China-Japan Trade War Heats Up

Saying that it’s `actual banning of export`, Japan is strongly resisting against the decision made by the Chinese government to lay 100 percent special tariff on Japan’s three major export items including automobiles from 22th. This incident, ignited by Japan’s provisional implement of the safeguard, may be escalated to the biggest trade war ever since the World War II.

Chief Cabinet Secretary Yasuo Fukuda said at a news conference yesterday, ``we officially protested to Long Yongtu, Vice Minister of China`s Ministry of Foreign Trade and Economic Cooperation through Koreshige Anami, Japan’s Ambassador to China, and strongly demanded the retraction of the retaliatory tariff on 21st.

When China warned Japanese government early this week of the possible implement of the tariff against automobiles, cell-phones, and air-conditioners, Japan expected that there would be not much serious effect because the number of the exported products has not been substantial. Japan, who thought the warning would be just a diversionary measure, was caught off guard. If the price of the products suddenly jumps up twice, they actually cannot sell those goods.

Chinese Foreign Trade Ministry explained the background of the move, ``we took the measure because Japan has not retracted the trade restriction measure despite of repeated displays of our regret.

It is estimated that related industries in Japan including auto industry, which last year alone sold 35,191 automobiles, a value of 6.5 billion dollars, will be seriously damaged by the measure taken by China.

Especially, the auto industry urged Japanese government to resolve the incident because of that if China imposes the tariff on Japanese auto-parts as well, there would be an enormous damage to their auto-manufacturing factories in China.

Hiroshi Okuda, chairman of the Japan Automobile Manufacturers Association and also chairman of Toyota Motor Corp said, `Japan and China should withdraw the measures and make efforts to reach a solution through diplomatic channels.``

Since Chine is expected to join the World Trade Organization (WTO) within this year, Japanese government plans to resolve the matter by negotiating with China in accordance with the WTO rules.

Lee Young-Ee yes202@donga.com