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Japan takes aim at U.S. trade policy after tariffs imposed

TOKYO — Japan’s trade ministry expressed concern Monday about protectionist practices to correct economic imbalances, in a thinly veiled criticism of trade policy under U.S. President Donald Trump.

 

In an annual trade report, the ministry warned against the negative impact of taking retaliatory measures against one country’s policy, adding that Japan will seek to resolve trade issues based on international rules, particularly those of the World Trade Organization.

 

Trump’s “America First” trade policy has drawn criticism from his country’s major trading partners. The United States, citing the need to defend national security, has imposed higher tariffs on steel and aluminum imports from countries including longtime ally Japan.

 

Tokyo’s lobbying of Washington to exempt it from the increased tariffs — 25 percent on steel and 10 percent on aluminum — however, has been so far unsuccessful.

 

The Ministry of Economy, Trade and Industry, which released the annual report, said it is keeping the option of starting a dispute settlement process under the WTO. Tokyo has already notified the international body of its intention to consider “rebalancing” steps in response to the U.S. tariffs.

 

“It should be noted that the negative impact will spread globally from turning to restrictive trade policy to correct economic imbalances and taking one retaliatory measure after another,” the ministry’s report said.

 

“In a certain developed country, a swing back to (steps based on) result-oriented criteria has been emerging,” the report said.

 

Under such criteria, a country judges another country’s trade policy and measures as “unfair” based solely on results it views as unfavorable.

 

The “result-oriented” approach tends to lack objectivity and could lead to managed trade, the ministry said in the report, adding that the fairness of a country’s trade policy or measures should be judged by internationally agreed rules.

 

The release of the 2018 report came as Trump’s trade policy continued to grab global attention. The standoff over the U.S. tariffs was evident in the recent summit meeting of the Group of Seven industrialized nations, with fears of a trade war having rattled global financial markets.

 

The imposition of the tariffs “would cause turmoil in global steel and aluminum markets and have a major negative impact on the multilateral trading system as a whole,” the ministry said.

 

On top of the existing steps, the United States has launched a national security investigation into auto imports, sparking fears that the potential slapping of new tariffs would have a significant bearing on Japanese and other foreign automakers.

 

Japan has been calling for the establishment of multilateral free trade arrangements such as the Trans-Pacific Partnership despite the abrupt U.S. pullout after Trump took office.

 

Trump favors bilateral rather than multilateral deals, but Tokyo is seen as reluctant to start negotiations for a bilateral free trade agreement.

 

This year’s report also takes issue with China’s subsidies for aluminum and South Korea’s antidumping duties on stainless steel bars.

 

The report on compliance with trade agreements by major trading partners has been compiled every year since 1992. The ministry incorporates opinions from outside experts and decides how to address pressing trade issues.

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