Tariffs on Japan’s frozen beef imports will rise to 50% from the current rate of 38.5% between 1 August 2017 and 31 March 2018.
This has happened because enough frozen been has been imported by Japan this year to trigger the country’s safeguard mechanism which will see it raise tariffs on imports from the US and others.
The tariff will only affect exporters from countries, including the US, that do not have free trade agreements with Japan. Imports of chilled beef will also not be affected by tariffs.
US government sounds warning
This move is expected to tip the balance of power further in favour of Australia, which has a better trading agreement than the US – its key beef export competitor in Japan.
US Agriculture Secretary Sonny Perdue warned that the tariff increase will hurt US cattle ranchers and raise prices for Japanese consumers.
“I am concerned that an increase in Japan’s tariff on frozen beef imports will impede US beef sales and is likely to increase the United States’ overall trade deficit with Japan,” said Perdue. “This would harm our important bilateral trade relationship with Japan on agricultural products. It would also negatively affect Japanese consumers by raising prices and limiting their access to high quality US frozen beef. I have asked representatives of the Japanese government directly and clearly to make every effort to address these strong concerns, and the harm that could result to both American producers and Japanese consumers.”
In response to the tariff hike, the CEO of the US Meat Export Federation (USMEF) Philip Seng, said the decision will have a “negative” impact on beef trade. According to USMEF figures, the Japanese market for US beef was worth $1.5 billion in 2016 and first quarter sales in 2017 rose 42% year-on-year.
“USMEF recognises that the safeguard will not only have negative implications for US beef producers, but will also have a significant impact on the Japanese foodservice industry,” Seng said.
“It will be especially difficult for the gyudon beef bowl restaurants that rely heavily on US short plate as a primary ingredient. This sector endured a tremendous setback when US beef was absent from the Japanese market due to bovine spongiform encephalopathy, and was finally enjoying robust growth due to greater availability of US beef and strong consumer demand.
“USMEF will work with its partners in Japan to mitigate the impact of the safeguard as much as possible. We will also continue to pursue all opportunities to address the safeguard situation by encouraging the US and Japanese governments to reach a mutually beneficial resolution to this issue.”
National Cattlemen’s Beef Association (NCBA) president Craig Uden also expressed his disappointment. “Japan is the top export market for US 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. NCBA opposes artificial barriers like these because they unfairly distort the market and punish both producers and consumers. Nobody wins in this situation. Our producers lose access, and beef becomes a lot more expensive for Japanese consumers.