Japan to impose emergency tariffs on US frozen beef

TOKYO, July 29, (Agencies): Japan will raise tariffs on frozen beef from the United States and other countries from next month as an emergency measure due to increasing shipments, the government said Friday.

Tariffs will be raised to 50 percent from the current 38.5 percent on frozen beef from the US, Canada and New Zealand until March next year, according to the finance ministry.

Japan introduces emergency tariffs under the rules of the World Trade Organization (WTO) when the volume of imports grows more than 17 percent on year on a quarterly basis.

The move comes as President Donald Trump, who has vowed to pursue an “America First” trade policy, has urged Japan to increase agricultural imports from the US.

“This measure is automatically imposed,” Finance Minister Taro Aso told reporters, according to public broadcaster NHK.

“We’ll explain (it) to the US during Japan-US economic dialogue and other occasions,” he said, referring to high-level talks with Vice President Mike Pence expected later this year.

Farm minister Yuji Yamamoto also said he hopes to “explain to the US carefully.”

The head of the US Meat Export Federation said in a statement on its website that the move will have “negative implications for US beef producers.”

“(It) will also have a significant impact on the Japanese food service industry,” said president and CEO Philip Seng.

“It will be especially difficult for the gyudon beef bowl restaurants,” he said, referring to a popular Japanese beef-on-rice dish.

Japan’s decision to hike tariffs on frozen beef imports from the United States could disrupt sales and harm trade relations between the two countries, US Agriculture Secretary Sonny Perdue said on Friday.

“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,” Perdue said in a statement. “This would harm our important bilateral trade relationship with Japan on agricultural products.”

The tariff hike is a “safeguard” mechanism to protect domestic farmers, Japan’s ministry said. It is the first time it has been used since 2003.

Japan is the top destination for US chilled and frozen beef, with trade valued at $581 million this year through May. Exports of chilled beef from the United States to Japan totaled 57,970 tonnes during that period and frozen beef exports were 44,760 tonnes — valued at $414.4 million and $166.7 million, respectively, according to US Meat Export Federation data.

Tyson Foods Inc, the largest meat processor in the United States, said on Friday it supported US government efforts to address the issue with Japan.

The tariff hike comes as the US beef industry is expecting an increase in supplies, according to two recent US Department of Agriculture reports.

“US beef needs all the demand it can get,” said John Nalivka, president of industry research firm Sterling Marketing.

The expected ample US beef supplies could mean export prices fall to compensate for the increased tariffs or demand could switch to chilled beef imports.

Among the countries not affected by the tariff increase are Australia and Mexico because they have economic partnership agreements with Japan.

Australia could still struggle to win market share as its prices remain high because of a drought that has cut cattle numbers, said Nalivka, who added that a weaker US dollar could help offset the tariff increase.