WASHINGTON, July 28, 2017 – Japanese purchases of U.S. beef are about to be subject to a 50 percent tariff after imports in the three-month period ended June 30 triggered a “safeguard” mechanism.
According to Japanese government reports, imports of frozen beef from the U.S. and other countries in Japan’s fiscal first quarter exceeded the amount required to trigger Japan’s safeguard mechanism, as agreed to in the 1994 Uruguay Round World Trade Organization agreement. The U.S. Meat Export Federation said the limit was exceeded by just 113 metric tons.
As a result, tariff rates will jump from 38.5 percent to 50 percent for the rest of the fiscal year ending March 31, 2018.
U.S. officials say this tariff increase will be detrimental to almost everyone involved.
“Nobody wins in this situation,” Craig Uden, president of the National Cattlemen’s Beef Association, said in a statement. “Japan is the top export market for U.S. 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.”
“It will be especially difficult for the gyudon beef-bowl restaurants that rely heavily on Choice U.S. short plate as a primary ingredient,” added USMEF President and CEO Philip Seng. “This sector endured a tremendous setback when U.S. beef was absent from the Japanese market due to BSE (bovine spongiform encephalopathy, or mad cow disease), and was finally enjoying robust growth due to greater availability of U.S. beef and strong consumer demand.”
A further source of consternation for U.S. exporters will be a wider tariff advantage enjoyed by Australia, which has a free trade agreement with Japan. Tariff disparity with Australia was a major talking point in the beef industry’s push for approval of the Trans-Pacific Partnership, from which the U.S. withdrew earlier this year. Now, Australian beef exports to Japan will be assessed a tariff of 27.2 percent, a difference of almost 23 percent.
Japan was the top export market for U.S. beef in 2016, purchasing about $1.5 billion worth of product. According to USMEF figures, the dollar value of U.S. beef exports to Japan increased about 42 percent in the first three months of 2017, compared with the year-earlier quarter.
Other countries, including Canada and New Zealand, that do not have trade agreements with Japan will also be subject to the tariff hike.
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