Japan's Aluminum Industry Urges Trump to Pull Back on Tariffs

  • Trade move could spark an escalation in global protectionism
  • Group’s also concerned that companies in Japan will suffer

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Japan’s aluminum industry is calling on President Donald Trump to rethink his plan to levy a 10 percent tariff on all imports of the metal, saying the action would hurt the country’s sales and could spill over into other industries, triggering a rise in global protectionism.

“Our biggest concern is that individual producers in this country will lose business,” Yoshihisa Tabata, executive director of the Japan Aluminium Association, said in an interview in Tokyo on Monday. “What makes things worse is that this could push the world into protectionism, hurting the viability of broader industries that are based on international division of labor.” The group represents about 130 companies.

Trump has vowed to stick to his plan to impose across-the-board tariffs of 25 percent on steel and 10 percent on aluminum imports even as opposition grows from allies and adversaries alike, and he expects to sign a formal order this week or soon after. While there’ll be no country exclusions, there’ll be “an exemption procedure for particular cases where you need to have exemptions so that business can move forward,” Peter Navarro, director of the National Trade Council at the White House, said on CNN’s “State of the Union” Sunday.

Japan buys primary aluminum from overseas and processes it into sheet and extrusions used in vehicles and heat exchangers for domestic sale and export. While the country is not a major shipper to the U.S., there’s a risk prices in Asian markets will be hurt by inflows of Chinese metal that are diverted from the U.S., according to a spokesman for product maker UACJ Corp. last month. The company estimates that there will be little direct impact on its business as it makes products in the U.S. and doesn’t rely on exports from Japan.

Other aluminum product makers include Kobe Steel Ltd., Nippon Light Metal Holdings Co. and Lixil Group Corp. Kosei Shindo, the steel federation chairman who’s also president of Nippon Steel & Sumitomo Metal Corp., said last week that Trump’s tariffs risk opening a Pandora’s Box of retaliation that could spread well beyond the industry.

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