This is a guest post from Yoshimichi Ishikawa, Associate Professor, University of Shizuoka, Japan
For decades, Japan has adhered to the principle that trade disputes should be addressed strictly within the WTO dispute settlement framework. This long-standing position may now be facing a turning point.
On April 2, 2025, the United States announced a new “reciprocal tariff” scheme. In response, China swiftly declared its intention to impose retaliatory tariffs, while the EU and Canada signaled they were exploring similar measures. In Japan, recent polls show that 57% of respondents support imposing retaliatory tariffs. Against this backdrop, a noteworthy exchange in Japan’s Diet may signal a legal shift in the country's traditional approach to trade disputes.
During a session of the Financial Affairs Committee of Japan’s House of Representatives on April 4, a member of the ruling party asked Finance Minister Katsunobu Kato whether Japan could legally impose retaliatory tariffs against the United States. Minister Kato replied:
“Speaking generally about our tariff system… given that parts of the WTO’s dispute settlement procedures are currently not functioning, we believe that—while seeking to resolve disputes through the WTO to the extent possible—it is legally possible to impose retaliatory tariffs as stipulated under the Customs Tariff Act.” (emphasis added; original in Japanese, spoken at around 13:20 in this Diet committee video)
This statement is striking. Under Article 6 of Japan’s Customs Tariff Act, the imposition of retaliatory tariffs in response to WTO violations is permitted only after the approval of the WTO Dispute Settlement Body is obtained. This domestic provision reflects Japan’s alignment with Article 23 of the WTO Dispute Settlement Understanding (DSU), which obliges Members to address covered agreement violations exclusively through the WTO dispute settlement system. In line with this approach, Japan has only once implemented retaliatory tariffs—against the United States in 2004 in response to the Byrd Amendment—following WTO authorization.
Given this legal and policy background, Minister Kato’s use of the phrase “to the extent possible” implies that Japan may now consider imposing retaliatory tariffs without prior WTO authorization if its dispute settlement system remains paralyzed. This would mark a notable departure from Japan’s traditional stance, which has emphasized resolving trade disputes within the WTO framework and implicitly excluded the application of countermeasures under general international law (such as those contemplated in the Articles on State Responsibility).
While the Finance Minister’s remarks are significant, Japan cannot actually impose retaliatory tariffs without amending the Customs Tariff Act. In the absence of such reform, the statement risks being seen—as some domestic media have already suggested—as a political message aimed at the United States, rather than a concrete policy move (Kyoto News report, in Japanese).
What will truly matter is whether Japan moves to revise the law in the near future. That would signal not only how seriously it is weighing retaliation against the U.S. reciprocal tariffs, but also whether it is rethinking what has long been interpreted as its position: that WTO violations must be addressed exclusively within the WTO, without recourse to general international law.
It is also worth noting that Prime Minister Shigeru Ishiba has repeatedly downplayed the likelihood of retaliatory tariffs, and that during a phone call on April 8, President Trump and Prime Minister Ishiba agreed to appoint ministers in charge of the issue and to begin tariff negotiations. Thus, the actual imposition of retaliatory tariffs appears unlikely for now. Still, from the standpoint of both negotiation leverage and legal preparedness, it may be strategically important for Japan to revise the relevant provisions of its Customs Tariff Act—potentially by incorporating language such as “to the extent possible,” as suggested by the Finance Minister. Doing so would allow Japan to maintain the legal flexibility to impose retaliatory tariffs even in the absence of prior WTO authorization, particularly in situations where the WTO dispute settlement system is not functioning.
