Japan Notifies WTO of Intention to Take Measures against New U.S. Tariffs

May 19, 2018

Tokyo- The Japanese government said Friday night that it has informed the World Trade Organization of its readiness to take countermeasures against U.S. tariffs on imported steel and aluminum introduced earlier this year.

The move is part of Tokyo's efforts to have Washington exempt Japanese products from the new duties, informed sources said, adding that the tariff issue is likely to be high on the agenda at a new round of Japan-U.S. trade talks kicking off as early as mid-June.

Under WTO rules, Japan is allowed to impose add-on tariffs on products from the United States to offset losses from the U.S. measure.

Japan exports 2 billion dollars' worth of steel and aluminum products to the United States annually. Estimating that it will have to pay 50-billion-yen tariffs each year, Japan will consider imposing additional tariffs of the same amount on U.S. imports.

But a Japanese government official said, "We want to avoid an exchange of retaliatory trade measures." This is partly why Japan did not indicate specific target items or tariff rates for the possible countermeasure.

To put such additional tariffs into effect, Japan needs to present a list of target items to the WTO and set a 30-day transitional period.

The Japanese industry ministry said it will make an appropriate judgment based on the United States' measure and its impact on Japanese companies.

In March, the United States put into effect additional tariffs of 25 pct on steel and 10 pct on aluminum imported from many trading partners, including Japan, as a measure to counter a threat to national security.

Japan has been seeking the exemption of its products from the new tariffs, claiming that they do not pose any threat to the United States' national security. But Washington has yet to respond to the request.

At their meeting in April, Japanese Prime Minister Shinzo Abe and U.S. President Donald Trump agreed to start the new bilateral trade talks.

In the upcoming talks, the United States is expected to demand a reduction in its trade deficit with Japan, in exchange for exempting Japanese products from the new metal duties.

Japan apparently aims to hold in check the United States' one-sided demands by clarifying that it reserves the right to take countermeasures under WTO rules, analysts said. Jiji Press