TOKYO (Reuters) - JFE Holdings Inc, parent of Japan’s No. 2 steelmaker, has seen no major impact on its exports so far from new U.S. import duties on steel, but still sees U.S. trade policy as the biggest risk for the Japanese economy, its president said.
“The biggest risk for the Japanese economy is ‘Trump risk’,” JFE President Eiji Hayashida told a news conference on Tuesday.
The administration of U.S. President Donald Trump imposed the higher import duties of 25 percent on steel in March, mainly aimed at curbing imports from China.
“His trade policy gives little direct impact on Japan but we see a risk of potential retaliation with protectionism by China or other countries possibly slowing the global economy,” Hayashida said.
Japanese steelmakers have said previously they expected little impact on exports from the U.S. tax as they mainly supply specialised products, although Japan’s steel exports to the U.S. market fell 38 percent in March from a year earlier, according to the Japan Iron and Steel Federation.
“Some semi-finished products from Japan may have been replaced by the products from the countries exempted from the U.S. duties, such as Brazil,” Hayashida said.
“But we continue to receive orders for high-end products as the U.S. customers can’t find alternatives.”
He expected clients to complain about the higher import prices and press for item exemptions.
The White House announced early this month that Trump had extended a temporary reprieve from the tariffs for the EU, Canada and Mexico until June 1, and had agreed permanent exemptions for Argentina, Australia and Brazil.
Hayashida also reiterated the company’s interest in India, where it’s partner JSW Steel has joined a group biding for bankrupt steelmaker Essar Steel India. JFE owns a 15 percent stake in JSW.
Asked if JFE would consider providing finance for the deal or look at taking a direct stake in Essar if JSW succeeded in it bid, Hayashida said: “If JSW becomes a buyer of Essar, we may have to consider doing something, but it’s too early to comment on any concrete measure.
“India is very attractive as a production base and as a market. We have a great interest in India,” he added.
Reporting by Yuka Obayashi; Editing by Tom Hogue and Richard Pullin