Aerospace & Defense Exporter Alert, Nov. 2025
October 2025
Welcome to the Aerospace & Defense Exporter Alert brought to you by the U.S. Department of Commerce’s Industry & Analysis-Aerospace Office and the U.S. Commercial Service.
Each edition highlights an important aerospace and defense market, industry policy and our signature events. We also include tools to export such as export statistics, market research, trade events and U.S. government advocacy.
Our mission is to increase U.S. exports, enhance job creation, strengthen national security, promote and protect U.S. commercial interests abroad, and deliver customized solutions to ensure that U.S. businesses compete and win in the global marketplace. Contact us to find your local International Trade Specialist.
Executive Summary
Japan offers a lucrative market for imported aircraft, aircraft parts, and engines. U.S. firms have an overwhelming presence in the market due to long-standing relationships, some spanning over 70 years, with domestic manufacturers and trading firms. U.S. firms are presented with opportunities in the market as the domestic industry undertakes international projects, develops transport and patrol aircraft for defense, as well as small jet engines for civil aviation.
Commercial Aerospace
U.S. firms continue to dominate Japan’s aerospace sector, leveraging long-standing partnerships and expanding involvement as Japanese companies deepen their role in international defense and civil aviation projects. The industry is steadily regaining momentum toward pre-COVID levels, with stability returning across the supply chain and renewed opportunities for growth. Japanese suppliers remain integral to Boeing programs, supporting monthly production of about 7 Boeing 787s with prospects to ramp higher, while sustaining 3–4 Boeing 777s as the transition to the 777X advances. Although certification of the 777X by the Federal Aviation Administration is still pending, its approval is expected to catalyze a significant rebound in wide-body output, complementing the upward trajectory of 787 production. The yen’s depreciation from ¥140 to ¥150 per USD enhances export competitiveness and strengthens global integration, positioning Japan’s aerospace suppliers for expansion. In 2023, Japan imported $10.4 billion worth of aerospace products, with 62.4% sourced from the United States, and continues to maintain duty-free importation of aircraft and parts under the WTO Agreement on Trade in Civil Aircraft.
Defense
Japan is increasing its defense budget in response to a challenging regional security landscape, underscored by North Korean missile advancements and China’s rising influence. The Cabinet approved a historic $55.9 billion budget for FY2024, marking a 16.5% increase from the prior year, to enhance capabilities across naval, land, and air dimensions, including the modification of Izumo-class carriers for F-35B operations, acquisition of new armored vehicles, and procurement of F-35A and F-35B fighter jets.
The budget focuses on advancing Japan’s defense technology research and development, with significant investments in stand-off defense, counter-hypersonic capabilities, and the Global Combat Air Program (GCAP) in collaboration with Italy and the UK.
Space
Japan’s space industry, renowned for its world-class industrial and technological prowess in R&D, is shifting its focus towards the commercialization of space technology, with concerted efforts from the Japanese government and industry to grow its space business. This pivot builds on a long-standing international collaboration in space development and exploration, initiated by a Japan-U.S. Joint Communique in 1969, and has seen Japan engaging in significant projects primarily led by NASA, with expectations for expanded collaboration in space exploration and science.
Recent developments have further strengthened space cooperation between the U.S. and Japan, including the signing of the Gateway Implementation Agreement in November 2022 as part of NASA’s Artemis missions for lunar exploration, offering a JAXA astronaut a crew position on a future Artemis mission. Additionally, Japan’s early commitment to the ISS extension until 2030, the signing of the Framework Agreement for Cooperation in Outer Space in January 2023, and subsequent dialogues and plans for a trade mission in May 2023, underscore a deepening partnership aimed at advancing space science, exploration, technology, and commercial opportunities between the two nations.
Leading Sub-Sector
Drones
Japan’s drone industry, recognized for its advanced technological base and strong innovation capacity, is increasingly shifting from research and experimental applications toward broader commercialization and integration into both public and private sector activities. This evolution reflects Japan’s growing emphasis on uncrewed aircraft systems (UAS) as critical enablers of logistics, infrastructure monitoring, disaster response, and air mobility, supported by close collaboration between government agencies and industry stakeholders. Building on Japan’s history of technological excellence and international partnerships, the country is positioning itself as a leader in the safe and sustainable deployment of drone technology.
