For the first time in nearly a decade and a half, Japan will increase emergency tariffs on imported frozen beef due to soaring shipments.
Japan plans to raise tariffs on imported beef from the current 38.5% to 50% until March 2017, representing the first time in 14 years Japan has taken such emergency measures on the commodity. Imported frozen beef is mainly used for processed foods like hamburgers and beef bowls, with a large portion of such imports used in the fast food industry, reported The Japan Times (July 28).
"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]. 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," U.S. Meat Export Federation President Philip Seng said in a statement disapproving of the decision.
Seng was not alone in rallying against the ban, as USDA Secretary Sonny Perdue issued his own statement: "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. 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. 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."
Nebraska Gov. Pete Rickets noted the move "will have a serious economic impact" on the state's beef industry as it looks to expand. Japan represents both the largest market for U.S. and Kansas beef exporters. In a market worth more than $1.1 billion, Nebraska shipped $316 million worth of frozen beef to Japan in 2016. Rickets noted he would be a part of a trade mission to Japan in September, and would call upon the Trump administration and Congress to develop a bilateral trade agreement with Japan to adjust such tariff rate issues in the future, reported Omaha World-Herald (July 31).
A bilateral trade agreement might prove beneficial to U.S. producers. Australia and the U.S. account for nearly 90% of all of Japan's imports of frozen beef. As the biggest rival to U.S. beef exporters, Australia has a more favorable tariff rate of 27.5% thanks to its involvement in the Trans Pacific Partnership. Additionally, Australia will not face the increased emergency tariff thanks to its membership. Gov. Rickets noted this puts U.S. producers at an even larger disadvantage.
Chris is a business writer and market analyst that focuses on the Markets, Legal and Washington sections of the Food Institute Report. In addition, he assists in compiling data for various Food Institute publications throughout the year. He invites you to contact him via email at firstname.lastname@example.org to talk about anything food-related.
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