The US-China trade war has intensified and it’s not just hurting both countries. Japan recently reported that its economy experienced a decline between April and June citing the trade war as the primary cause for the economic downturn. In the first three months of 2019, the Japanese economy grew by 2.8%. However, between April and June, it only grew by 1.8%, according to a statement by the Cabinet Office.
Japan Suffers Economic Decline Thanks To China’s Trade War With The United States
While the economic growth for the second quarter is lower than what was experienced in the first quarter, it is still relatively higher than what was predicted by Business Daily which was about 0.4%. Analysts said that there was a boost to the Japanese economy during the 10-day holiday as the country marked the imperial succession in May. This is because there was a boost in consumption within that period. However, the trade war still impacted economic growth.
During the imperial succession, private consumption increased by 0.5% from the last quarter which was 0.1% higher than the 2018 last quarter. In the first quarter, corporate investment increased by 0.4% compared to the last quarter of 2018. However, it increased by 1.5% in the second quarter.
While other aspects of the economy are doing well, exports fell by 0.1% in the second quarter compared to the 2% rise in the first quarter. On the plus side, imports increased by 1.6% in the second quarter. This was encouraging considering that they dropped by 4.3% between January and March.
If the trade war continues, the effect will be on the global economy. China has recently proven that it is ready to do whatever it takes to cut a better deal even if it will also suffer economic decline. Trump, on the other hand, is not ready to bulge.