U.S. beef exports to Japan have been so strong that they set off a “safeguard trigger” designed to protect domestic producers by increasing the country’s tariff level.
As of March 10, U.S. beef exports to Japan totaled 242,229 metric tons since the beginning of the Japanese fiscal year (April 1, 2020), according to USDA data. The trigger level is 242,000 tons, and because it was passed, that means the Japanese tariff rose from 25.8% to 38.5% for 30 days, beginning Thursday, said Joe Schuele, a spokesman for the U.S. Meat Export Federation.
The higher tariff rate will be in place for 30 days, putting U.S. exporters at a disadvantage to other foreign suppliers in countries like Australia.
But U.S. producers and exporters have been expecting the safeguard trigger to be hit for months as U.S. beef shipments to Japan continued to rise.
“We’ve been anticipating this,” said Kent Bacus, director of international trade and market access for the National Cattlemen’s Beef Association. “The fact that the safeguard has been triggered shows that U.S. beef is in very strong demand in Japan.”
Japan’s safeguard trigger used to be applied on a quarterly basis, but U.S. negotiators succeeded in getting the country to change that to yearly in order to reduce the risk of trade disruptions. It was just one of the provisions in the U.S.-Japan Trade Agreement that went into effect about a year ago.
“For us in the cattle industry – for our beef exports – it is a slight setback because we’ll see that tariff go up to 38.5% for 30 days, but afterwards we’re going to see that tariff go down to 25% and that will put us on par with our competitors in our number-one export market,” Bacus told Agri-Pulse.
The Japanese tariff was set to drop from 25.8% to 25% on April 1 under a provision of the U.S.-Japan trade pact, but that won’t happen until April 17 because of the delay caused by the safeguard trigger.
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That date could come even sooner, though. The safeguard trigger also activates a clause in the JTA that requires both countries to enter into consultations and U.S. industry representatives are hopeful those talks could result in better trade terms.
The U.S. Meat Export Federation released a statement Thursday saying that it “encourages the two governments to engage in such consultations and make appropriate adjustments to the safeguard threshold. This will help U.S. beef remain on a level tariff playing field in Japan, subject to the same rates as competitors' products, and create a more reasonable and predictable pricing environment for Japanese importers and consumers.”
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