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Last Updated: Monday, 1 August 2005, 07:02 GMT 08:02 UK
Japan slaps trade sanctions on US
Workers and steel car doors in a Japanese factory
Japan said it has repeatedly urged the US to abide by the WTO ruling
Japan has hit back against the US in a spat over a controversial anti-dumping trade law and said it plans to raise import tariffs by 15% on 15 products.

The trigger for the move has been the US's Byrd Amendment, a law that hands out the money collected in anti-dumping levies to the industries most affected.

Japan, along with other nations, challenged the law and the World Trade Organisation (WTO) declared it illegal.

The European Union and Canada already have imposed retaliatory sanctions.

Striking back

Despite the WTO ruling and assurances from the US that it would phase out the amendment, it is still operating and earlier this year millions of dollars were distributed to US firms.

"The Japanese government has decided that there is a need to more effectively pressure the US by implementing retaliatory measures and promoting the repeal of the amendment," said Trade Minister Shoichi Nakagawa.

"Our country decided today to launch a countermeasure from 1 September over the Byrd Amendment."

Japan will place levies on US steel products such as ball bearings and airplane parts, and the cost of the action could run to as much as 5.7bn yen (29m; $51m), the trade ministry said.

Should the Byrd Amendment be repealed by 1 September, then the tariffs would not be imposed, trade officials said.

Trading partners?

The EU already has hit US-made paper, clothing, fabric, footwear and machinery with increased duties of $28m. Canada has placed $14m worth of similar taxes on US cigarettes, oysters and live swine.

In 2003, Japan, the EU and six other countries won the right to impose $150m of tariffs on US products after the WTO ruled that the Byrd Amendment unfairly protected US producers.

According to reports, Washington has paid out more than $1bn to US makers of ball bearings, steel, seafood, pasta and candles.

Trade issues have come into focus as Japan's economy continues to struggle and the latest current account figures showed that exports remained stagnant in May. With demand in Asia dipping, Japan is very aware that it needs to boost sales to other markets, analysts said.

The US, meanwhile, is keen to protect its exporters at a time when concerns about its recovery continue despite signs that its economy is getting stronger.

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