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Trump's steel and aluminum tariffs have Japan in a bind

The Japanese government is calling on the United States to exempt Japan from tariffs on steel and aluminum imports recently announced by President Donald Trump, but U.S. administration figures have indicated there will be no exceptions.

The European Union (EU) and China are considering retaliatory measures. However, the importance of the Japan-U.S. alliance has Tokyo looking to avoid a hard-line response to the tariffs, and the Japanese government is finding it difficult to formulate a position.

Speaking on the announced tariffs, Peter Navarro, director of the White House's Office of Trade and Manufacturing Policy (OTMP) told a CNN program on March 4, "There will be an exemption procedure for particular cases where we need to have exemptions so that business can move forward, but at this point in time there will be no country exclusions."

Japan has appealed to the U.S. for just such an exclusion as an important American ally. U.S. Commerce Secretary Wilbur Ross revealed during a separate TV appearance that many countries had requested talks on tariff exemptions, and that any decision was up to the president. However, Trump tweeted on March 5, "Our friends and enemies have taken advantage of the U.S. for many years," indicating he was resolved to apply the steel and aluminum tariffs to all nations.

A March 5, 2018 tweet by U.S. President Donald Trump is seen in this screen grab.

Chief Cabinet Secretary Yoshihide Suga told a March 5 news conference, "We will closely examine the (tariff) move and its impact on Japanese companies. First and foremost, we will discuss the issue with the United States."

According to the Japan Iron and Steel Federation (JISF), most of Japan's steel exports consist of "high value-added products that U.S. manufacturers cannot make." That being the case, Japanese steel products may qualify for individual tariff exemptions, and Tokyo is keeping a close eye on Washington's attitude going forward.

The EU and China are hinting they will retaliate. The administration of Prime Minister Shinzo Abe, however, is looking to continue building a good economic and security relationship with the U.S., and the Abe government wants to avoid friction between the two countries.

One senior Japanese trade negotiator said that Tokyo "is prioritizing avoiding a trade war," and plans to continue efforts to persuade the Trump administration not to issue the steel and aluminum tariffs. Meanwhile, Japan, the EU and the U.S. are united in their calls for China to reign in its surplus steel production, and Tokyo is considering coordinating talks between Washington and the EU to prevent a serious confrontation.

However, Trump has his eyes firmly fixed on the U.S. midterm congressional elections this autumn, and appears to view his tariff moves as essential to firing up his base. The OTMP's Navarro has suggested that a formal announcement of the tariffs may not come until next week. However, the announcement is very likely to be made before a special March 13 election to fill a vacant House of Representatives seat in Pennsylvania, heart of the U.S. steel industry. That leaves virtually no time for Japan to do any convincing.

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