Trading Partner Portal: Japan

A horizontal banner shows United States, Japanese and California flags side by side.

Trade Overview

Japan is a nation built up by an island arc in the Asia-Pacific, with its four main islands being Hokkaido, Honshu, Shikoku, and Kyushu. It has both large and small islands that make up its land mass, with the largest being Honshu.

Geographically, it has many coasts and much of its landscape is mountainous terrain, with it having some active and dormant volcanoes. Japan is considered one of the more economically and technologically advanced countries in the world, and holds a heavy emphasis on education, thus making it one of the more literate countries in the world as well. It is well known for its strong traditions and the intersectionality of the old and new in its modern-day culture, as well as is its competitive business culture.

Japan saw a nominal GDP of $4.44 trillion in 2025, with its population around 123.37 million people, thus making it one of the largest economies in the world. Japan has a highly developed market economy and has many sectors that it specializes in, some of which include automotive, shipbuilding, electronic equipment, metals, and technology. Technology is one of its largest sectors, with many subsets, and one of the perks of doing business in Japan. It has multiple free trade agreements across the world, with many different trading partners that include the U.S., EU, and Mexico. However, the U.S and Japan’s deep economic roots and alliances is one of the most prominent.

U.S. – Japan Trade

In 2025, two-way goods trade between Japan and the United States was $228.02 billion. Total goods exports were $82.06 billion making Japan the 7th largest U.S goods export market. The top 5 exports to Japan are chemicals ($14.62 billion), oil and gas ($10.88 billion), transportation equipment ($9.24 billion), computer & electronic products ($8.96 billion), and agricultural products ($6.30 billion).

Imports from Japan to the U.S. totaled $119.51 billion making Japan the 7th largest import market for the U.S. Top imports from Japan were transportation equipment ($52.67 billion), non-electrical machinery ($25.18 billion), chemicals ($17.12 billion), computer and electronic products ($16.12 billion), and electrical equipment, appliances & components ($10.61 billion).

Services trade between both countries totaled $98.25 billion, with services exports totaling $53.73 billion. Top services exports were other business services, charges for use of intellectual properties, transport services, financial services, and travel.

Services imports from Japan to the U.S. totaled $44.52 billion in 2025. Top imports were transport services, charges for use of intellectual properties, travel, government goods and services, and financial services.

California Trade Facts

In 2025, Japan ranked 4th in California’s export market partners, with exports to Japan totaling $11.01 billion. This is a continuing trend, as Japan has remained 4th in California’s export market since 2010, making it a long-standing trade relationship. The top 5 exports to Japan last year were transportation equipment ($1.90 billion), computer and electronic products ($1.88 billion), processed foods ($1.36 billion), and chemicals ($1.18 billion) and non-electrical machinery ($1.07 billion).

California accounts for roughly 13% of U.S goods exports to Japan. Japan also ranked the 6th largest in California importers, with goods imports totaling $28.92 billion, making California imports 24.19% of total U.S imports from Japan. The top 5 imports from Japan were transportation equipment ($12.96 billion), computer and electronic products ($3.35 billion), non-electrical machinery ($3.05 billion), chemicals ($3.05 billion), and electrical equipment, appliances and components. ($1.34 billion).

FDI – Japan

Japan is one of the leading foreign direct investors in the U.S and California. In 2025, Japan invested roughly $827.12 billion in the U.S. Japan provided up to 1,052,300 jobs, invested $13.9 billion in innovative research and development, and contributed $88.4 billion to expanding U.S. exports. Primary industries for Japanese FDI in the U.S. included industrial equipment, auto components, real estates, software and IT services, chemicals, electronic components. U.S. FDI into Japan totaled at $74.3 billion in 2025. Select USA

In 2025, Japan was the top investor in California, with Japanese FOE’s in California providing 130,008 jobs through 3,501 firms, which led to an estimated $15.60 billion in wages. The top sectors for these jobs are manufacturing, wholesale trade, professional/business services, retail trade, and financial activities (World Trade Center Los Angeles).

Other sources:
(laedc.org)
Japan Fact Sheet, U.S. Department of Commerce
(BEA.gov)

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Japan News Updates and Resources

President Celebrates ‘Unbreakable Alliance’ During Japanese
Prime Minister’s Visit
The Well News, April 10, 2024

Japan a Steadfast Ally of California, U.S. Over the Years
CalChamber, July 11, 2022

CalChamber Statement on Tragic Death of
Former Prime Minister Shinzo Abe
CalChamber, July 8, 2022

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Interview Series Featuring California’s Key Trading Partners – Featuring Toru Maeda, Consul General of Japan in San Francisco:
Longtime Commercial Relations Promote Opportunities
to Form Reliable Partnerships
CalChamber, September 18, 2020

JBIC Signs MOU with the US State of California: Supporting Business Expansion of Japanese Companies in California, Advanced State of Global Environmental Protection
Japan Bank for International Cooperation, March 5, 2021

California and Japan Bank for International Cooperation Ratify Agreement to Expand Relations in Sustainability and Economic Development
Office of Lt. Governor Eleni Kounalakis, March 4, 2021

Blue Dot Network: The Belt and Road Alternative
The Diplomat, April 7, 2020

Japanese Manners Videos Show How to Be a “Really Cool” Traveller in Japan
SoraNews24, January 27, 2020

Japan House Los Angeles Celebrates August Grand Opening of New Cultural Destination
Japan House, July 24, 2018