Japan Faces Tariff Trouble

🚗 Japan’s export machine stalls as U.S. tariffs hammer auto shipments—Tokyo calls it a “national crisis.”

May 23, 2025

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In this issue of the peel:

  • đźš— Japan’s export machine stalls as U.S. tariffs hammer auto shipments—Tokyo calls it a “national crisis.”

  • 🍌Walmart tightens its belt, laying off 1,500 while raising banana prices.

  • ❄️ Snowflake surges 13.5% after crushing the $1B revenue mark.

Market Snapshot

Banana Bits

Gold hitting record highs

The price of gold keeps heating up. If the record-breaking year of 2024 wasn't enough, gold hit a major historic 2025 milestone by crossing the $3,000/ounce threshold!

Here are 3 Key Reasons:

  1. Looming economic & political uncertainty

  2. Increasing central bank demand

  3. Rising National Debt - over $36 Trillion

So, could gold surge even higher?

According to a recent statement from Jeffrey Gundlach, famed American business man and investor… “Gold continues its bull market that we’ve been talking about for a couple of years, ever since it was down to $1,800.” He expects gold to reach $4,000/oz.

Is it time you learn more about precious metals?

Get all the answers in your free 2025 Gold & Silver Kit. Plus, if you request your free kit today, you could qualify for up to 10% Instant Match in Bonus Silver*.

*Offer valid on qualified orders of Goldco premium products only. Receive up to 10% in free silver based on purchase amount; cannot be combined with other offers. Additional terms apply—see your customer agreement or contact your representative for details.

Macro Monkey Says

Japan’s Export Engine Sputters as Tariffs Bite

Japan’s export machine, long a symbol of the nation's economic prowess, is showing signs of strain. In April, exports to the U.S. declined by 1.8% year-over-year, marking the first drop in four months. 

This downturn is attributed to a combination of factors, including a 25% tariff on automobiles and a 24% levy on Japanese goods imposed by the Trump administration. These tariffs have particularly impacted Japan's automotive sector, a cornerstone of its export economy. 

The broader implications are concerning. Japan's overall export growth slowed to 2% in April from 4% in March, leading to a trade deficit of 115.8 billion yen ($804 million)—the first in three months. Imports from the U.S. fell by over 11%, and total imports decreased by 2.2%. A strengthening yen, now at 144 per dollar compared to 155 a year ago, has also reduced export value in yen terms. 

The Japanese government has downgraded its outlook for the global economy due to rising uncertainties related to U.S. trade policies and the adverse impact of tariffs. 

For the first time in nearly three years, it revised its assessment of the U.S. economy, now describing its expansion as "moderating." The report highlighted that global growth is stalling in several regions, contrasting with its previous statement in April that global economic activity was picking up. 

In response to these challenges, Japanese auto parts suppliers, such as Kyowa Industrial, are diversifying into medical devices to offset declining demand for combustion engine parts. However, even these exports are affected by tariffs. 

Prime Minister Shigeru Ishiba has termed the tariffs a "national crisis," and top negotiators are engaged in ongoing discussions with Washington. Industry experts warn these tariffs could accelerate consolidation and force strategic pivots amidst growing EV competition from Tesla and BYD.

The Takeaway?

Japan's export decline to the U.S. in April underscores the tangible impact of trade tensions and tariffs on global economies. The automotive sector, a significant contributor to Japan's exports, is particularly affected. 

With the Japanese government downgrading its global economic outlook and companies like Kyowa Industrial seeking diversification, the situation highlights the broader implications of protectionist trade policies. As negotiations continue, the resolution of these trade disputes will be crucial for stabilizing Japan's export-driven economy.

Career Corner

Question

I'm currently in London, and an analyst I reached out to asked me if I could send him an email so we can find a time to connect. The problem is that I don't know if he thinks of an in-person or over-the-phone meeting. How would you recommend structuring my email?

Answer

You can keep it simple and flexible. Here’s a suggested line to include in your email:

"I'd love to connect either over the phone or in person—whichever is most convenient for you. Let me know what works best!"

