Japan to keep investment pledge to the US after tariff ruling

The Japanese government is closely monitoring whether US tariff policy-related uncertainties will resurface following the US 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 jeopardising the tariff deal with the United States, which was reached after tough negotiations.

The US court ruled that the International Emergency Economic Powers Act, or IEEPA, under which the Trump administration imposed 15 per cent 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-US 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 per cent 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 per cent.

The Japanese government expected such a move.

Trade minister Ryosei Akazawa, who is in charge of negotiations with the US 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 US$36 billion in three projects, as the first instalment of its US$550 billion 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 US side to select projects for the investment and loan pledge.

The US government has imposed tariffs on a wide range of goods, including steel, aluminium, 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 US 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.

[Copyright The Jiji Press, Ltd.]