Japanese firms applying for US steel tariff exemptions

March 24, 2018

Tokyo- Japanese companies have started procedures to win exemptions from the US tariffs on steel and aluminum imports invoked Friday, informed sources said.

It will take up to 90 days for the US government to decide whether to exclude specific products from the tariffs.

Japanese trade minister Hiroshige Seko expects that exemptions will be granted to at least some products.

The bulk of Japan's steel exports to the United States are custom-made products requiring sophisticated technologies, such as railroad rails, pipes for oil field drilling and automotive steel sheets.

If the supply of these products stops, US manufacturers would be affected.

"There is a high possibility that some products will win exemptions," Seko told a news conference Friday. "Even if no exemptions are granted, US companies would have to continue using products despite the high tariffs if the products are irreplaceable."

"The amounts of steel and aluminum exports are not very large," Sadayuki Sakakibara, chairman of the Japan Business Federation, or Keidanren, said, playing down the direct impact of the new tariffs on the country's business sector.

If Japan cannot win any exemptions, the next possible step would be filing a suit against the United States with the World Trade Organization.

But government officials are cautious, saying that the launch of such a suit would require careful examination of its details and possible impact on Japanese companies.

Behind the cautiousness are concerns that Washington may make a tough request in return for granting exemptions from the tariffs.

"They may request that Japan open up the agricultural market," an agriculture ministry executive said.

Japan should not meet a repeated U.S. request for bilateral trade talks, said a senior Liberal Democratic Party lawmaker with expertise on agricultural affairs. Jiji Press