%)
Among these, refined petroleum oils had the fastest-growing Japanese surplus with Hong Kong posting a 72.1% gain from 2010 to 2014.
Korea
Below are the products that gave Japan the highest surpluses in its international trade with South Korea.
- Machinery for making semi-conductors: US$2 billion (12.7% of Japan’s surplus versus Korea)
- Cyclic hydrocarbons: $2 billion (12.4%)
- Plastic plates, sheets, film, tape, strips: $1.8 billion (11%)
- Optical fiber cables, sheets, plates: $1.4 billion (8.8%)
- Iron or steel scrap: $1.3 billion (7.9%)
- Coal tar oils (high temperature distillation): $1.1 billion (7%)
- Hot-rolled iron or non-alloy steel products: $1 billion (6.6%)
- Chemical industry products/residuals: $875.9 million (5.5%)
- Acyclic hydrocarbons: $803.1 million (5%)
- Iron or non-alloy steel products (semi-finished): $651.6 million (4.1%)
Among these, acyclic hydrocarbons had the fastest-growing Japanese surplus with South Korea posting a 247.2% gain. In second place were high-temperature-distilled coal tar oils up 153% from 2010 to 2014.
See also Japan’s Top 10 Exports, Highest Value Japanese Export Products, Japan’s Top 10 Imports and Japan’s Top Import Partners
Research Sources:
The World Factbook, Country Profiles, Central Intelligence Agency. Accessed on November 30, 2015
Trade Map, International Trade Centre. Accessed on November 30, 2015
Investopedia, Net Exports Definition. Accessed on November 30, 2015