OMAHA (DTN) -- In what may be one of the first consequences to the U.S. for backing out of the Trans Pacific Partnership, Japan this week announced an automatic tariff rate increase on imports of frozen beef from the U.S.
An increase from 38.5% to 50% will begin on Aug. 1 and last through March 31, 2018. According to USDA, the tariff hits only exporters from countries including the U.S. that do not have free-trade agreements with Japan.
The Japanese government announced that, as a result of rising frozen beef imports during the first quarter, a safeguard was triggered in the World Trade Organization on frozen beef from the U.S.
DTN Livestock Analyst John Harrington said the move by the Japanese should put U.S. trade negotiators on notice.
"Most of our shipments are chilled and not frozen, but any tariff hike is not good news," Harrington said. "The bigger story in terms of potential hurt is Japan's new FTA (free-trade agreement) with the EU and the lower tariffs afforded to our EU competitors. The missing TPP is becoming more and more obvious. U.S. negotiators need to get with the program if the strategy is to junk TPP and deal with Japan directly."
U.S. Secretary of Agriculture Sonny Perdue said he's concerned Japan's action will harm future bilateral agreements with Japan.
"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," he said in a statement on Friday.
"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 U.S. frozen beef," Perdue said. "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."
U.S. beef and beef product exports to Japan totaled $1.5 billion last year, according to USDA, making it the top U.S. market.
When President Donald Trump decided to back out of the TPP, agriculture interest groups immediately began pressing the administration to work on a bilateral trade agreement with Japan.
National Cattlemen's Beef Association President Craig Uden said the president and Congress need to move on such an agreement in light of the latest news.
"We're very disappointed to learn that the tariff on frozen beef imports to Japan will increase from 38.5% to 50% until April 2018," Uden said.
"Japan is the top export market for U.S. 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."
According to the U.S. Meat Export Federation, first-quarter U.S. beef sales to Japan have increased by 42% since 2016.
In addition to the United States, the 50% tariff also applies to imports from Canada, New Zealand and other countries that do not have a free-trade agreements with Japan.
Todd Neeley can be reached at email@example.com
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