Japan, EU unfurl reprisals against Trump tariffs

US key allies Japan and the EU notified the World Trade Organization Friday of a wave of retaliatory measures against US tariffs on steel and aluminium, raising the prospects of a trade war.

Japan informed the WTO it had the right to impose tariffs on US goods worth 50 billion yen ($451 million) — equivalent to the impact of the US tariffs newly imposed on Japanese metal products, the foreign ministry said in a statement.

But the ministry stopped short of indicating when Tokyo might take action, saying: “We plan to decide appropriately, considering the impact on Japanese companies as well as related US measures.”

The European Union has made it clear that it does not for now intend to use the counter-measures, but that the notification leaves all options on the table as a June 1 deadline to stop the US administration’s tariffs approaches.

The list drawn up by the Europan Commission, the EU’s executive arm, includes tariffs on peanut butter, motorcycles and denim jeans, in case US President Donald Trump slapped on the tariffs.

Trump sparked fears of a trade war in March when he decided to impose 25 percent tariffs on steel and 10 percent on aluminium imports, primarily to target China, but also allies, including EU countries as well as Japan.

Marking a departure from a decades-long US-led drive for open and free trade, Trump has claimed that massive flows of imports to the United States threatened national security.

While Washington has granted Europe and other allies a delay until the end of the month from imposing the controversial levies, Japan remains on the list of countries facing the tariffs.

China has already taken retaliatory measures but Japan had taken a conciliatory approach, attempting to win exemptions through dialogue.

The trade row has cast clouds over the relationship between Prime Minister Shinzo Abe and Trump, who have forged otherwise close ties pledging together to rid North Korea of nuclear weapons.

Ahead of a summit with Abe in April, Trump tweeted that Japan “has hit us hard on trade for years”.

Japan has warned the tariffs “could have a grave impact on the economic relationship” between the world’s first and third-largest economies.

Exports of steel and aluminium products to the US came to some 200 billion yen last year.

For decades into the 1990s, the two countries battled over their trade flows, but the balance has become less of a hot-button issue under recent US administrations, with China’s trade surplus a greater concern for Washington.

The Europeans have blown hot and cold against the Trump administration, reserving the right to inflict the counter measures while also dangling promises to open trade talks if the US should change course.

EU leaders on Wednesday agreed to discuss a limited trade accord with Washington and pledged to explore opening up the European market to US natural gas — if a permanent exemption is won.

The pledge came despite Trump further flustering the Europeans last week, pulling Washington out of the 2015 international deal with Iran to curb its nuclear programme.

Europe exports around five billion euros ($4 billion) worth of steel and a billion euros worth of aluminium to the United States each year, and the commission estimates Trump’s tariffs could cost some 2.8 billion euros.