Japan Threatens United States With Tariffs
United States President Donald Trump announced on May 23 that the U.S. Commerce Department is considering a 25 percent tariff on auto imports. This is in addition to the 25 percent tariff on steel imports and the 10 percent tariff on aluminum, which were announced in March. Also this week, Japan joined U.S. trading partners who are threatening to retaliate against the American import taxes. Their proposed retaliatory tariffs on U.S. exports would add up to about $3.5 billion every year. That’s not a huge amount, where global trade is concerned, but the fear is that this is just one step on the road to trade war.
Japan was the only major American ally who wasn’t granted a temporary exemption from the U.S. tariffs—the European Union, Mexico and Canada were all let off. However, most of those exemptions expire next month, which leaves all of these nations in the same boat.
To justify the tariffs, the U.S. is using Section 232 of the Trade Expansion Act of 1962, which discusses the “effect of imports on the national security.” However, the nations affected by the tariffs argue that they aren’t legal under World Trade Organization (wto) rules. An original member of the North American Free Trade Agreement (nafta) negotiating team, Luis de la Calle, told the Financial Times: “Using Section 232 against steel and aluminum was already a stretch, a violation of the World Trade Organization, and against the spirit and the letter of the law. Using it against autos would be preposterous.” He argued that the “national security exemption is a privilege to use in case of war,” and that in this case, it has more to do with “national politics” than national security.
Reactions to the tariffs have been negative around the world. Even traditional American allies are fighting back. French President Emmanuel Macron came out especially strong right after the steel and aluminum tariffs were approved: “As a matter of principle, we will talk about everything with a friendly country that respects wto rules. But, by the same principle, we won’t talk about anything while there’s a gun pointed at our head.”
Japan’s minister of economy, trade and industry, Hiroshige Seko, called the U.S. tariffs “extremely regrettable” and said they might “throw the global market into confusion.”
Japan, Russia, Turkey, China, India and the EU have all threatened retaliatory tariffs. These tariffs would make up for the loss of revenue in the exporting countries. They are roughly equal to the impact that the U.S. tariffs would have on their exports. Some of the goods they are targeting may specifically hurt states that voted for President Trump in the election.
As a close U.S. ally, Japan’s retaliation is perhaps the most surprising. It told the wto last week that it could impose $451 million in tariffs on U.S. goods. However, it stopped short of saying that it definitely would enact the tariffs. Jeffrey Wilson, a research fellow at the University of Western Australia, told the New York Times, “This is Japan basically readying itself for a trade war.”
Some experts are criticizing the American tariffs as “flagrant protectionism.” But the U.S. thinks it is justified after years of America having lower import taxes on most goods than other nations have. President Trump hopes that it will stimulate the nation to rebuild its dying industrial sector. Most of our production facilities are overseas, which poses a problem if America ever goes to war. Former trade adviser to the Trump campaign Dan DiMicco said, “What was it that gave us the ability to outmaneuver Germany and Japan [in World War ii]? It was our auto industry. It was our industrial might. Everything was here.”
That’s not the case anymore. The U.S. is the world’s largest steel importer. China produces about as much steel in a month as the U.S. does in an entire year. China produced almost half of the world’s steel in 2017—49.2 percent. America produced only 4.8 percent, behind China, the EU, Japan and India. In 2017, the U.S. imported more than 5 million metric tons of aluminum. It exported only 315,000 metric tons. Overall, the U.S. is the third-largest exporter in the world, behind China and the EU. Germany is close to passing it—exporting $1.4 billion compared to the U.S.’s $1.5 billion.
This is a concerning trend for a nation that was once the undisputed leader in manufacturing, production and exports. American influence is declining in more ways than one.
The general consensus in the media is that trade war is beginning. America just got the ball rolling. Former U.S. trade negotiator Jennifer Hillman told the Financial Times, “If you do this, then everybody else in the world is going to go down the same road.”
But do these tariffs mean the U.S. is actually starting a trade war? Richard Palmer wrote in the May 2018 Trumpet:
The consensus is that America is about to launch a war that could escalate dangerously. America puts up some tariffs, Europe and China retaliate, America retaliates against their retaliation—and soon, trade barriers are up everywhere, stopping trade and sending prices soaring. This leads to skyrocketing unemployment, economic depression and political upheaval.
Such a future is plausible. But is it caused by America senselessly upsetting global trade?
No. In fact, America is the most pro-trade advanced economy. America imposes only half the level of tariffs that China does. The European Union slaps 10 percent tariffs on U.S.-made cars and foodstuffs—while the U.S. imposes only tiny tariffs in exchange.
The EU and China have been attacking the United States economically for years. America is the victim of a trade beatdown. Donald Trump is only “starting a trade war” in the sense that he is fighting back.
The Bible does predict a trade war in these end times—an alliance of the world against America. Isiaah 22 speaks of a “mart of nations” including China, Japan and German-led Europe. These nations will be allied together briefly in an economic super-alliance. America will not be part of it.
Trumpet managing editor Brad Macdonald wrote in his article “Trade Wars Have Begun,” “Notice too: America and Britain are not part of this ‘mart of nations.’ Why not? Because this trade emporium is a rival of the U.S. and Britain. It is infused with strong anti-American and anti-British sentiment. This ‘mart of nations’ exists to compete with America and Britain!”
Trumpet editor in chief Gerald Flurry writes in Isaiah’s End-Time Vision, ”[W]e believe there may be a brief alliance between the German-led Holy Roman Empire and certain Asian powers (Russia, China, Japan—the kings of the east),” which Mr. Flurry calls a “dynamic market of nations.”
The Bible also prophesies that end-time Israel will be “besiege[d] … in all thy gates” (Deuteronomy 28:52). Ezekiel 5 talks about the terrifying results of this siege. Mr. Flurry writes in Ezekiel: The End-Time Prophet, “The U.S. and other Israelite nations are surrounded or besieged by fierce and often unfair competition.
“The United States and Britain are going to be left out in the cold as two gigantic trade blocs, Europe and Asia, mesh together and begin calling the shots in world commerce. These nations of Israel are going to be literally besieged—economically frozen out of world trade!”
As Mr. Macdonald concluded in his article, trade war has already begun! These tariffs are symptoms of a trade war that started long before President Trump.