Japan navigated another year of overall trade deficits, but a ballooning surplus with the United States has emerged as a critical point of focus, particularly as Japanese negotiators engage in tense discussions with the Trump administration over potential and existing tariffs.

Finance Ministry data released Thursday paints a complex picture of Japan’s trade dynamics against a backdrop of global economic friction.

Provisional statistics revealed that for the fiscal year ending in March, Japan recorded a global trade deficit totaling 5.2 trillion yen (approximately $37 billion).

This marked the fourth consecutive year the nation imported more goods and services than it exported overall.

Driving factors included a 4.7% rise in annual imports, exacerbated by a weaker Japanese yen which inflated the cost of bringing goods into the country.

However, overall exports also climbed 5.9%, boosted by robust shipments of vehicles and computer chips, as well as a notable influx of foreign tourists whose spending counts towards exports.

Contrastingly, Japan’s trade relationship with the United States yielded significantly different results.

The trade surplus with the US surged to 9 trillion yen (around $63 billion) during the same fiscal year.

This growing imbalance stands as a particularly sensitive issue for US President Donald Trump, who has frequently targeted such surpluses in his trade rhetoric.

Navigating the tariff gauntlet

The release of these figures coincides with ongoing negotiations in Washington, where Japanese officials are working to counter US tariff threats.

Japan, a long-standing key ally and major investor in the United States employing hundreds of thousands of Americans, finds itself navigating a challenging trade environment.

President Trump initially announced plans on April 2 to impose broad tariffs, including a potential 24% levy on imports from Japan.

While market reactions prompted a partial 90-day suspension of these new tariffs for many nations (excluding China, which faced increases up to 145%), Japan still confronts significant trade barriers.

It currently faces a 10% baseline tariff on various goods, alongside recently imposed 25% taxes on crucial exports like cars, auto parts, steel, and aluminum.

These duties present a considerable challenge for the administration of Prime Minister Shigeru Ishiba.

Monthly trends and shifting flows

Looking at more recent data, Japan registered a trade surplus of 544 billion yen (about $4 billion) for the month of March alone.

March exports saw a nearly 4% year-on-year increase, marking the sixth consecutive month of growth, although the pace slightly moderated compared to February.

Exports to the US grew by 3% in March, while shipments to the broader Asian region increased by 5.5%.

Notably, while direct exports to China decreased, shipments surged to other Asian economies like Hong Kong, Taiwan, and South Korea.

This pattern led some analysts to speculate about strategic shifts in trade routes.

“This is likely due to the rerouting of exports within Asia to avoid tariff conflicts with the US,” commented Min Joo Kang, a senior economist at ING, in a report.

Concessions on the horizon?

The high stakes of the ongoing negotiations have fueled speculation among some analysts that Tokyo might eventually offer concessions to appease Washington, potentially involving increased imports of American agricultural products like rice.

Rice is a culturally significant and traditionally protected staple in Japan, but recent domestic shortages have driven up prices, perhaps creating an opening for such a move.

As negotiations continue, the juxtaposition of Japan’s overall trade deficit with its substantial and growing surplus with the United States underscores the complex pressures shaping global commerce and bilateral relations under the current tariff regime.

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Oil prices rose on Thursday due to tighter supply expectations after Washington imposed additional sanctions on Iranian oil trade. 

Additionally, some Organization of the Petroleum Exporting Countries producers also pledged more output cuts to offset overproduction through June 2026. 

At the time of writing, the price of West Texas Intermediate crude oil on the New York Mercantile Exchange was at $63.68 per barrel, up 1.4%.

Brent crude oil on the Intercontinental Exchange was at $66.61 a barrel, up 1.2% from the previous close. 

Wednesday saw both benchmarks close 2% higher, reaching their highest levels since April 3. 

This puts them on track for their first weekly increase in three weeks. 

As Thursday marks the final settlement day of the week due to the upcoming Good Friday and Easter holidays, investors are keeping a close watch.

