Japan’s emergency tariffs on frozen beef imports likely to irk U.S.

Kyodo

The government said Friday it will impose emergency tariffs on frozen beef from the United States and other regions starting in August due to soaring shipments. The beef is widely used in fast food.

Japan will raise tariffs from the current 38.5 percent to 50 percent until March 2018. It is the first time in 14 years that Japan has taken such emergency measures on U.S. beef imports, a decision likely to irk Washington.

Imported frozen beef is mainly used for processed foods such as hamburgers and beef bowls and could lead to hikes in consumer prices.

U.S. Meat Export Federation President Philip Seng rapped the decision, saying in a statement, “the safeguard will not only have negative implications for U.S. beef producers, but will also have a significant impact on the Japanese food service industry.”

“It will be especially difficult for the gyudon beef bowl restaurants that rely heavily” on U.S. beef, the statement said. “We will also continue to pursue all opportunities to address the safeguard situation by encouraging the U.S. and Japanese governments to reach a mutually beneficial resolution to this issue.”

Allowed under World Trade Organization rules, Japan automatically introduces the safeguard tariffs when imports grow more than 17 percent in a quarter on a year-on-year basis.

Finance Minister Taro Aso told reporters the government is explaining the move to the United States and other countries.

Aso, who doubles as deputy prime minister, said he is ready to discuss the emergency measure, if requested, at a high-level economic dialogue with U.S. Vice President Mike Pence being arranged for later this year.

Farm minister Yuji Yamamoto told reporters that the effect of the measure on consumers should be “limited” as the frozen beef targeted accounts for 20 percent of total beef imports.

Trade data released earlier Friday showed that frozen beef imports reached 89,253 tons in the April-June quarter, up 17.1 percent from a year earlier.

The surge is mainly due to a recovery in U.S. beef production and a drop in price following the end of a drought in the United States, according to a farm ministry official.

Japan has also increased its imports in anticipation that U.S. beef prices will balloon following the resumption of U.S. beef exports to China, the official said.

The United States is the second-largest supplier of frozen beef to Japan after Australia, together accounting for 90 percent of total imports of the product. Other suppliers include Canada and New Zealand.

Australian beef is exempt from the measure due to a bilateral free trade agreement.

The tariff hike could become a source of contention with the United States at a time when the administration of U.S. President Donald Trump is calling on Tokyo to further open its agricultural market and take steps for “fair trade” with the United States, which continues to run trade deficits with Japan.