The Japan Times - Japan says US tariffs 'extremely regrettable', may break WTO rules

Japanese firms are the biggest investors into the United States but Tokyo has failed to secure an exemption, with Trump announcing a hefty 24-percent levy on Japanese imports.

"I have conveyed that the unilateral tariff measures taken by the United States are extremely regrettable, and I have again strongly urged (Washington) not to apply them to Japan," Yoji Muto, trade and industry minister, told reporters.

He said he spoke to US Commerce Secretary Howard Lutnick before Trump's announcement of a new 10-percent baseline tariff and extra levies on selected countries -- including close strategic ally Japan.

"Japan (are) very very tough. Great people.... They would charge us 46 percent, and much higher for certain items," Trump said. "We are charging them 24 percent."

Muto said he had explained to Lutnick "how the US tariffs would adversely affect the US economy by undermining the capacity of Japanese companies to invest".

"We had a frank discussion on how to pursue cooperation in the interest of both Japan and the United States that does not rely on tariffs," Muto said.

Government spokesman Yoshimasa Hayashi also said that the US measures may contravene World Trade Organization (WTO) rules and the two countries' trade treaty.

"We have serious concerns as to consistency with the WTO agreement and Japan-US trade agreement," he told reporters.

Asked if Japan will impose retaliatory tariffs or is considering filing a suit to the WTO, Hayashi said: "We decline to disclose details of our considerations."

- Abe exception -

In Trump's first term, then prime minister Shinzo Abe, who had warm relations with Trump, managed to secure an exemption from tariffs.

In February, Trump hosted Prime Minister Shigeru Ishiba for apparently friendly and fruitful talks, hailing a "new golden age for US-Japan relations".

Ishiba promised a trillion dollars in investments and to import what Trump called "record" imports of US natural gas.

Japan, together with South Korea, would also partner on a "gigantic natural gas pipeline in Alaska", Trump said.

Japan has also failed to win exclusion from 25-percent tariffs on imports into the United States by its massive auto sector that came into force on Thursday.

Last year, vehicles accounted for around 28 percent of Japan's 21.3 trillion yen ($142 billion) of US-bound exports, and roughly eight percent of all Japanese jobs are tied to the sector.

Japanese carmakers ship about 1.45 million cars to the United States from Canada and Mexico, where they operate factories, Bloomberg News reported.

By comparison Japan exports 1.49 million cars directly to the United States, while Japanese automakers make 3.3 million cars in America.

Y.Hara--JT