The U.S. Meat Export Federation (USMEF) recently commended the Office of the U.S. Trade Representative (USTR) on the agency's consultations with Japan aimed at adjusting the country's safeguard trigger levels for imports of U.S. beef.
In 2021, Japan's imports of U.S. beef exceeded the safeguard threshold (242,000 metric tons) on March 17, approaching the end of the Japanese fiscal year (March 31). This triggered a higher tariff rate of 38.5% (up from 25.8%) on U.S. beef muscle cuts, which was in effect for 30 days. After this 30-day period passed, the tariff rate for U.S. beef declined to 25%, as provided in the Japan-U.S. Trade Agreement. But for beef suppliers that are members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the 25% tariff rate went into effect April 1.
"This may not sound real disruptive, but in fact, the timing of it is extremely disruptive. March, April is right before one of the busiest consumption times a year — the Golden Week holidays," says USMEF President and CEO Dan Halstrom. "So of course, our concern going forward is if we can't come to an agreement, we run a threat of triggering the safeguard each and every year."
This year the snapback tariff rate is 30%, while the Fiscal Year 2022 rate under Japan's trade agreements is 24%. Competitors such as Australia, Canada, New Zealand and Mexico will receive their rate reduction on April 1, but it will likely be delayed for U.S. beef unless the safeguard threshold is amended.
"Japanese importers are well aware that the U.S. runs this risk of triggering a safeguard each year. Whereas our primary competition around the world — Canada, New Zealand, Mexico, etc. — that are CPTPP trading partners, they do not have any risk of triggering a safeguard," says Halstrom. "The other big competitor out there — Australia — in the last few years has been running a deficit in terms of available production, as they dealt with their drought issues. However, the last two years they've been getting rain. They've been holding cattle. At some point, these cattle are going start coming to market and we will see bigger production levels available out of Australia for Japan. There's a lot of reasons we really need to make progress on the beef safeguard."