Japan to Keep Investment Pledge to U.S. after Tariff Ruling

Tokyo, Feb. 22 (Jiji Press)–Despite the U.S. Supreme Court finding President Donald Trump’s reciprocal tariffs unconstitutional, Japan is expected to maintain its 550-billion-dollar investment and loan pledge to the United States under their bilateral tariff agreement. The Japanese government is closely monitoring whether U.S. tariff policy-related uncertainties will resurface following the U.S. top court ruling on Friday. Tokyo has asked Washington to ensure that the court ruling would not affect Japanese companies. Japan will handle the situation carefully to avoid jeopardizing the tariff deal with the United States, which was reached after tough negotiations. The U.S. court ruled that the International Emergency Economic Powers Act, or IEEPA, under which the Trump administration imposed 15 pct reciprocal tariffs on a wide range of Japanese goods, does not grant the president the authority to impose such tariffs. The ruling may affect the basis of the Japan-U.S. tariff agreement. Still, sector-specific tariffs, which could greatly impact Japan, especially its auto industry, are based on Section 232 of the Trade Expansion Act and are therefore not directly affected by the latest court decision. Following the ruling, the Trump administration announced that it would impose additional 10 pct tariffs on its trading partners to replace the reciprocal tariffs. Trump later said on social media that the additional tariffs will be raised to 15 pct. The Japanese government expected such a move. Trade minister Ryosei Akazawa, who is in charge of negotiations with the U.S. side, has said that there “could obviously be legal grounds (other than the IEEPA) to impose tariffs.” This week, Japan announced that it will invest a total of 36 billion dollars in three projects, as the first installment of its 550-billion-dollar pledge. “We’ve agreed on the projects, which will serve the national interests of both Japan and the United States,” said a source familiar with the bilateral talks. The Japanese government plans to continue working with the U.S. side to select projects for the investment and loan pledge. The U.S. government has imposed tariffs on a wide range of goods, including steel, aluminum and pharmaceuticals, while taking relief measures for some items from Japan, including kitchen shelves, apparently in consideration of the Japanese pledge. Over the Trump tariffs, some Japanese companies, including trading firm Toyota Tsusho Corp., have sued the U.S. government, seeking a refund of tariffs. Following Friday’s ruling, Toyota Tsusho said that it will monitor the situation and respond calmly, as refund-related procedures have not been presented. Ricoh Co. noted the need to examine the latest court decision and said that it will closely watch the impact of the ruling on its future business environment. END [Copyright The Jiji Press, Ltd.]