Sanctions on Iran

The Trump administration revealed new sanctions on Wednesday targeting Iran’s oil exports, with measures against a China-based “teapot” refinery also included.

“The move aims to ramp up pressure on Tehran amid heightened tensions over its nuclear program,” FXstreet said in a report. 

The US Treasury Department issued a statement that US President Donald Trump’s sanctions aim to reduce Iran’s oil exports to zero. 

The sanctions are meant to deter Chinese imports of Iranian oil as part of Trump’s “maximum pressure” campaign.

China has been the largest importer of Iranian oil over the last couple of years. 

Imports

Moreover, data from the customs authority showed that China’s overall crude oil imports increased to 12.1 million barrels per day in March. 

This figure was approximately 1.7 million barrels per day higher than imports in January and February, and it was almost 5% higher than imports in the previous year.

Carsten Fritsch, commodity analyst at Commerzbank AG, said:

A sharp rise in oil imports from Iran is being held responsible for this, even though China does not publish any official data in this regard.

Vortexa, the shiptracking agency, reports that seaborne oil imports have seen a significant rise, primarily fueled by record-high shipments from Iran to Shandong province.

Independent Chinese refineries are suspected of having imported oil from Iran in the run-up to the stricter US sanctions. 

Trump’s sanctions against Iran come at a time when trade tensions between the US and China are boiling.

Experts believe that Trump’s sanctions have been placed to pile on more misery for China’s economy. 

Less availability of cheaper Iranian barrels in the market would increase competitiveness of oil coming from the Middle East and Russia in the coming weeks. China is the world’s largest importer of crude oil. 

OPEC compensation plans

Adding to concerns about supply, Wednesday’s output cut compensation plan by OPEC+ further supported oil prices. 

OPEC announced on Wednesday that it has received revised plans from member countries Iraq and Kazakhstan, as well as other nations within the alliance, detailing their strategies to implement additional oil output cuts.

The updated OPEC compensation plan increases monthly production cuts, now ranging from 196,000 barrels per day to 520,000 barrels a day, effective from this month until June 2026, the cartel said in an official release.  

The previous plan had lower cuts, ranging from 189,000 barrels per day to 435,000 barrels a day.

The planned output cuts mean that the cartel’s decision to raise production by 411,000 barrels per day in May would be largely nullified. 

Eight members of the OPEC+ alliance, in a surprising move earlier this month, agreed to raise crude oil production by 411,000 barrels a day in May. This weighed on sentiments, and oil prices slipped as a result. 

The cartel is scheduled to start unwinding its voluntary production cuts of 2.2 million barrels per day from April by increasing output by 135,000 barrels a day. 

The market was expecting a similar rise in May as well.

Gains may not hold

The rise in oil prices this week may not hold as global demand is likely to be negatively affected due to the ongoing trade tensions. 

The International Energy Agency this week lowered its forecasts for growth in global oil demand sharply for 2025, citing concerns about US tariffs. 

OPEC in its monthly report also cut 2025 demand forecasts for the first time since December. Though, it was only a slight downward revision compared to IEA. 

“If we see a long-lasting trade war through 2025, Rystad Energy projects a 15% reduction in 2025 global GDP growth – from 2.8% to 2.4% – which would lower our oil demand growth forecast from 1.1 million barrels per day (bpd) to 600,000 bpd – an almost 50% decrease,” said Janiv Shah, vice president, commodity markets analysis, oil, at Rystad Energy. 

However, we expect supply corrections and disruptions, along with rising energy demand in the northern hemisphere summer, to keep Brent prices around $70 per barrel.

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Millions of jobs. Billions in output. A key driver of the US labour market for over two decades will be shaken up. 

The Biden-era approach to immigration left room for labour force participation and tax contribution from undocumented immigrants. The Trump administration is moving in the opposite direction, that is mass deportations.

Backed by as much as $175 billion in new funding, the administration is building what officials describe as a tech-powered, private-sector-driven “deportation machine.”

