Japan Threatens to Retaliate against U.S. Tariffs.
An article from the Financial Times.
Japan threatens to retaliate against US tariffs
By Mariko Sanchanta in Tokyo
Published: November 26 2003 11:05 | Last Updated: November 26 2003 11:59
Japan on Wednesday threatened to impose $85.2m in retaliatory tariffs on US imports in response to America's decision to keep its duties on steel imports intact.
Japan officially notified the WTO of a list of "rebalancing" tariffs of up to 30 per cent it would impose on US products including steel, plastics and coal. A Japanese finance ministry committee approved the list of sanctions earlier on Wednesday.
The move by Japan marks the first time it has threatened to impose retaliatory tariffs against its single largest trading partner, and follows a similar threat by the European Union earlier this month to impose tariffs of $2.2bn on US goods.
The threat of sanctions by both the EU and Japan come on the heels of a WTO ruling earlier this month that Washington had violated international trade rules by imposing tariffs on steel imports last March.
According to WTO regulations, Japan must wait 30 days before it can impose the tariffs, after which point members of prime minister Junichiro Koizumi's cabinet will make the final decision on whether to proceed.
"If the US does not respond to both Japan and the EU and does not repeal its steel tariffs, Japan will be forced to impose rebalancing tariffs on US goods," said an official at the ministry of economy, trade and industry (METI).
The highest tariffs Japan is set to impose on US goods, at 30 per cent, is on intermediate goods such as petroleum, gold and steel. The lowest tariffs, at 5 per cent, are set to be imposed on consumer goods such as handbags, clothing and linens.
The amount of the retaliatory tariffs, at $85bn, is equivalent to the estimated losses suffered by Japanese steelmakers after the US imposed its steel tariffs last year.
Government officials are privately concerned that if the US does not repeal its steel tariffs, it could set a dangerous precedent that other Asian countries may follow.
"We are concerned that the decision of the US to adopt protective tariffs could affect the behaviour of other Asian countries," said the METI official. "In particular, the Chinese market is become more and more significant for the Japanese steel industry."
Demand for steel materials in China is surging about 20 per cent a year, where demand for Japanese-produced high-tensile steel is particularly strong. About 80-90 per cent of the Japan's leading steelmakers' exports are bound for Asia this fiscal year. |