Recent developments have highlighted the momentum of this sector. The Ministry of Defense and other agencies have identified a range of drone capabilities as priorities, including long-endurance UAVs, ship-based small UAVs, mid-range upgraded UAVs, close-range UAVs, and mini UAVs capable of air patrol. While U.S. drone exports to Japan totaled $10 million in 2022, subsequent years have seen a moderate decline, underscoring the importance of renewed engagement and collaboration. At the same time, Japanese policy shifts in 2023 allowing greater technology exchange with international partners have created new pathways for bilateral cooperation. These trends, combined with the limited scale of Japan’s domestic drone production capacity, highlight opportunities for U.S. companies to expand their role in supplying advanced systems, life-cycle support, and sustainability-focused upgrades. Together, these developments point to a future of deepening collaboration in drones and uncrewed systems that advances innovation, enhances operational capability, and contributes to shared prosperity between the United States and Japan.
Upcoming Events
Japan Drone & Counter-UAS Business Development Mission
Dates: Spring 2026
Venue: Tokyo, Japan
Description: A high-impact trade mission designed to showcase U.S. technology leadership in drones and counter-UAS solutions, meet Japan’s urgent market demand, and strengthen U.S.–Japan defense and industrial cooperation. The agenda will feature U.S. and Japanese government briefings, roundtables with industry leaders, pre-arranged B2B matchmaking meetings, site visits, and networking receptions. Participation is capped at 20 organizations, with 10–12 U.S. firms selected for one-on-one business meetings. More details available soon!
Contact Information
Sayoko Koto, Senior Commercial Specialist
U.S. Embassy – Tokyo
Email: Sayoko.Koto@trade.gov
The United States has negotiated trade and investment agreements with key aerospace and defense trading partners, including Japan, the United Kingdom, and the European Union, securing zero-for-zero tariff treatment for aircraft and parts.
- Japan: In July 2025, the Japanese government committed to purchasing U.S.-made commercial aircraft, including an agreement to buy 100 Boeing aircraft. Japan also committed additional billions of dollars annually for purchases of U.S. defense equipment, enhancing interoperability and alliance security in the Indo-Pacific.
- United Kingdom: Through the U.S.-UK agreement announced in May 2025 and reaffirmed during President Trump’s state visit to the United Kingdom in September 2025, the UK government committed to buying over $80 billion from U.S. tech and defense companies in the next five years. The agreement also seeks to expand U.S. market access in the United Kingdom, maximizing competitiveness and securing supply chains of U.S. aerospace manufacturers through preferential access to high-quality UK aerospace components.
- European Union: Under the new U.S.-EU agreement, effective September 1, 2025, the United States now applies only the Most-Favored Nation (MFN) tariff rate to certain EU goods, including all aircraft and aircraft parts, effectively eliminating tariffs and returning to duty-free treatment for many aerospace products.
We engage with events and trade shows to accelerate the global reach of the events. Providing participants the assurance that the U.S. Department of Commerce not only recognizes the event but is also committed to using the event to maximize opportunities for U.S. exporters.
| Expanding International Sales through Foreign Military Sales (FMS)Tue., Dec. 9, 2025 |
| Pioneering the Future: U.S.-Brazil Collaboration on Nanosatellite InnovationMon., Dec. 15, 2025 |
| Informational Webinar on the Aerospace & Defense Supplier Summit 2026Wed., Dec. 17, 2025 |
| U.S. Commercial Service Support for UAS CompaniesTues., Jan. 13, 2026 Register here. |
| World Defense Show 2025Riyadh, Saudi Arabia The future of defense integration. Questions: Jason Sproule U.S. Commercial Service, Trade Event Menu of Services |
Tools to Win! Trade Shows and Statistics
Our mission is to increase U.S. exports, enhance job creation, strengthen national security, promote and protect U.S. commercial interests abroad, and deliver customized solutions to ensure that U.S. businesses compete and win in the global marketplace. Export assistance is provided to U.S. companies who manufacture goods and/or provide services of at least 51% U.S. content.
We assist companies in the following areas:
— International Trade Counseling,
— Business Matchmaking,
— Market Intelligence,
— Customized Services, and much more.
Contact Us to find your local International Trade Specialist.
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Please direct newsletter questions to Erica Ramirez at Erica.Ramirez@trade.gov.
