The U.S. and Japan have announced an agreement last March that will allow American farmers and ranchers to meet Japan's growing demand for U.S. beef without automatically increasing customs duties.
Threshold Raised for the Import of American Beef into Japan
Meat consumption in Japan does not have a long history, with the Japanese historically relying on rice for calories and fish for protein. Japan only began importing U.S. red meat (beef and pork) in significant quantities in the late 1970s.
Since that time, however, the U.S. share of the import market has increased and exports to Japan have “taken off like a rocket.” The U.S. has exported, on average, 632 million pounds of beef annually to Japan since 1989.
In 2021, the U.S. was the top beef exporting country in the world, with global sales of beef and beef products valued at over $10 billion. Exports of U.S. beef to Japan totaled almost $2.4 billion and topped the annual limits called “safeguard.” When Japan's import limit of 242,000 metric tons for American beef was reached in March 2021, tariffs were raised by 10%.
The U.S. Meat Export Federation urged Tokyo to raise the threshold, and a year later, an agreement was signed allowing Japan to import more American beef – above the previously agreed threshold – before tariffs on the product rose again from 25.8% to 38.5%.
The New Three Trigger Safeguard Mechanism
Thanks to the introduction of a new “three-trigger" safeguard mechanism, Japan cannot impose higher tariffs in future. The three triggers that must be hit in order for Japan to implement the safeguard and impose a higher tariff are:
- Imports from the U.S. must exceed the original beef safeguard trigger level under the U.S.-Japan Trade Agreement;
- The aggregate volume of beef imports from the U.S. and the original signatories of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) must exceed the CPTPP beef safeguard;
- Imports from the U.S. must exceed the total amount of beef imports from the U.S. during the previous year.
Both governments will work to finalize the text of the agreement reflecting the new trigger levels and complete their respective domestic procedures. The U.S., in consultation with Japan, will publish the final text of the agreement at the most appropriate time.
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