Japan soon to slap a tariff on U.S. steel

TOKYO -- Japan took a retaliatory step against the American steel industry Monday and announced it will impose 15 percent levies on U.S. steel imports starting Sept. 1, urging the United States to promptly deal with a long-festering dispute between the world's two largest economies.

The tariffs, which could run as high as 5.7 billion yen ($51 million), will target ballbearings, airplane parts and other steel products, the Ministry of Economy, Trade and Industry said.

It would be the first time Japan announced a retaliatory step against a trade partner.

Trade Minister Shoichi Nakagawa said Tokyo had no choice but to move after realizing there was very little chance that the amendment would be repealed before the end of the fiscal year ending Sept. 30.

"Therefore, the Japanese government has decided that there is a need to more effectively pressure the U.S. by implementing retaliatory measures and promoting the repeal of the amendment in Congress," he said in a statement.

Japan has long demanded the repeal of duties imposed by the United States on Japanese steel products under the so-called Byrd amendment, an antidumping law ruled illegal by the World Trade Organization.

The tariffs would not be imposed if the Byrd Amendment -- named after West Virginia Sen. Robert Byrd -- were repealed by Sept. 1, trade officials said.

Vice Trade Minister Hideji Sugiyama stressed that Japan has followed appropriate procedures before deciding on the retaliation, and said that the measure "should not harm Japan-U.S. relations."

John Stubbs, a spokesman for the U.S. Trade Representative's office, said the United States was disappointed with Japan's decision.

"The U.S. is working to comply with its WTO obligations," he said. "In any event it is important to remember that the WTO decisions in these disputes does not affect underlying trade laws.

"The United States will continue to vigorously implement our trade laws to make sure Americans are treated fairly."

The Japanese decision follows similar moves by the 25-nation European Union and Canada, which imposed penalty tariffs on millions of dollars' worth of U.S. imports in retaliation for the amendment on May 1.

Washington placed tariffs on hot-rolled steel from Japan, Brazil and others starting in 1999 on allegations that those countries were selling their products at unfairly low prices.

Passed in October 2000, the Byrd amendment imposed penalty tariffs and also awarded American companies the revenue collected by the U.S. government on those duties.

Previously, the extra border taxes went into the government's coffers instead of being turned over to U.S. companies. Foreign companies complain that not only are their products being hit with penalty tariffs, but their U.S. competitors are getting a windfall from those tariffs.

The World Trade Organization ruled in January 2003 that the U.S. measure unlawfully protected the American steel industry. When it was not repealed by the end of that year, Japan, the European Union and six other countries won the right to impose a total of $150 million in economic sanctions against the United States.

Japanese officials have said that they have the right to take countermeasures after repeatedly urging American officials to repeal the duties.

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