In cold blow to US, Japan ups tariffs on frozen beef imports

Posted July 29, 2017

Japan announced today that some frozen beef imported to the country from the U.S will now be subject to a temporary 50 percent tariff.

Japan's deputy prime minister Taro Aso said that he is ready to discuss the emergency measure at an economic dialogue with U.S. Vice President Mike Pence scheduled later this year.

Tariffs on frozen beef from the affected regions will be raised from the current 38.5 percent to 50 percent from August 1, 2017 to March 31, 2018, according to the government.

According to figures from the U.S. Department of Agriculture, the U.S. supplies around 35%, though U.S. beef exports to Japan have risen recently as prices fell after the livestock sector recovered from years of drought.

The US is the second-largest supplier of frozen beef to Japan after Australia, however, the free trade agreement between Japan and Australia exempts Australian beef from the emergency measure.

In April-June, Japan's first fiscal quarter, frozen beef imports from all nations totalled 89,253 tonnes, up 17.1% from a year ago, and imports from non-EPA nations reached 37,823 tonnes, up almost 25%, government data showed.

Farm minister Yuji Yamamoto also said he hopes to "explain to the U.S. carefully".

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.

U.S. Secretary of Agriculture Sonny Perdue says he's concerned this increase in Japan's tariffs will affect U.S. beef sales with the country. It is the first time in 14 years that Japan has taken the emergency measures on USA beef imports, a decision likely to irk Washington. "This would harm our important bilateral trade relationship with Japan on agricultural products".

No safeguard or increase will be triggered for chilled beef imports as the volumes did not exceed the required level.

"Conditions have changed since the quarterly safeguards were established in 1994, and the growth in Japan's imports this year has not adversely impacted Japan's domestic beef producers", USMEF said. The framework was to be scrapped under the Trans-Pacific Partnership, a proposed 12-nation trade deal that included the USA and Japan, but Mr. Trump pulled the US out of the TPP before it went into effect.

USA farmers had been hoping for wider access to Japan's lucrative market through a Pacific Rim trade initiative, the Trans-Pacific Partnership. "Prices for wagyu carcasses and wagyu feeder cattle are down from the record highs of a year ago, but are otherwise the highest in recent history".