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Leaving in place high tariffs that lack grounds could destabilize the free trade system. Japan should persistently make the United States take action to completely eliminate the tariffs.
The U.S. government this month eliminated part of the additional 25% tariff it had imposed on steel imports from Japan. Up to 1.25 million tons per year will be exempt from tariffs. The additional tariff of 10% on aluminum was maintained.
The additional tariffs were introduced in 2018 as part of the protectionist policies of then U.S. President Donald Trump’s administration.
The tariffs were imposed on the grounds of national security threats because the U.S. steel industry was being hit hard as China’s overproduction of steel was decimating the market. Steel products from Japan and the European Union were also among those targeted.
After the change in administration to one that places importance on relations with allies as led by U.S. President Joe Biden, the United States negotiated with the parties concerned on a review of the tariffs. First, an agreement on partial elimination was reached with the EU, then also reached with Japan and Britain.
This can be a step forward toward eliminating unfair tariffs, but it is not a complete elimination of them and it cannot be deemed acceptable at all.
The duty-free cap of 1.25 million tons per year was reportedly set based on the average import volume for the period from 2018 to 2019, but this is much lower than the import volume of 1.73 million tons in 2017, the year before the imposition of the additional tariffs. In the first place, such upper limits should not be set, and these tariffs, including on aluminum, should be eliminated.
After the imposition of additional tariffs, the U.S. steel industry’s performance reportedly recovered. The Biden administration may have been unable to go ahead with the complete elimination of tariffs out of consideration for the steel industry, a Democratic Party base in the run-up to the U.S. midterm elections in November.
However, the logic that steel exports from Japan, an ally of the United States, threaten U.S. national security is absurd.
The rules of the World Trade Organization prohibit unilateral tariff measures, but allow exceptions for security reasons. Abusing them could undermine the free trade system.
The Japanese government needs to work more closely with the EU and Britain toward the United States’ complete elimination of the tariffs. The United States, the world’s largest economy, should realize the significance of its responsibility.
Global inflation, combined with the impact of Russia’s invasion of Ukraine, has pushed up the prices of resources and raw materials. Steel prices are also on the rise. Eliminating tariffs would likely contribute to pushing down steel prices in the United States.
The crisis in Ukraine has highlighted the importance of strengthening the unity of the democratic camp in economic aspects, including the procurement of resources. A cooperative system is essential in securing a wide range of goods. The United States, which should be the leader of such a system, must not dampen this momentum by taking self-serving measures.