Head Mentor, WSO Academy

What's Ripe

IONQ (IONQ) 36.6%

  • IonQ surged 36.5% on Thursday, closing at $45.79, marking a significant turnaround for the quantum computing firm. This rally was fueled by renewed investor enthusiasm for quantum technologies, as IonQ turned positive for the year. 

  • The sector's momentum was further bolstered by discussions around the reauthorization of the National Quantum Initiative Act, which could provide essential funding for quantum research. IonQ's performance reflects growing confidence in the commercial viability of quantum computing solutions.

Snowflake (SNOW) 13.4% 

  • Snowflake's shares climbed 13.4% to $203.18 after the company reported its first-ever $1 billion revenue quarter, surpassing both revenue and earnings expectations. 

  • The data cloud company's optimistic guidance for the current quarter and full fiscal year exceeded Wall Street forecasts, prompting analysts to raise their price targets. 

  • Truist Securities and Cantor Fitzgerald increased their targets to $235 and $242, respectively, maintaining favorable ratings.

What's Rotten

Hims & Hers Health (HIMS) 7.7%

  • Hims & Hers Health experienced a 7.7% decline, closing at $53.52, amid broader market volatility. The telehealth company's drop coincided with a general downturn in healthcare stocks, as new auditing measures were announced by the Centers for Medicare & Medicaid Services targeting Medicare Advantage plans. 

  • This regulatory scrutiny has raised concerns about potential impacts on healthcare providers' revenues.

NextEra Energy (NEE) 6.4%

  • NextEra Energy's stock fell 6.4% to $66.94, marking its second consecutive day of losses. The decline brought the stock 22.3% below its 52-week high of $86.10. 

  • NextEra significantly underperformed compared to its industry peers, with trading volume notably high at 40 million shares, well above its 50-day average of 12.9 million. 

  • The drop reflects investor concerns over the company's exposure to potential policy changes affecting renewable energy incentives.

Thought Banana

Walmart Trims Execs, Not Prices

Walmart, the retail behemoth serving nearly 90% of American households, is undergoing significant organizational changes. The company announced layoffs of approximately 1,500 corporate employees as part of a restructuring effort to enhance efficiency and reduce costs. 

This move also includes relocating many remote workers to its headquarters in Bentonville, Arkansas, signaling a shift from the remote work policies adopted during the pandemic. 

Concurrently, Walmart is grappling with the financial impact of ongoing tariffs. The company has indicated plans to raise prices on various products to offset these increased costs. Notably, the price of bananas, a staple item for many consumers, has risen by approximately 8%, now costing 54 cents per pound, up from 50 cents. 

Chief Financial Officer John David Rainey described the magnitude and speed of these cost increases as "unprecedented," highlighting the challenges faced by retailers in the current economic climate.

Despite these headwinds, Walmart reported stronger-than-expected sales for the quarter ending April 30, driven by value-seeking consumers. However, the company refrained from issuing a profit forecast due to uncertainties around absorbing tariff costs. 

The decision to increase prices is a significant development, as it may signal a broader wave of price hikes across various industries. Economists anticipate that consumer-price inflation could rise from 2.3% to approximately 3.3% over the next year if tariffs persist.

Walmart's strategic adjustments, both in workforce management and pricing, underscore the broader economic ramifications of ongoing trade policies. As the company navigates these challenges, its actions may serve as a bellwether for the retail industry at large.

The Takeaway?

Walmart just laid off around 1,500 corporate employees and told many remote workers to pack up for Arkansas—part of a major restructuring to boost efficiency. At the same time, the retail giant is hiking prices on everyday items (yes, even bananas) due to rising costs from tariffs. 

While Walmart still posted strong sales last quarter, it's warning that more price bumps may be on the way as it weathers inflation and supply chain pressures.

The Big Question: Is Walmart’s price hike strategy justifiable—or are consumers getting squeezed unfairly?

Banana Brain Teaser

Previous

In a certain sequence of 8 numbers, each number after the first is 1 more than the previous number. If the first number is -5, how many of the numbers in the sequence are positive?

Answer: 2

Today

What number is 108 more than two-thirds of itself?

Send your guesses to [email protected]

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The four most dangerous words in investing are: 'this time it’s different.

Sir John Templeton

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Happy Investing,
Chris, Vyom, Ankit, Mithun, Colin & Patrick