Dive Brief:
- To curb the amount of U.S. frozen beef imports, Japan has raised the tariff from 38.5% to 50%, according to Food Manufacturing. The “safeguard” tariffs can be enforced when imports rise more than 17% year-to-year in any quarter.
- The higher tariff is a temporary measure because U.S. frozen beef imports have exceeded the quota set by Japanese law. It will remain in effect through March 31, 2018.
- The measure is being put in place to protect Japan’s beef farmers — known especially for their high-end Kobe beef — from less pricey foreign competition. The higher tariff only affects exporters from countries that don’t have free trade agreements with Japan, according to Meat + Poultry.
Dive Insight:
The U.S. beef industry barely finished cheering the recent reopening of beef exports to China before it was dealt another blow — this time in the form of rising tariffs from Japan. The move imposed by the Japanese government could zero out any progress recently made in frozen beef exports.
“I am concerned that an increase in Japan’s tariff on frozen beef imports will impede U.S. beef sales and is likely to increase the United States’ overall trade deficit with Japan. This would harm our important bilateral trade relationship with Japan on agricultural products,” U.S. Secretary of Agriculture Sonny Perdue said in a statement. “It would also negatively affect Japanese consumers by raising prices and limiting their access to high-quality U.S. frozen beef.”
About 10 other countries, including Australia, which is the biggest rival of U.S. beef exporters in Japan, have maintained better terms with Japan through their participation in the Trans-Pacific Partnership, according to Food Manufacturing. The U.S. pulled out of the TPP shortly after President Trump took office, and now seems to be paying the price. Australian beef, which makes up about 55% of Japan’s frozen beef imports versus the United States' 35%, stands to benefit while U.S. beef producers suffer because of higher tariffs.
Japan was the top beef export market for the U.S., with volume totaling $1.5 billion last year, reports Meat + Poultry. Implications for U.S. farmers and beef producers, therefore, can be sizeable. “[The U.S. Meat Export Federation] will work with its partners in Japan to mitigate the impact of the safeguard as much as possible,” USMEF President and CEO Philip Seng said in a statement. “We will also continue to pursue all opportunities to address the safeguard situation by encouraging the U.S. and Japanese governments to reach a mutually beneficial resolution to this issue.”