JAPAN TODAY

 

TOKYO - Japan is likely to impose emergency tariffs on frozen beef from the United States starting next month in response to a spike in imports, a government source said Wednesday.

The measure, designed to protect domestic farmers from sudden increases in imports, would remain in place until March 2018, raising tariffs from the current 38.5% to 50%, the source said.

Japan responded in a similar manner to a jump in U.S. beef imports between August 2003 and March 2004.

The government will make a final decision when it confirms an import surge in its trade statistics for June, to be released by the Finance Ministry on Friday.

The move comes ahead of a high-level economic dialogue between Japanese Deputy Prime Minister Taro Aso and U.S. Vice President Mike Pence being arranged for later this year.

The imposition of the increased tariff could be a point of contention during the dialogue as U.S. President Donald Trump has demanded that Tokyo take steps to reduce the U.S. trade deficit with Japan.

Imported frozen beef is mainly used for processed foods such as hamburgers and the Japanese government decides on whether to increase tariffs every quarter by comparing imports, mainly from the United States and Australia, on a year-on-year basis.

Japan can automatically introduce the tariffs as an emergency measure if imports in the quarter surge by more than 17% year on year.

In the April-June quarter, U.S. frozen beef imports are expected to have surged due to a recovery in beef production following a drought, leading to lower prices in the Japanese market.

In fiscal 2016 ending March, Australia and the United States together accounted for 90% of Japan's total imports of frozen beef, with Australia accounting for around 56% and the United States 33%.

As Australian beef would be exempted from the emergency measure due to the signing of a free trade agreement with Japan, U.S. beef would likely become less competitive.

Under the free trade pact, tariffs on Australian beef are being reduced in stages.


© KYODO