Japan’s export growth slowed more than expected in July as shipments to the United States fell for a second straight month, with the automotive sector down sharply and global trade disputes casting doubts over foreign demand. Ministry of Finance (MOF) data out on Thursday showed exports rose 3.9 percent year-on-year in July, far below a 6.3 percent increase expected by economists in a Reuters poll. The rise followed a 6.7 percent year-on-year gain in June. Japan’s exports to the United States fell 5.2 percent year-on-year in July, down for a second straight month, due to a 12.1 percent decline in car shipments. “The drop in US-bound car exports was in reaction to brisk sales seen there a year ago, boosted by the solid US economy and declines in oil prices,” said an MOF official in charge of compiling the data. “We cannot say whether it was affected by trade tensions with the United States.” US President Donald Trump has made the threat of heavy tariffs a core part of his agenda, with an eye on the US auto sector’s trade deficit with countries such as Germany and Japan, raising speculation about restrictions on US-bound car exports. Japanese carmakers have so far shown no sign of rushing to boost car shipments to the United States, which would happen if they anticipated higher tariffs were to be imposed on their products in coming months. “While caution is heightening over US trade policy, US car sales are levelling off, causing Japan’s car exports to the United States to level off as well,” said Takeshi Minami, chief economist at Norinchukin Research Institute. “If capital outflows from emerging economies accelerate on top of this, it would cause a marked slowdown in global economy, further weighing on Japan’s exports.” Imports from the United States rose 11.0 percent in the year to July, led by crude oil, motors and liquefied petroleum gas. As a result, Japan’s trade surplus with the United States fell 22.1 percent year-on-year to 502.7 billion yen ($4.55 billion). Published in Daily Times, August 17th 2018.