The U.S. and Japan have reached a deal that would make it less likely that the Japanese safeguard trigger will boost tariffs on U.S. beef, as it has done in the past.
Instead of just one trade-volume trigger that raises the tariff on U.S. beef that is in place now, there will be three separate safeguards that need to be set off, and that’s expected to lower the chances that U.S. exporters will be impacted.
The second safeguard trigger being added to the deal stipulates the tariff on U.S. beef cannot go up unless the aggregate beef volume trigger level for all of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership countries is also breached in the Japanese April-March fiscal year. The third condition is that U.S. beef exports to Japan in any year must exceed the amount of exports in the previous year.
The U.S.-Japan Trade Agreement that went into effect in 2020 reduced the likelihood of Japan’s beef safeguard trigger being set off by applying it to a yearly basis instead of a quarterly basis, but that wasn’t enough to prevent a trade disruption.
U.S. beef exports had surpassed the Japanese safeguard trigger of 242,000 metric tons by Mar. 10 last year and Japan raised its tariff on U.S. beef from 25.8% to 38.5% for 30 days to slow down trade and protect Japan’s domestic producers. The preferential Japanese tariff has since dropped to 25%.
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Still, the fact that the higher tariff rate was triggered spurred sharp concern from the U.S., and negotiations started almost immediately to alter the safeguard trigger system.
“This new three-trigger safeguard mechanism will allow American farmers and ranchers to meet Japan’s growing demand for high-quality U.S. beef and will also reduce the probability that Japan will impose higher tariffs on U.S. beef in the future,” a senior USTR official told reporters.
U.S. beef exports to Japan are strong again this year, but the USTR official said Japan’s safeguard trigger isn’t expected to be hit as a result.
The U.S. exported about $182 million worth of beef to Japan — roughly 23,000 tons — in January, a 4% increase from the same month in 2021, according to the U.S. Meat Export Federation.
It’s unclear when the new safeguard measures will be implemented; Japan’s parliament must first approve them.
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