Japan Gives US Ultimatum On Steel Tariffs

by Mike Godfrey, Tax-News.com, Washington

25 November 2003

Japan is planning to impose retaliatory tariffs on goods imported from the United States if the latter country’s steel import tariffs are not removed by the end of this month according to a report by Kyodo News.

Accordingly, the Japanese government may announce as early as next week new tariffs on steel imported from the US at a rate of 30%, in addition to a 5% special levy on clothes and leather goods.

The US tariffs were designed to be in place for a three year period to March 2005 in order to allow its domestic industry to consolidate and recover. However, with growing opposition from around the world to the tariffs, notably from the European Union, and the WTO dismissing America’s final appeal earlier this month, clearing the way for further retaliatory action, one wonders how long the Bush administration’s resolve will last. Especially as there is said to be division within the administration, with Treasury Secretary John Snow and Commerce Secretary Donald Evans reportedly in favor of scrapping the levies now that a degree of restructuring has taken place within the steel industry.

The Kyodo report stated that Japan’s sanctions would total some 10.7 billion yen per year which roughly equates to the financial damage caused to the nation’s steel producers at the hands of the US tariffs.

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