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Japan decides to retaliate against high US steel tariffs

Japan said it will notify the WTO today of plans to retaliate against US steel tariffs after Washington rebuked Tokyo's last-minute plea for compensation or an annulment of the hefty duties.

The trade ministry announced yesterday it planned to impose 100 percent tariffs on US$4.88 million worth of US steel and steel products from June 18, the first such action by Tokyo.

That would be part of a larger retaliation plan worth US$123.43 million to be implemented if the WTO ruled against the US for placing tariffs of up to 30 percent on steel imports to protect its ailing domestic industry.

Still, Tokyo left the door open for further negotiations before it implements retaliatory steps next month.

"This is a necessary step to retain our right to the rebalancing measures. What is still important is to continue talking to them," Vice Trade Minister Katsusada Hirose told reporters.

The feud stems from US President George W. Bush's decision in March to impose what he called safeguard measures for American steel companies that are no longer competitive in the global market, which has sparked threats of reprisals from the EU, South Korea and other steelmaking countries.

"We had been asking for compensation or an annulment of the duties, but the US did not respond. And so we will be informing the WTO of our plans," a trade official told a news conference.

"We've never been forced to take such action, but then there's never been a case like this."

Japanese Trade Minister Takeo Hiranuma had asked US Trade Representative Robert Zoellick in a telephone call yesterday to defuse the row, but the two sides failed to agree, the official said.

Today is the deadline for Japan to submit a list of retaliatory measures to the world trade body.
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