Japan Is Hiking Tariffs on Frozen Beef Imports from the U.S. and Elsewhere

July 28, 2017, 5:34 AM UTC
Inside Aeon Supermarket As Japan Increases Sales Tax
An employee arranges packs of beef imported from Australia at an Aeon Co. supermarket in Chiba, Japan, on Tuesday, April 1, 2014. Japan's economy will probably withstand a sales tax increase that takes effect today as Prime Minister Shinzo Abe prepares economic stimulus measures and companies raise wages, the country's new bank lobby chief Nobuyuki Hirano said. Photographer: Tomohiro Ohsumi/Bloomberg via Getty Images
Tomohiro Ohsumi—Bloomberg/Getty Images

Japan’s Ministry of Finance (MOF) said on Friday the country will raise tariffs on frozen beef imports from the United States and other countries from August to protect domestic producers.

Tariffs on frozen beef will jump to 50% from the current 38.5% between Aug. 1 and the end of March next year, as a “safeguard” mechanism to protect domestic farmers is being triggered, the ministry said in a statement.

The increase will be the first time the tariff mechanism has been tripped for beef imports since it was last triggered for chilled beef in August 2003, the farm ministry said.

The increase threatens a significant sector of United States’ access to the biggest Asian market for U.S. beef overall, just as President Donald Trump is trying to expand American exports to Japan. U.S. frozen beef exports to Japan last year were worth more than $400 million.

“The safeguard will not only have negative implications for U.S. beef producers, but will also have a significant impact on the Japanese foodservice industry,” said U.S. Meat Export Federation (USMEF) President and CEO Philip Seng in a statement on the organization’s website.

The tariff hike will be especially hard on gyudon beef bowl restaurants that rely heavily on U.S. frozen beef cuts as a primary ingredient, he said.

A tariff increase is automatic if quarterly imports for specific types of beef products—both from all nations and from those that do not have economic partnership agreements (EPAs) with Japan—rise more than 17% from a year earlier.

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In April-June, Japan’s first fiscal quarter, frozen beef imports from all nations totaled 89,253 tonnes, up 17.1% from a year ago, and imports from non-EPA nations reached 37,823 tonnes, up nearly 25%, government data showed.

Nations that have EPAs with Japan, such as Australia, Mexico and Chile, will be excluded from the hike in tariffs.

Japanese Finance Minister Taro Aso told reporters the government has been contacting affected nations such as the United States to explain the increase, Kyodo news agency said.

No safeguard or increase will be triggered for chilled beef imports as the volumes did not exceed the required level.

Japan’s beef bowl restaurants suffered tremendous setbacks when U.S. beef imports were previously curtailed, and were “finally enjoying robust growth due to greater availability of U.S. beef,” USMEF’s Seng said.

U.S. sales of frozen beef cuts to Japan last year were worth $418 million, making up around 18% of total U.S. frozen beef sales, according to data from the U.S. Census Bureau.

For the period January-May this year, total U.S. beef exports to Japan were valued at $731 million, up 32% from the same period in 2016, the same data showed.

By volume, total U.S. beef sales to Japan for January-May came in at 123,290 tonnes, compared to 96,394 tonnes a year ago. Overall U.S beef exports for the first five months of the year were 497,323 tonnes.

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