The Impact of Japan Export Problems

Japan Export

The Impact of Japan Export Problems

In March of 2010, a news report told of how Japan export had risen 45% in February compared with the same month of the previous year. This seemed to signal a rebound for the small country and renewed hope that economic conditions were about to improve.

The Good Indicators for Japan Export in Early 2010

In the first quarter of 2010, Japan export percentages were riding high. Car shipments to the United States alone had doubled even with Toyota’s safety recalls. Exports to Asia during the period were up 55%, and that is where more than half of Japan exports go. The trade balance had a surplus of over $7 billion, and the only down side was that the recovery seemed to be running out of steam.

In a Moment, a Complete Reversal for Japan Export

The earthquake and tsunami changed the whole face of the landscape. Japan had been the U.S. fourth-largest trading partner, but now the imports have slowed and Japan export by boat to the U.S. is almost non-existent. Japan made up 15% of the overall traffic at the Port of Los Angeles before the disaster, so the country’s absence is noticeable. Japanese car plants have resumed operation, but not at full capacity.

The Effect of the Disaster on the United States

Japan Export have also dropped because of the inability to get into port and refrigeration problems at that end. Fruits were a big export item to Japan, but power outages have limited Japan’s capacity to keep fruits. Some ships diverted cargo to other ports in Japan, and many ships avoided going all together. The loss of the fruit exports amount to about a quarter of a million dollars so far.

How the Lack of Exports Affects the Local Countries

Other Asian countries are affected by the lack of exports from Japan, primarily because of the inability to get auto and electronic components. Taiwan, Thailand, and South Korea use Japan export car and electronics in their own production facilities. Every Asian nation can expect to suffer from the ripple effects of the Japanese problem, including Hongkong and Singapore.

How Japan Export Affects China

China won’t be hurt by Japan export problems as much as some other countries will. Machinery and other exports to Japan should remain rather constant during the reconstruction phase. China won’t be as affected by the lack of autos, electronics, and machinery from Japan, which should resume normal capacity in the second half of the year. India won’t miss trade with Japan as much as it will foreign investment.

Australia stands to have a surge in exports to Japan, as the demand for natural gas and coal grows in the forth quarter. Agricultural products will remain a good export to Japan as will iron ore and coking coal. For the short term, Australia will suffer because of the machinery and equipment it depends on Japan to provide.

If you enjoyed reading about The Impact of Japan Export Problems then see our next article Global Export.

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