Published: Sat, July 29, 2017
Finance | By Kristine Clayton

Japan Slaps Emergency Tariffs On Imports Of Frozen US Beef

Japan Slaps Emergency Tariffs On Imports Of Frozen US Beef

Japan's decision to hike tariffs on frozen beef imports from the United States could disrupt sales and harm trade relations between the two countries, U.S. Agriculture Secretary Sonny Perdue said on Friday.

Japanese Finance Minister Taro Aso told reporters the government has been contacting affected nations such as the United States to explain the increase, Kyodo news agency said.

Tariffs on frozen beef will jump to 50% from the current 38.5% between August 1 and the end of March next year, as a "safeguard" mechanism to protect domestic farmers is being triggered, the ministry said in a statement.

Under World Trade Organisation rules, Japan can introduce safeguard tariffs when imports grow more than 17 per cent in a quarter on a year-on-year basis. "Japan is the top export market for USA beef in both volume and value, and anything that restricts our sales to Japan will have a negative impact on America's ranching families and our Japanese consumers".

The expected ample US beef supplies could mean export prices fall to compensate for the increased tariffs or demand could switch to chilled beef imports. The duty on US frozen beef imports, effective August 1, 2017 through March 31, 2018, will be 50% while the duty on Australian beef will remain at the current rate of 27.2%, as established in the Japan-Australia Economic Partnership Agreement (JAEPA).

Soon after his inauguration in January, President Donald Trump withdrew the United States from the Trans-Pacific Partnership, a pending regional FTA that, once implemented with U.S. participation, would have reduced Japan's 38.5 per cent tariff on fresh and frozen beef cuts to 9 per cent over 16 years. "This would harm our important bilateral trade relationship with Japan on agricultural products". The duty increases from 38.5% to 50% when imports exceed the safeguard volume.

For the period January-May this year, total USA beef exports to Japan were valued at $731 million, up 32% from the same period in 2016, the same data showed.

US farmers had been hoping for wider access to Japan's lucrative market through a Pacific Rim trade initiative, the Trans-Pacific Partnership.

National Cattlemen's Beef Association (NCBA) president Craig Uden expressed disappointment in the tariff increase and encouraged USA government officials to pursue a bilateral agreement with Japan.

Trade terms Japan negotiated with the 10 other remaining members of the TPP remain in force.

Like this: