Asia Minute: Japan Stung by Tariff Threat

Mar 26, 2018

Steel
Credit HeungSoon / Pixabay

President Trump’s recent talk about trade tariffs has focused on China. But another trade dispute looks like it will take a toll on a country very important to Hawaii. HPR’s Bill Dorman has more in today’s Asia Minute.

President Trump started the current round of trade threats with tariffs on steel and aluminum. He cited a 1962 law concerning national security; the idea being that those metals are “essential for key military and commercial systems”—and therefore would be vulnerable to foreign suppliers.

That set off a scramble among a series of countries, arguing that their alliances with the United States are so close that their exports pose no threats.

By the end of last week, the list of countries not subject to immediate tariffs included Canada and Mexico, the European Union, Argentina and Brazil—and a couple of Asia Pacific countries: Australia and South Korea.

Notably absent from that list of exemptions: Japan.

According to Commerce Department figures, only about 5-percent of U.S. steel imports come from Japan. That’s much less than Canada, the European Union, and even South Korea.

But this dispute may be about more than metals.

Trade Minister of Japan Hiroshige Seko
Credit Совет Федерации / Wikimedia Commons

Many analysts believe the move is an effort to try to force Japan into much broader bi-lateral trade negotiations.

Japanese Trade Minister Hiroshige Seko called the lack of an exemption for Japan on the metals tariffs “extremely regrettable”—saying that he understands the U.S. “wants to negotiate a free trade agreement.”

The Trade Minister added that he looks forward to “constructive talks” with the United States.