The agreement will transform a current 25 percent tariff into a so-called tariff-rate quota, exempting up to 1.25 million metric tons of Japanese steel.
By Ana Swanson
- Feb. 7, 2022
WASHINGTON — The Biden administration reached a deal to partly lift tariffs that the Trump administration had imposed on Japanese steel, agreeing to scale back levies that had rankled both the Japanese government and American manufacturers that use imported metal.
The agreement, which U.S. trade officials announced on Monday, will maintain some protections for American metal makers by transforming the current 25 percent tariff on Japanese steel into a so-called tariff-rate quota, an arrangement in which higher levels of imports are met with higher duties. Up to 1.25 million metric tons of Japanese steel will be allowed to come into the country duty-free each year, with volumes above that level subject to a 25 percent tariff.
That level is the average of Japanese steel exports to the United States in 2018 and 2019, a Biden administration official said. The arrangement is set to take effect April 1.
The deal will place restrictions on products that are finished in Japan using steel from other countries. To qualify for duty-free treatment, steel products must be entirely made in Japan, to ensure the agreement is not providing a back door to the United States for cheap metal from China and other countries.
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The official said the countries would continue to negotiate over Japan’s steps to reduce excess capacity in its steel sector, as well as to lower the carbon emissions generated by the steel industry, which was a focus of a United States steel agreement with the European Union in October. European steel has been able to enter the United States duty free since Jan. 1.Daily business updates The latest coverage of business, markets and the economy, sent by email each weekday. Get it sent to your inbox.
Aluminum imports — which have also been subject to a 10 percent tariff since the metal levies went into effect — were not affected by the agreement.
In a statement, Gina Raimondo, the commerce secretary, said the agreement would “strengthen America’s steel industry and ensure its work force stays competitive, while also providing more access to cheaper steel and addressing a major irritant between the United States and Japan, one of our most important allies.”
Ms. Raimondo pointed to the agreements with Japan and Europe as a sign that the administration was trying to restore alliances that were strained during the Trump administration.
“Today’s announcement builds on the deal we struck with the E.U. and will further help us rebuild relationships with our allies around the world as we work to fight against China’s unfair trade practices and create a more competitive global economy for America’s families, businesses and workers,” she said.
