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Japan to drop tariffs on US beef at the end of the month

Beef

The move could give a certain advantage for a few months but doesn't solve the trade agreement issue.

Posted on Mar 16 ,14:38

Japan is expected to reduce the safeguard tariffs on US frozen beef at the end of this month which could give an advantage for the American exporters.
The tariff drop it will set the tax on the US frozen beef from 50%, as it is now, to 38.5% as it was before last summer.
The move could make the US frozen beef more competitive and it is encouraging, considering the fact that the January report from the U.S. Meat Export Federation (USMEF) showed that U.S. beef exports to Japan increased 7 percent from 2017 volume levels and 19 percent in value, but it does not balance the gap in tariffs applied to the main competitor in this market, Australia.

"We feel we can deal with that tariff gap as it is right now, but we certainly don’t want to experience the 50 percent tariff again," said Joe Schuele, communications director of the USMEF.

The lack of any economic partnership between USA and Japan is a big impediment for American beef exporters to expand their influence on this market. The market for frozen beef is a perfect example of how producers from the US are losing in front of Australian competitors, as the last ones are facing a tariff rate of 27.2% thanks to a trade agreement signed with Japan in 2015.

Beef consumption in Japan is expected to rise by 4% this year pumping up a volume of imports that has already reached 851.000 metric tonnes in 2017 and putting the country on the third spot between the largest import markets in the world.
"If we are talking about beef, again the US is strongly competing in Korea and Japan. But Australia is increasing its production, Brazilia is increasing its production and they're also tied to these markets", said Justin Sherrard, global strategist animal protein, Rabobank.

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