The scale of disruption is measurable, and far more significant than most political rhetoric suggests.

How much labor does the US actually stand to lose?

According to a report by Baker Institute, the US is home to an estimated 11 million undocumented immigrants. Around 8 million of them are working. They make up 3.3% of the population and nearly one-fifth of the foreign-born labour force. 

Those numbers may seem modest at the national level, but their concentration in key industries is what makes them economically significant.

Agriculture is the most exposed. Over 41% of all farm workers are undocumented. In the broader food supply chain, roughly 1.7 million workers fall into this group. On an absolute basis, the construction sector is the largest employer of undocumented workers, making up 14%, according to a recent report by Oxford Economics.

In states like California and Texas, immigrants make up 40% of the construction workforce. Across the country, 14.2% of construction workers are undocumented.

Manufacturing employs another 870,000 undocumented immigrants. Hospitality holds around 1 million. Transportation and warehousing add 461,000 more. These numbers are not easily replaced.

The US is already facing labour shortages. In 2023, there were 3.2 million job openings the market could not fill. 

As fertility rates drop and the population ages, immigration has been the main force sustaining labour supply. Deporting a sizable chunk of the undocumented workforce would reverse that trend.

Can businesses adjust, or would prices spike?

Not every industry can simply raise wages and move on. Some operate on thin margins. Some face global competition. 

In agriculture, for instance, wages make up a large share of costs, and productivity gains are slow. Prices at the supermarket would go up, and output may shrink as producers scale back.

Construction faces a different but equally serious challenge. Replacing workers takes time. Laborers may be less skilled than subcontractors, but they are essential. 

Wage growth in construction already outpaces the broader economy. Hourly earnings rose 4.4% in Q4 2024, a full percentage point above pre-COVID averages. 

The National Association of Home Builders estimates that labour makes up nearly 25% of the cost of a new home. With fewer workers, costs rise, projects get delayed, and housing becomes less affordable.

Oxford Economics estimates that deporting half of the undocumented construction workforce would cut sector growth in half through 2028. 

That means over $55 billion in lost output. Efforts to replace labour with automation won’t work fast enough. Construction has seen some of the lowest productivity growth in the economy for decades.

What about the bigger picture: GDP, inflation, and taxes?

Studies project that mass deportations could reduce GDP by 2.6% to 6.2% over the next decade. That is a staggering figure in an economy of over $27 trillion.

The pressure would also show up in prices. A 9.1% increase in the general price level by 2028 is one projection tied directly to widespread deportation efforts.

Tax revenues would likely fall. Undocumented immigrants contribute approximately $60 billion annually in local, state, and federal taxes. 

Over their lifetime, they contribute $237,000 more in taxes than they receive in benefits. Removing this group shrinks the tax base and pushes up deficits.

Even for US-born workers, there’s little to gain. Past deportation waves did not lead to higher wages. In fact, removing 500,000 immigrants from the labor force could cost native-born workers 44,000 jobs. Fewer workers means less demand across the economy.

Can the deportation machine actually scale?

ICE deported about 271,000 people in FY 2024. In March 2025, monthly deportations dropped to 18,500. That’s well below the target of 1 million per year. So the bottleneck is not policy; it’s capacity.

ICE employs roughly 5,500 field agents. Its planes can carry only about 135 deportees per flight. Its daily detention limit is around 49,000 people. 

But Trump’s team is pushing hard to change that. Contracts worth $45 billion have been floated to build new detention centers. 

Tent facilities from the Biden era are being repurposed into jails. Funding is being requested to hold over 100,000 people at once.

The private sector is being brought in at scale. According to federal contracts, Palantir received a $30 million contract upgrade to supply ICE with AI-powered targeting and enforcement tools.

Officials are looking to manage deportations with logistics platforms, drawing comparisons to Amazon Prime. 

Apparently, “deportation-as-a-service is not just a slogan. It is an operational model in the works.

What does this mean for Mexico and the border?

