By Tamiyuki Kihara and Kantaro Komiya
TOKYO, Feb 24 (Reuters) - Japan said on Tuesday it had asked the United States to ensure its treatment under a new tariff regime would be as favourable as in an existing agreement, treading carefully to avoid rocking the boat before the prime minister's visit to the U.S. next month.
While U.S. President Donald Trump's latest measures could increase the tariff cost for some Japanese export items, Japan's trade minister and U.S. Commerce Secretary Howard Lutnick
affirmed on a call on Monday that the two countries would implement the trade deal struck last year "in good faith and without delay," the Japanese trade ministry said.
Trump, following the U.S. Supreme Court's decision on Friday to strike down his tariffs under the International Emergency Economic Powers Act (IEEPA), applied a temporary 15% duty on imports from all countries, the maximum allowed under a law that is separate from the IEEPA.
Trump also warned countries that if they backed away from their trade deals with the U.S., he would hit them with higher duties under different trade laws.
Trade minister Ryosei Akazawa told a Tuesday briefing that some Japanese exports, which are currently subject to reduced tariffs under the deal, may face higher levies, should the new tariffs be "stacked" upon the existing levies. A trade ministry official said items that could theoretically face higher tariffs under Trump's new policy were those that enjoyed tariffs lower than 15% under the most favoured nation status.
Japan requested treatment that is equally favourable to the trade deal that was agreed last year, Akazawa added.
In July, the U.S. and Japan agreed a deal to cut tariffs on autos and other goods to 15%, while Japan agreed to a $550 billion package of U.S.-bound loans and investment.
Akazawa and other officials refrained from commenting on the U.S. Supreme Court decision, only saying they would closely examine its details.
Yoshinobu Tsutsui, head of Japan's biggest business lobby Keidanren, told reporters that the U.S. court ruling "proved checks and balances are in effect" and was "positive for the economy overall", but he added that Trump's new tariffs increased risks for corporate investments, according to the Yomiuri newspaper.
JAPAN FINANCING U.S. PROJECTS
If the U.S. does not implement permanent tariffs to replace the IEEPA-based levies, that would boost Japan's real gross domestic product by 0.375% annually, according to an estimate by Nomura Research Institute economist Takahide Kiuchi.
The two countries last week unveiled the first three U.S. projects - valued at $36 billion - to be financed by Japan, including an oil export facility, an industrial diamonds plant and a gas power plant.
"It's not that Japan was forced into a loss-making agreement," Akazawa said, adding that the tariffs-and-investment agreement is a "win-win deal" amid shared economic security threats such as dependency on Chinese rare earths. He said he has no plans to visit the U.S. for more trade talks.
Japanese government sources familiar with the matter said Tokyo will not seek to review the agreement for fear of provoking Trump into applying harsher sector-specific tariffs that are unaffected by the Supreme Court ruling on the IEEPA, particularly on the all-important auto industry.
Ahead of Prime Minister Sanae Takaichi's visit to Washington in late March, which Tokyo deems crucial to its security amid concerns such as China's export controls, Japan will carry on with the existing deal to retain stable ties with the U.S., they said.
(Reporting by Tamiyuki Kihara, Yoshifumi Takemoto, Kantaro Komiya, Mariko Katsumura, Chang-Ran Kim; Additional reporting by Makiko Yamazaki and Anton Bridge; Editing by Christopher Cushing, Thomas Derpinghaus and Kate Mayberry)
