Japan has decided to maintain a suite of WTO-approved retaliatory tariffs on U.S. goods, including all types of bearings, for an additional year. The duties would have expired at the end of this month.

The retaliatory tariffs are due to the U.S. decision to wind down payments under the Continued Dumping and Subsidy Offset Act, rather than cut off payments after the legislation was repealed in October 2006.

As long ago as 2003, the World Trade Organization ruled CDSOA payouts to U.S. manufacturers were an illegal subsidy, but the U.S. did not repeal the CDSOA for another three years. By failing to stop the CDSOA program, the WTO found the U.S. willfully disregarded the trade laws and approved retaliatory tariffs by countries hit by U.S. tariffs.

Among the most contentious tariffs distributed by the CDSOA have been the results of levies on bearings from Japan -- so Japan has taken the opportunity to add its own retaliatory tariffs on bearings from the United States. While a number of countries apply WTO-approved tariffs on U.S. goods, Japan is the only country with retaliatory tariffs on U.S. bearings.

The WTO allows Japan to boost tariffs up to 15% on certain goods, and Japan has chosen 15 products from bearings to steel products to aircraft parts and printers. Under WTO rules, Japan must limit its levies on bearings to no more than $81 million.

But because U.S. payouts to bearing manufacturers under the CDSOA have dropped since the law was repealed, Japan has said this year it will lower the punitive tariffs to just 10.6%.

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