Mexico stands to feel the economic aftershock. In 2024, it received $65 billion in remittances, representing 3.3% of its GDP. 

Many of these transfers come from undocumented workers in the US. Deportations would cut off that stream.

The Mexican government has responded with programs to support returning migrants, but resources are limited. Cuts to consulate budgets and immigration offices raise doubts about implementation.

Trump’s tariff threat further complicates matters. A 25% tax on all Mexican imports could slow trade and push Mexico toward a recession. That, in turn, could drive more people to attempt migration north.

The irony is hard to miss. An economic crackdown on immigration may well fuel the very patterns it aims to stop.

Where does this leave the US economy?

If the goal of mass deportation is to restore jobs and wages for US citizens, the evidence doesn’t support it. 

Most undocumented immigrants work in jobs Americans have long avoided. Their removal wouldn’t fill gaps but it would rather widen them.

Labour-intensive industries would shrink. Prices would climb. Housing projects would stall. Tax revenues would fall. The logistics of deporting millions are expensive, slow, and disruptive.

A more economically sound approach would be to fix the visa system, expand legal pathways, and recognize the long-term contribution of workers already here. 

For now, the US is heading toward a test of whether it can forcibly reshape its economy without breaking it.

The test is whether the economic engine can keep running with fewer hands on deck. That’s what the current administration is betting on.

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Shares of Wipro Ltd dropped as much as 6.3% on Thursday after the IT services firm issued a disappointing revenue forecast for the June quarter, raising concerns of a third consecutive year of decline amid persistent global tech spending cuts.

India’s fourth-largest IT exporter said on Wednesday it expects revenue in the April-June period to fall between 1.5% and 3.5% sequentially, with new Chief Executive Srini Pallia warning that “uncertainties have dramatically increased” going into the new fiscal year.

The guidance, analysts said, marks a worrisome start for fiscal 2026 and signals continued headwinds despite a leadership change.

Pallia, who took over in April 2024 following the abrupt exit of Thierry Delaporte, inherits a company grappling with a string of weak quarters, stalled large deals, talent attrition, and market share erosion.

Wipro shares were down 5% as of 11:51 am IST on Thursday, extending their year-to-date decline to 22.4%.

While that is marginally better than the broader Nifty IT index’s 24.8% fall, it underscores growing investor scepticism about the firm’s prospects.

Analysts warn of a third year of revenue contraction

Brokerages were quick to flag that Wipro’s first-quarter guidance could derail any early hopes of a recovery.

“The first quarter guidance sets the stage for another challenging year following two years of revenue decline,” analysts at Phillip Capital said in a note.

Several firms—including Nomura, Nuvama, Emkay, and ICICI Securities—trimmed their FY26 and FY27 earnings estimates, citing elevated macroeconomic uncertainty, slowing transformation project spends, and the lingering impact of geopolitical tensions and tariffs, particularly in key markets like the United States.

Nomura cut its FY26 earnings per share (EPS) estimates by 2–4% and revised the target price to ₹280 from ₹300.

It maintained a Buy rating, citing improved shareholder return policies, but warned that its earnings projections remain 8–9% below Bloomberg consensus.

Nuvama downgraded the stock to Hold and reduced its price target to ₹260, stating that Wipro’s weak first-quarter guidance jeopardizes the turnaround thesis.

The brokerage lowered its FY26/27 EPS estimates by up to 3.7%.

Muted forecast triggers widespread downgrades

At least nine out of the 39 analysts covering the stock have downgraded their ratings, while 20 have cut their price targets, according to LSEG data.

The average analyst rating remains at “Hold”, but the median target price has declined by nearly 14% to ₹250 over the past month.

Emkay Global said the company’s Q1 outlook factors in both potential demand recovery and further weakness.

It maintained a “Reduce” rating with a ₹260 target, highlighting low near-term visibility despite a strong deal pipeline.

ICICI Securities termed the March quarter’s performance “abysmal,” citing weak revenues and macro concerns—especially in discretionary-heavy sectors like auto and manufacturing.

