Japan Steel Agreement Goes Into Effect As USTR Talks China Trade

The same week the U.S. Supreme Court declined to hear a challenge to former President Donald Trump’s Section 232 steel imports, President Joe Biden issued a proclamation outlining the United States’ agreement with Japan regarding steel and aluminum imports, which took effect on April 1, 2022.

As Connecting the Dots reported in February, like it has done with other countries, the United States has replaced the 25 percent steel tariffs with a tariff-rate quota (TRQ) system that restricts the quantity of steel products imported into the United States from Japan.

Under the agreement, up to a maximum of 1.25 million metric tons of steel can be shipped annually to the United States without facing Section 232 tariffs. Shipments exceeding this amount still will be subject to the 25 percent penalty.

This agreement does not apply if the steel is not entirely produced in Japan and aluminum imports from Japan are not impacted by the agreement so they still will be subject to a 10 percent penalty.

Also last week: U.S. Trade Representative Katherine Tai was on Capitol Hill to testify before both the House Ways and Means Committee and the Senate Finance Committee.

Regarding the possibility of new trade agreements, Ambassador Tai said “the sky’s the limit” when it comes to negotiating with the European Union, Kenya, and the United Kingdom. Tai revealed little appetite for tariff-cutting agreements, however. Tai also said the Biden administration will work to ensure the United States’ process for negotiating trade agreements “evolves over time.”

Regarding relations with China, Ambassador Tai said there is a need for a “realignment” due to China’s “industrial targeting practices,” which have allowed the country to “corner the market in critical industries and … future industries.” Tai stressed that the U.S. strategy must now “expand beyond only pressing China” into abandoning trade practices that U.S. officials views as unfair. She also pledged to defend “our values and economic interests from the negative impacts” of China’s “unfair economic policies and practices.” Read more here.