US Asks Japan Not To Launch Retaliatory Tariffs

by Mary Swire, Tax-News.com, Hong Kong

25 April 2002

It would appear from recent reports that mixed messages are being sent out by the United States in the ongoing dispute over steel import taxes imposed earlier this year.

Speaking to the South China Morning Post on Wednesday, Japanese Trade Minister Takeo Hiranuma revealed that, during a telephone conversation on Tuesday, US Trade Representative Robert Zoellick asked Japan to refrain from imposing retaliatory tariffs on United States goods until after the World Trade Organisation has ruled on the issue.

According to the Japanese Minister, Mr Zoellick revealed that although Japan's right to levy counter-taxes on US products expires on June 17, the deadline for the submission of proposals can be extended through the use of various legal interpretations.

Mr Hiranuma told the newspaper on Wednesday that : 'Mr Zoellick said that if Japan were to take retaliatory measures, it would be a unilateral action and that he was opposed to it. He also said that a unilateral action would only be welcomed by protectionist forces within the United States.'

He announced that he had reassured the US Trade Representative that any measures taken by Tokyo in retaliation would be in accordance with WTO rules, and would not be taken unilaterally.

Meanwhile, however, a parallel report in the SCMP detailing a meeting between Chinese and American officials on the issue suggested that there had been progress made in negotiations, and that the United States was considering exempting the Chinese mainland from the import tax.

Although the high-level meeting failed to resolve the dispute, the newspaper revealed that the Chinese Foreign Trade Minister, Shi Guangsheng had 'hinted at headway towards resolving the dispute after meeting visiting US Commerce Secretary Donald Evans.'

'Our demand is to have our products exempted from [the US measures]. If they can't be exempted, then they should give us compensation,' the Minister told the news service, and said that Mr Evans had agreed to provide assistance in exempting China from the tariffs.

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