Japan looks to join the U.S. and European Union in imposing anti-dumping tariffs on Chinese steel exports, though findings that domestic steelmakers have not been substantially harmed could make such measures difficult to justify.
Leaders at the Group of Seven summit on Friday said they were prepared "to consider the broad range of trade policy instruments and actions" required to bring excessive global steel production capacity under control. This "could conceivably include such policies as anti-dumping and countervailing tariffs," a top official at Japan's trade ministry said. Japan will keep a close watch on imports of a variety of materials, including steel, the source indicated.
An anti-dumping duty would apply to goods being exported to Japan for less than their market prices at home. In raising these products to a more appropriate price, the policy would combat low-cost imports' negative impact on Japanese companies. A countervailing tariff would be similarly applied to goods produced with the help of foreign government subsidies.
Both measures are permitted by the World Trade Organization in cases where real damage is being done. But Japan has no experience applying them to steel products.
The government this month began letting industry organizations, including those in the steel sector, request anti-dumping measures more easily. These requests will result in action if an investigation shows that low-cost imports are harming Japanese businesses by distorting the market.
The U.S. Commerce Department said Wednesday it will levy new anti-dumping duties on steel products from five nations and regions, including China. The EU has kept pace, imposing temporary tariffs and launching investigations into trade policy cases involving Chinese steel several times this year. There are also plans to pursue these efforts through the Organization for Economic Cooperation and Development, which is involved in negotiations with China.
Yet Japan could have trouble introducing trade measures swiftly. Many of the headwinds faced by Japan's steelmakers originate in low-cost competition and obstructive government policies in foreign markets such as India. "Low-cost Chinese imports to Japan are not particularly obvious" as an issue, an industry insider said. There are thus limits on what Tokyo can do about Chinese steel exports.
China is also pushing back harder against advanced nations' trade protections. Beijing has demonstrated its strong displeasure with the latest tariffs and other measures imposed by the U.S., indicating that it will consider hatching its own policies in response. International trade friction will likely grow more intense as the slowing global economy stirs resentment in developed and emerging nations alike.
Source: nikkei.com