TOKYO – Japan’s exports expanded faster than expected in October, led by a pick-up in chip equipment demand in China, though fears persist over potential U.S. protectionist trade policies that could hamper future shipments. Japanese businesses are weighing the impact of new and potentially hefty tariffs promised by U.S. President-elect Donald Trump that could disrupt international trade. Total exports in October rose 3.1% from a year earlier, data from the Ministry of Finance showed on Wednesday, rebounding from a 1.7% drop in September and outpacing a median forecast in a Reuters poll of a 2.2% increase. Exports to China led the recovery with a 1.5% gain due to strong demand for chipmaking equipment, while those to the United States, Japan’s largest export destination, were down 6.2% on weak auto shipments, the data showed. Kazuma Kishikawa, economist at Daiwa Institute of Research, warned that global demand remains weak. “In particular, U.S.-bound shipments are likely to take months to recover as it would take time for interest rate cuts to start to lift the economy,” he said.

Imports in October grew 0.4% from a year earlier, compared with market forecasts for a 0.3% decrease. That resulted in a trade deficit of 461.2 billion yen ($2.98 billion) in October, compared with the forecast of a deficit of 360.4 billion yen. Shunsuke Kobayashi, chief economist at Mizuho Securities, estimated that a proposed 10% tariff on all U.S. imports could push down Japan’s gross domestic product by 0.13%, and another 0.12% if a potential 60% levy on Chinese-made products triggers retaliatory tariffs from China. (Reuters)

Photo: A cargo ship and containers are seen at an industrial port in Tokyo, Japan. (Reuters)