War footing

26 March 2018 By Quentin Webb

U.S. metals tariffs won’t hurt Tokyo much. But trade tensions can cause indirect harm too, since Japan is a big supplier to China, and market jitters unhelpfully boost the yen. President Trump’s scorn for a close ally hints at pressure to come over cars, agriculture and currency.

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Japan’s chief cabinet secretary, Yoshihide Suga, said on March 23 it would be extremely regrettable if U.S. tariffs on steel and aluminium applied to Japan, and he would continue to urge the United States to exempt his country.

The White House will exempt Argentina, Australia, Brazil, South Korea, Canada, Mexico and the European Union from levies of 25 percent on steel and 10 percent for aluminium from now until May, but the suspension does not include Japan.

Japan’s Topix share index fell 3.6 percent on March 23, with makers of industrial machinery and construction equipment hit particularly badly. The yen rose above 105 to the dollar for the first time since November 2016.

Signing a separate memorandum on March 22 that could lead to the imposition of tariffs worth up to $60 billion on Chinese goods, U.S. President Donald Trump said many other countries had also traded unfairly with the United States.

“I’ll talk to Prime Minister [Shinzo] Abe of Japan and others — great guy, friend of mine — and there will be a little smile on their face. And the smile is, ‘I can’t believe we’ve been able to take advantage of the United States for so long.’ So those days are over,” Trump said.

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