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Supply Chain

US, Japan Strike Deal To Lower Chances Of Higher Japanese Duties On Beef

The United States and Japan on Thursday announced an agreement that will allow American farmers and ranchers to meet Japan's growing demand for US beef, and lowers the chances of Japan imposing higher tariffs in future, US officials said.

The agreement includes a new mechanism that requires three separate conditions to be reached - instead of just one - in order for Japan to invoke a 'safeguard trigger' and slap higher duties on US beef for 30 days.

"This agreement is a great win for our two countries that ensures American farmers and ranchers can continue to meet Japan’s growing demand for high-quality US beef," US Trade Representative Katherine Tai said in a statement.

The agreement, reached after a year of consultations between the two countries, will enter into force once the text is finalised, and each country has completed a few remaining steps, a senior US official said.

Growth In Beef Exports

US Agriculture Secretary Tom Vilsack welcomed the agreement and said it would allow for greater market-based growth in US beef exports to Japan.

In 2021, the United States was the top beef exporting country in the world, with global sales of beef and beef products valued at more than $10 billion, according to US data.

Exports of US beef to Japan totalled almost $2.4 billion in 2021.

US meat producers had pushed for an adjustment to the thresholds, arguing that US beef was at a competitive disadvantage to exporters who are members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

Read More: Japanese Scientists Create Lab-Grown Wagyu Beef

'Safeguard' Duty On US Beef

Japan raised its 'safeguard' duty on US beef to 38.5% from 25.8% in March 2021 for 30 days, after US beef imports reached 253,051 metric tonnes, exceeding the 242,000 metric ton trigger level. Demand for US beef had risen in that period as a drought slowed imports from Australia.

US beef is currently entering Japan at the normal 25% duty level negotiated in the agreement for Japan's fiscal year 2021, which ends on 31 March, and no higher temporary duties were expected in the current fiscal year, the senior official said.

The three-trigger system removes uncertainty for US exporters even if there are shifts in market availability from various countries during a given year, a senior official said.

News by Reuters, edited by ESM – your source for the latest supply chain news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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