By Aaron Sheldrick
TOKYO (Reuters) - Major Asian nations reacted sharply on Friday to U.S. President Donald Trump's decision to impose tariffs on steel and aluminium imports, warning of damage to relations amid industry calls for retaliation.
Japan said the move would have a "big impact" on the countries' close bilateral ties, while China said it was "resolutely opposed" to the decision and South Korea said it may file a complaint to the World Trade Organization.
Trump on Thursday pressed ahead with the imposition of 25 percent tariffs on steel imports and 10 percent for aluminium on Thursday, though he announced exemptions for Canada and Mexico, and said exceptions could also be made for other allies.
China, which produces half the world's steel, will assess any damage caused by the U.S. move and "firmly defend its legitimate rights and interests," the country's Ministry of Commerce said.
The tariffs would "seriously impact the normal order of international trade," the ministry said.
Trade tensions between China and United States have risen since Trump took office. China accounts for only a small fraction of U.S. steel imports, but its massive industrial expansion has helped create a global glut of steel that has driven down prices.
It was the most explicit threat yet from the country in an escalating trade spat.
The dispute has fuelled concerns that soybeans, the United States' most valuable export to the world's second largest economy, might be caught up in the trade actions after Beijing launched a probe into imports of U.S. sorghum, a grain used in animal feed and liquor.
Trump's declaration coincided with the signing by 11 countries of a new Trans-Pacific trade pact that the United States withdrew from last year.
The announcement underlines concerns about rising U.S. protectionism and the latest tariffs offset the positive impact from plans also announced overnight for Trump to meet with North Korea's Kim Jong Un that raised hopes of ending a standoff over North Korea's nuclear weapons programme, said Kwon Young-sun, an economist at Nomura Securities.
While carrying a message to Washington to push forward a diplomatic breakthrough over North Korea, South Korea's national security office chief Chung Eui-yong requested U.S. officials to support South Korea's request for a waiver on the steel tariffs, a South Korean presidential spokesman said.
Trump in January ordered tariffs on solar panels and washing machines imports to the United States.
Exports of these products and steel and aluminium make up less than 1 percent of South Korea's total exports, Young-sun said.
The official said ways had to be found to address steel overcapacity in China as South Korea was the top importer of Chinese steel, although shipments from China were 21 percent down in 2017 from the previous year.
He said the United States has raised concerns over South Korea's "transshipment" of Chinese steel, although the trade ministry has argued that only 2.4 percent of steel exported to the U.S. uses Chinese material.
In Sydney, Prime Minister Malcolm Turnbull sounded confident of getting favourable treatment as Trump spoke of Washington's strong relationship with Australia, a major exporter of iron ore but exports little steel and the United States was not a major customer.
India's steel ministry said in a note to the trade ministry last month that U.S. import tariffs were expected to lead to a loss of $130 million in exports which were expected to total 333,656 tonnes for the year ending on March 31.
European Union Trade Commissioner Cecilia Malmstrom will host her U.S. and Japanese counterparts in Brussels on Saturday to discuss steel overcapacity as part of talks that begin in December at a World Trade Organization meeting in Buenos Aires.
Chinese steel futures slumped to their weakest level since November.
(Reporting by Adam Jourdan and Wang Jing in SHANGHAI, Yuka Obayashi, Kaori Kaneko and Ami Miyazaki in TOKYO, Ju-Min Park, Hyunjoo Jin and Cynthia Kim in SEOUL; writing by Aaron Sheldrick; editing by Simon Cameron-Moore)
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