Business

Tokyo’s response to Trump tariffs will be ‘within the framework of the WTO’: Trade minister Hiroshige Seko

Kyodo, AP

Trade minister Hiroshige Seko said Friday that Tokyo will consider actions that are within the framework of the World Trade Organization in response to U.S. President Donald Trump’s move to impose stiff tariffs on steel and aluminum imports.

“It is extremely regrettable. The measures will trigger confusion in the steel market not only in the United States but in Asia,” Seko told a news conference. “We will study necessary responses within the framework of the WTO.”

Thursday in Washington, Trump ordered steep new tariffs on steel and aluminum imports to the U.S., vowing to fight back against an “assault on our country” by foreign competitors.

Seko said he will discuss responses to the tariffs at a planned meeting Saturday with EU Trade Commissioner Cecilia Malmstrom and U.S. Trade Representative Robert Lighthizer in Brussels. The minister will also hold separate talks with his EU and U.S. counterparts on the sidelines.

“I want to tell them that falling to exchanges of unilateral measures will not be in the interest of any country,” Seko said, in an apparent reference to the European Union, which has suggested retaliatory taxes in response to the U.S. tariff imposition.

Seko said Japan’s steel exports to the United States, used for automobile manufacturing, are “contributing greatly to the U.S. industry and (the creation of) jobs.”

Unswayed by Republican warnings of a trade war, Trump said he would exempt Canada and Mexico while negotiating for changes to the North American Free Trade Agreement.

The new tariffs will take effect in 15 days, with Canada and Mexico indefinitely exempted “to see if we can make the deal,” Trump said. NAFTA talks are expected to resume early next month.

“The American aluminum and steel industry has been ravaged by aggressive foreign trade practices. It’s really an assault on our country. It’s been an assault,” Trump said at the White House. He was joined by steel and aluminum workers holding white hard hats.

American steel and aluminum workers have long been betrayed, but “that betrayal is now over,” Trump said. The former real estate developer said politicians had for years lamented the decline in the industries, but nobody was willing to take action.

As he has indicated previously, Trump said he would levy tariffs of 25 percent on imported steel and 10 percent on aluminum. But he said during a Cabinet meeting earlier in the day that the penalties would “have a right to go up or down depending on the country and I’ll have a right to drop out countries or add countries. I just want fairness.”

Business leaders, meanwhile, have continued to sound the alarm about the potential economic fallout from tariffs, with the president and CEO of the U.S. Chamber of Commerce raising the specter of a global trade war. That scenario, Tom Donohue said, would endanger the economic momentum from the GOP tax cuts and Trump’s rollback of regulations.

“We urge the administration to take this risk seriously,” Donohue said.

The U.S. president suggested in the meeting with his Cabinet that Australia and “other countries” might also be spared, a shift that could soften the international blow amid threats of retaliation by trading partners.

“We’re going to be very fair, we’re going to be very flexible but we’re going to protect the American worker as I said I would do in my campaign,” Trump said.

People briefed on the plans ahead of the announcement said all countries affected by the tariffs would be invited to negotiate with the administration to be exempted from the tariffs if they can address the threat their exports pose to U.S. manufacturers. The exemptions for Canada and Mexico could be ended if talks to renegotiate NAFTA stall.

The process of announcing the penalties has been the subject of an intense debate and chaotic exchanges within the White House, pitting hard-liners against free trade advocates such as outgoing economic adviser Gary Cohn.

In Tokyo, the steel industry was also concerned that the protectionist measures could affect global trade.

Kosei Shindo, chairman of the Japan Iron and Steel Federation, echoed the view, saying that the measures may create “a negative chain reaction by other countries taking similar actions under similar pretenses.”

He said the Japanese steel industry will study the impact of the U.S. decision on levies “very carefully” and continue “to advocate for the adoption of policies based on the principles of free trade.”

The Japan Aluminium Association also said the U.S. decision to impose tariffs is “not in accordance with international trade rules” and is “extremely regrettable.”

“Many of the aluminum materials procured by U.S. customers from Japan are difficult to obtain or switch (to) from other sources,” the industry body said, warning that the import curb could have an adverse impact on the U.S. industry. “We request that these trade restrictions be withdrawn,” it added.