In unwelcome news for the beef industry, Japan said Friday that it was imposing emergency tariffs of 50 percent on imports of frozen beef, mainly from the U.S.
Gov. Pete Ricketts said the move “will have a serious economic impact” on Nebraska’s beef industry, which is looking to expand exports as the state’s cattle herd grows.
He did not quantify the expected impact, and the U.S. Meat Export Federation said the impact is not clear. Japan is the nation’s and Nebraska’s largest export market for beef. Nebraska exported $316 million worth of beef to Japan in 2016 out of total exports worth more than $1.1 billion.
Ricketts is scheduled to make a trade mission to Japan in September.
“Our beef community can rest assured these tariffs rate increases will be at the forefront of our discussions in Japan,” Ricketts said.
Japanese Finance Minister Taro Aso announced the move Friday.
“The tariff will take effect automatically as the volume of the imported U.S. frozen beef exceeded the quota set by law,” Aso said. “So this is what has to be done.”
The usual tariff rate for frozen beef imports is 38.5 percent. Under World Trade Organization rules, Japan can introduce safeguard tariffs when imports rise more than 17 percent year-on-year in any given quarter.
The hike could shift Japan’s purchases of U.S. beef from frozen to fresh, and raise the risk of triggering tariff increases on fresh beef later this year, compounding the effect on U.S. beef exports, the U.S. Meat Export Federation said.
Ricketts said he is calling on Congress and the Trump administration to work harder at negotiating a bilateral trade agreement with Japan, to address the tariff rates and other market access issues.
The U.S. agriculture industry had been hoping for wider access to Japan’s lucrative market through a Pacific Rim trade initiative, the Trans-Pacific Partnership, which would have reduced Japan’s tariff on U.S. beef to 9 percent. President Donald Trump withdrew from that accord after taking office.
Trade terms Japan negotiated with the 10 remaining members of the TPP remain in force. So Australia, the biggest rival to U.S. beef exporters with a more favorable tariff rate of 27.5 percent for frozen beef, will not face the same jump in tariff rates thanks to a free trade agreement reached with Tokyo as part of the TPP talks. That puts the U.S. at an even greater competitive disadvantage, Ricketts said.
The U.S. and Australia together account for 90 percent of all of Japan’s imports of frozen beef, which is mostly used by beef bowl, hamburger and other fast-food outlets.
Japan’s beef farmers are famed for their marbled Kobe beef, and the government has long used tariffs and other measures to protect its farmers from foreign competition. Still, prices for imported beef tend to be half or less those for beef from domestic cattle.
This report contains material from the Associated Press.