The Rising Tide of Protectionism Sinks Japan's Economy
Japan’s economy has taken a significant turn for the worse, entering a period of contraction for the first time in six quarters. Data released by the government on Monday confirmed that Gross Domestic Product (GDP)—the total value of goods and services—shrank by 0.4% on a quarterly basis during the July-September period, translating to a steep annualized decline of 1.8%. This economic downdraft is the result of a complex interplay between external trade shocks and domestic regulatory headwinds. The Double Blow of Trade and Housing The primary catalyst for the slowdown is a sharp deterioration in foreign trade. Exports—the lifeblood of the nation—fell by a considerable 4.5% year-on-year in the third quarter. This decline is a direct consequence of the trade policy instituted by the Trump administration, which has imposed a 15% tariff surcharge on nearly all Japanese imports to the United States. For export-heavy giants like Toyota, the elevated duties have severely eroded the profitabi...