Tokyo is racing to reach a trade deal with the U.S. in order to stem further export weakness. But there appears to be limited progress in talks, given that Japan is unwilling to drop its demand that the U.S. exempt the country from all trade tariffs.

Japan’s exports fell for the first time in eight months as the US tariff campaign weighed on global trade, raising the risk of a technical recession after the economy contracted at the start of the year.

The fall was softer than the 3.8% decline forecasted by economists polled by Reuters, but was a reversal compared to the 2% gain recorded in April.