Japan Concerned about Possible Extra U.S. Auto Tariffs

May 25, 2018

Tokyo- The Japanese government is concerned about a move by U.S. President Donald Trump's administration that may lead to higher tariffs on U.S. imports of automobiles and auto parts.

The possible additional tariffs "would disrupt the global market," Economy, Trade and Industry Minister Hiroshige Seko told reporters Thursday. Trade policies "should be consistent with the World Trade Organization's rules," he added.

Seko said he will try to persuade the United States to refrain from imposing the auto tariffs, which would follow its implementation of additional steel and aluminum tariffs in March.

The Trump administration is poised to levy duties of up to 25 pct if an investigation under Section 232 of the 1962 Trade Expansion Act finds national security threats from auto imports, according to U.S. media reports.

The move preceded the launch of bilateral trade talks expected for mid-June. During the talks, the U.S. side may offer an exemption from the possible auto tariffs to elicit an agreement from Japan to start negotiations on a bilateral free trade pact.

Prime Minister Shinzo Abe has told parliament that the new trade dialogue, agreed at an Abe-Trump summit in April, is not a prelude to the FTA negotiations.

In 2017, Japan's auto exports to the United States totaled 4.56 trillion yen, accounting for nearly one-third of its overall exports to the world's largest economy.

The possible auto tariffs would have a "greater impact" on the Japanese industry than the steel tariffs, Japan Chamber of Commerce and Industry Chairman Akio Mimura told a press conference Thursday.

"We can only keep an eye on the U.S. move at the moment," said an official of Toyota Motor Corp., which annually ships some 700,000 vehicles to the United States.

The additional auto tariffs could force Japanese manufacturers to boost production in the United States.

Toyota and Mazda Motor Corp. plan to launch a new factory with an annual output capacity of 300,000 vehicles in the United States.

"We can beef up production equipment there, but we need to strengthen our sales capability first," Mazda President Masamichi Kogai told reporters. Jiji Press