Japan Sticking New Tariffs on U.S. Steel

TOKYO – Japan will slap 15 percent levies on U.S. steel imports (search) starting Sept. 1 in retaliation for American steel industry protection measures, the trade ministry said Monday, turning up the heat on a long-festering dispute between the world's two largest economies.

The tariffs, which could rise as high as $51 million, will target ballbearings, airplane parts and other steel products, the Ministry of Economy, Trade and Industry said.

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

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Nakagawa said Tokyo had no choice but to move after realizing there was very little chance that the amendment would be repealed before the end of the fiscal year ending Sept. 30.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

The tariffs would not be imposed if the Byrd Amendment — named after West Virginia Senator Robert Byrd — were repealed by Sept. 1, trade officials said.

Hideji Sugiyama, Japan's Vice Minister of Economy, Trade and Industry, said that after repeatedly urging American officials to repeal the duties, taking retaliatory countermeasures was "a right recognized by the WTO as justified."

"We hope the United States will take these retaliatory measures seriously and promptly withdraw the Byrd amendment," he told reporters.

But he tried to play down any larger effect that the new tariffs may have on relations between the two major trading partners.

"I do not think it will have a bad effect on Japan-U.S. relations," Sugiyama said.

Neither the U.S. Embassy nor the American Chamber of Commerce in Japan had an immediate reaction.

The Japanese decision follows similar moves by the 25-nation European Union and Canada, which slapped 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.