U.S., Japan Strike Deal to Roll Back Trump-Era Steel Tariffs

Earlier this week, The Biden administration announced that it had reached a deal with the Japanese government to partly lift tariffs that the Trump administration had imposed on Japanese steel. The agreement will scale back levies that had impacted both the Japanese government and American manufacturers that use imported metal.

The deal, which was initially announced on Monday, will maintain some protections for American metal makers by transforming the current 25% tariff on Japanese steel into what’s known as a tariff-rate quota, an arrangement in which higher levels of imports are met with higher duties. This means that 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% 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 on April 1. The new agreement also 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, which ensures the deal is not providing a back door to the United States for cheap metal from China and other countries.

In a statement, Gina Raimondo, the commerce secretary, said the agreement would “strengthen America’s steel industry and ensure its workforce 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.” While many domestic metal makers and unions supported the tariffs, foreign allies and many American companies that use imported steel were not fans of the tariffs, with the latter in particular noting that they hurt their ability to produce goods at a profitable level. 


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