Affiliates of Japanese firms sue Washington over tariffs

Recent moves by the US affiliates of several Japanese companies to sue the United States government for refunds on the additional tariffs they paid this year could set a precedent for Asia-Pacific corporations facing similar costs, analysts say.

The complaints were filed with the US Court of International Trade in New York by affiliates of Toyota Tsusho, Sumitomo Chemical, Ricoh, Yokohama Rubber and five other firms. The plaintiffs are seeking a full refund of the tariffs should the US Supreme Court rule in similar cases that the "reciprocal tariffs" imposed by President Donald Trump's administration are illegal.

The nine Japanese companies joined a growing list of corporations — including US retailer Costco and cosmetics maker Revlon — in challenging the legality of such tariffs.

James Chin, a professor of Asian Studies at the University of Tasmania in Australia, said these companies are awaiting the Supreme Court's decision, predicting that more cases will be filed once the court releases its ruling.

Julia Roknifard, a senior lecturer at the School of Law and Governance at Taylor's University in Malaysia, said the tariffs are "controversial" even in the US, highlighting criticism over their impact on relations with US allies.

The tariffs "may also not be completely legal and are seen to be an abuse of power and processes", Roknifard said, noting that the plaintiffs "certainly have a case" and that others are likely to follow if they prevail.

Decline in GDP

The Asian Development Bank has forecast that regional GDP for developing Asia and the Pacific will slow to 4.8 percent this year, compared with 5.1 percent last year, on the back of higher US tariffs and elevated trade uncertainty.

The US Court of International Trade ruled in May that the International Emergency Economic Powers Act — which Trump had earlier cited to justify the tariffs — does not give the US president the legal authority to impose these tariffs. The US Court of Appeals upheld this decision on Aug 29.

However, the tariffs remain in effect because the Trump administration has appealed the case to the Supreme Court, which held oral arguments last month and is deliberating.

Alicia Garcia-Herrero, chief economist for Asia-Pacific at the French investment bank Natixis, said she was not surprised that the Japanese companies filed complaints against the US government, especially since the case has been elevated to the US Supreme Court.

"Japanese companies have a lot to lose, because if they want to continue to export into the US, they have to lower their prices," she said.