The steel dispute between Japan and the United States will calm down shortly because Washington is expected to exempt more products from its import safeguard tariffs, including those from Japan, the head of the largest business lobby in the United States said Wednesday.

“Over a short period of time, you will see sufficient exemptions,” said Thomas J. Donohue, president and chief executive officer of the U.S. Chamber of Commerce.

The U.S. imposed tariffs of up to 30 percent on an array of steel imports in March in response to complaints from U.S. manufacturers that they are being hurt by cheap steel imports. The tariffs will last for three years.

However, the U.S. intends to exempt certain products from the import curbs for the convenience of American users, and the product exclusions also allow foreign exporters to continue supplying steel to the U.S. market, though on a limited scale.

“It (the steel issue) won’t be a long-term problem,” Donohue said in an interview in Tokyo.

The president of the U.S. business lobby, which boasts a membership of about 3 million companies and organizations, is making a four-day visit to Japan to promote understanding about the U.S. economy and to discuss the Japanese economy, especially progress on reform.

Asked about the widely held view that protectionism is rising in the U.S., as exemplified by the steel tariffs and the farm subsidy bills that have just been signed into law, Donohue stressed that the U.S. is and intends to be the most open market in the world, if other countries are open to U.S. goods and services.

“As long as American producers, American farmers and the American financial community are able to have a fair opportunity to trade around the world, Japan and other countries should feel very comfortable that the U.S. market will be open to their goods,” he said.

Toward that end, the U.S. is negotiating with its trade partners to open more markets. In that context, the U.S. Chamber of Commerce contends that President George W. Bush should have broader authority in negotiating trade issues with other countries, Donohue said.

As for Japan, he said it is absolutely essential that the world’s second-largest economy strengthen and reassert itself as a leader in Asia.

While assessing Prime Minister Junichiro Koizumi as unable to implement his reform agenda due to conflicts of interest, Donohue said he is encouraged by Koizumi’s willingness to push forward various reforms ranging from deregulation to measures for accelerating bad-loan disposal.

“Fundamental economic reform is very difficult since it has to deal with political realities,” Donohue said. “But I’m very encouraged that Japan is entering the new era of reality.”

Concerning the U.S. economy, Donohue said that various economic indicators ranging from employment to inflation and interest rates show it is making strong progress.

However, he said, there is lingering concern that American companies may shy away from investing at the level needed to keep the economy running strong, due to the impact of terrorism and distrust of the accounting system following the collapse of energy firm Enron Corp.

Although these issues will eventually resolve themselves, they may slow down corporate activity and force companies to keep money in their pockets, which could negatively affect the Japanese economy, he said.

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