The firm said the lone bright spot was the total contract value (TCV) from two large deal wins, but added that Wipro’s key challenge lies in translating orders into revenues and stabilising its European operations.

Brokerages remain cautious as growth triggers remain elusive

Motilal Oswal Financial Services (MOFSL) cut its FY26/FY27 EPS estimates by around 4%, anticipating a 1.9% YoY revenue decline in constant currency terms.

The brokerage retained its Sell rating with a target price of ₹215, implying a valuation of 17 times FY27 earnings.

Though some brokerages note positives such as improved capital allocation policies and a projected FY27 dividend yield of 4%, consensus suggests that the near-term outlook remains grim with little to spark a re-rating in the stock.

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Vietnam, a country heavily dependent on coal for its energy needs, has ambitious plans to significantly increase its power generation capacity by 2030.

The country’s newly revised national power plan outlines a strategy that prioritises a shift towards renewable energy sources and the introduction of nuclear power, according to a Reuters report. 

This move signifies a significant change in Vietnam’s energy policy, as it seeks to reduce its reliance on fossil fuels and diversify its energy mix.

The expansion of renewable energy sources, such as solar and wind power, is expected to play a crucial role in achieving the country’s power generation goals. 

Additionally, the inclusion of nuclear power in the energy mix marks a major step for Vietnam, as it explores alternative sources of energy to meet its growing demand.

Total investments

This ambitious plan reflects Vietnam’s commitment to sustainable development and its efforts to address the challenges of climate change. 

By transitioning towards cleaner energy sources, the country aims to reduce its carbon emissions and promote a greener future.

The Vietnamese government stated that reaching the targets will necessitate a total investment of $136.3 billion by 2030. This equates to over a quarter of the country’s 2024 gross domestic product.

To avoid power shortages that have alarmed foreign investors and to reduce its reliance on coal, the Southeast Asian industrial hub must rapidly expand its power supply to keep up with rising electricity demand.

Vietnam’s government announced a plan late on Wednesday to increase its total installed capacity to between 183 and 236 gigawatts by 2030. 

This is a significant increase from the more than 80 gigawatts at the end of 2023.

Focus on nuclear

In order to do so, the country is resuming its investment in nuclear power, despite having suspended the program in 2016 due to budgetary restrictions and the Fukushima nuclear disaster in Japan.

The government announced that the initial nuclear power plants, with a combined capacity of up to 6.4 GW, are expected to be operational between 2030 and 2035. 

They also stated that an additional 8 GW capacity would be added by mid-century.

The International Atomic Energy Agency had said that small modular reactors are still under development, but they would be more affordable to build than large power reactors. 

Officials have said Vietnam has discussed these small modular reactors.

Earlier this year, the government announced its intention to engage in discussions with foreign partners, including Russia, Japan, South Korea, France, and the United States, regarding nuclear power projects. 

Following this announcement, Korea Electric Power Corp expressed interest in Vietnam’s nuclear projects on Tuesday, as the company’s chief visited the country.

Power shares

The government announced that the new plan will increase solar power’s share of total capacity to between 25.3% and 31.1% by 2030. 

This is an increase from 23.8% in 2020. Additionally, onshore and nearshore wind energy will rise to between 14.2% and 16.1% by 2030, compared to almost none at the beginning of the decade.

Authorities have established new targets following concerns among investors stemming from a retroactive adjustment to preferential pricing for solar and onshore wind energy producers.

The plan outlines a significant shift in energy sources, with coal-fired power plants’ share of total generation capacity decreasing from approximately one-third in 2020 to between 13.1% and 16.9%. 

Meanwhile, liquefied natural gas plants, currently non-existent in the mix, are projected to contribute between 9.5% and 12.3% of the total generation capacity.

The Vietnam government’s target for offshore wind energy is 6-17 GW between 2030 and 2035. While an earlier goal of 6 GW for this decade was set, no offshore wind energy has been built yet.

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