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Japan will indefinitely postpone retaliatory measures against recently imposed U.S. steel import tariffs to give Washington time to exempt more Japanese items, the trade ministry said Thursday.

A 100 percent tariff on certain U.S. steel products was to be imposed Tuesday.

Takeo Hiranuma, minister of the economy, trade and industry, made the decision following an hourlong phone conversation with U.S. Trade Representative Robert Zoellick.

“In the conference with (Zoellick), we learned that the United States is constructively examining product exclusions,” Hiranuma said. “We will make efforts to solve the issue through dialogue.”

Japan could go ahead and apply the tariffs if the domestic industry is not satisfied with the product exclusions the U.S. is pondering, Hiranuma said.

He did not specify how long Japan might wait before it makes a final decision on the proposed retaliatory tariffs, expressing willingness to act flexibility depending on U.S. efforts.

The administration of President George W. Bush on March 20 announced the imposition of three-year tariffs aimed at helping the beleaguered U.S. steel industry. At the time, it said its deadline for finalizing a list of exclusionary items would be early July.

But Washington later decided to allow additional requests for exemptions from domestic users and foreign producers, which effectively nullified its earlier-stated deadline.

With Washington’s decision-making timetable apparently up in the air, Japan’s postponement of retaliatory steps is, likewise, indefinite, ministry officials said.

In 2001, Japan exported 2.2 million tons of steel to the U.S. Using that figure as a base, it is estimating that it is asking for exemptions on exports of 700,000 tons.

The U.S. has so far approved exclusions on 170,000 tons, according to the ministry.

Since the U.S. imposed the rate hikes, Japan has been demanding they be abandoned or that the U.S. offer compensation by lowering tariffs on other Japanese products.

During Thursday’s ministerial telephone conference, the issue of compensatory measures was barely mentioned, the ministry officials said.

In May, Japan requested the Geneva-based WTO to set up a dispute settlement panel to investigate the legality of the U.S. trade barriers. The ministry expects a final ruling by the proposed panel in September.

The European Union, which is fighting a similar battle against the U.S. tariffs, recently postponed a decision on its proposed retaliatory taxes while reserving the option to impose them in the future.

U.S. politicians angry

WASHINGTON (Kyodo) A bipartisan group of lawmakers from the U.S. House of Representatives has sent a letter to Treasury Secretary Paul O’Neill, criticizing Japan’s recent market interventions to weaken the yen.

The letter, dated Tuesday, urges Washington to stop Tokyo from pushing down the yen and to raise the issue at a Group of Seven finance minister meeting in Canada this weekend.

The Bank of Japan conducted dollar-buying intervention four times between May 22 and June 3.

The letter says the intervention is unacceptable in that it represented virtual subsidies for Japanese exporters.

If Japan continues to boost the value of the dollar against the yen, U.S. manufacturers and farmers will be dealt a severe economic blow, the letter says.

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