seems that foreign entry into the domestic steel market was prevented by virtue of the closed nature of the Japanese distribution system.
Recently, the case of semiconductors attracted worldwide attention because of the hot dispute between the United States and Japan. The Japanese government explicitly targeted the semiconductor industry for development in the early 1970s through tariffs and import restrictions, though tax incentives played a minor role. In the mid-1970s, these protective measures were formally abolished. U.S. semiconductors, however, still could not enter the Japanese market. At the same time, Japan began to export semiconductors in substantial quantities to the United States. By the end of the 1970s, Japan had established itself as the dominant player in the semiconductor industry, especially in new products. 10
In summarizing the Japanese case for trade policy and industrial policy in the postwar period, we can say that tax incentives were not major instruments in the promotion of exports and could not have been very effective. Nevertheless, with the aid of tariffs, import restrictions, and the low cost of financing, trade and industrial policy as a whole achieved its objectives rather satisfactorily.
I am grateful to Professor John Riew for his helpful suggestions.