Release of the White Paper on International Economy and Trade 2025 and the International Trade and Economic Strategy 2025

1. Highlights of the White Paper

The White Paper on International Economy and Trade 2025 mainly presents the following analysis findings:

1. The U.S. tariff shock and the resulting rise of uncertainty have led to a deteriorating outlook for the world economy. Behind this lies the expansion of the twin deficits of the U.S. current account balance and its fiscal balance, and at the root of the matter are structural problems such as expanding domestic disparity, a rise in support for protectionism in the U.S., and underconsumption in China.
2. China has developed its industrial base over the past 30 years and has created more and more export items, and as a result, problems such as the adverse impact of the economies of scale and deflationary exports are emerging. Also, dependence on China has been increasing among Asian neighbors, including ASEAN, the Republic of Korea, and India. 
3. It is necessary to foster new industrial policies to respond to issues such as digital transformation (DX), green transformation (GX) and the enhancement of supply chain resilience while promoting industrial development. International measures must also be taken in response to the negative externalities caused by some industrial policies, such as market-distorting measures and the weaponization of interdependence.  
4. In response to a decrease in the export volume of goods from Japan, it is necessary to develop new export items, exporters, and markets for the exported goods, while increasing digital and other service value added. Also, it is important to support co-creation with Global South countries and the overseas expansion of the content industry. 

2. Highlights of the International Trade and Economic Strategy 2025

Based on the analysis made in the White Paper on International Economy and Trade 2025, the following targets and direction of the trade strategy that should be pursued by Japan are indicated: 

[Targets] In light of changes in the international environment, it is necessary to respond to the fluctuations in the international economic order and to ensure autonomy and indispensability amid rising protectionism. In addition, Japan needs to take actions to explore overseas markets through export and investment to maximize Japan's value added, addressing the intensifying competition surrounding Global South countries and the advancements in DX (Digital Transformation) and GX (Green Transformation).
Regarding foreign investment, it is important to avoid the outflow of high value-added functions that Japan should retain domestically, while incorporating overseas innovations and promoting the diversification of supply chains to prevent overdependence on specific countries or regions from the perspective of ensuring autonomy. 

[Direction] To navigate the challenging international environment, the current direction of Japan’s international trade and economic policy can be summarized in the following three points:

1. To respond to fluctuations in the international economic order, Japan will maintain its stance as a reliable partner in the international community while engaging in multi-layered economic diplomacy through building win-win relationships with various countries and working to strengthen the international economic order.
2. Regardless of the status of the international order, with the aim of maximizing value-added through addressing global challenges such as DX and GX, and incorporating overseas vitality, Japan should focus on securing and diversifying export markets based on the enhancement of domestic investment, as well as supporting the high value-added activities of Japanese companies through co-creation with the Global South and like-minded countries via foreign investment. 
3. Even amid rising protectionism and the emergence of threats from overcapacity and overdependence, it is essential to enhance supply chain resilience, strengthen autonomy (e.g., ensuring a stable resource supply), and secure indispensability regarding technologies and businesses. To ensure economic security, Japan will promote integrated efforts both domestically and internationally including policy coordination with like-minded countries, domestic institutional development, and overseas business expansion.

3. White Paper on International Economy and Trade 2025 Table of Contents 
 

Part I Escalating Uncertainty at a Critical Juncture of the International Economic Order
　Chapter 1　A Vulnerable World Economy and the Tariff Shock
　Chapter 2　Heightening Uncertainty
　Chapter 3　Economic Impacts of Uncertainty
　Chapter 4　Impact of Geopolitical Distance on World Trade
　Chapter 5　Economic Trends by Country and Region 
Part Ⅱ　Inclusiveness, Economies of Scale and Asymmetric Dependence, and Service Value Added
　Chapter 1 Structural Changes Facing the International Economic Order
　Chapter 2 The Impact of China’s Industrial Development on Trade and Investment
　Chapter 3　The Transformation of Japan’s Trade and Investment Structure
Part III Strategy and Policies
　Chapter 1 The Direction of the International Trade and Economic Strategy 
　Chapter 2 Japan’s Efforts and Initiatives in Fiscal 2024

Related Materials

• Executive Summary of the White Paper on International Economy and Trade 2025(PDF:164KB)
• Overview PowerPoint of the White Paper on International Economy and Trade 2025(PDF:1,609KB)
• International Trade and Economic Strategy 2025 (in Japanese)(PDF:10,184KB)

Related Links (in Japanese)

• White Paper on International Economy and Trade 2025
• International Trade and Economic Strategy 2025

Division in Charge

White Paper on International Economy and Trade 2025:

Policy Planning and Research Office, Trade Policy Bureau
 

International Trade and Economic Strategy 2025:

Strategic Policy Planning Division, Trade Policy Bureau