U.S. Moves to Ease Tariffs on Imported Steel, Aluminum From Japan

U.S. Moves to Ease Tariffs on Imported Steel, Aluminum From Japan

19:02 - Washington, Tokyo to start talks to address bilateral concerns over steel and aluminum issues

The Biden administration is moving to ease import tariffs on Japanese steel and aluminum, in the latest step by the White House to reset trade relations with allies.

The U.S. and Japan will begin talks to address bilateral concerns over steel and aluminum issues, including the tariffs imposed by the Trump administration, U.S. trade and commerce officials said in a joint statement Friday.

The administration agreed last month to relax tariffs on European steel and aluminum, removing a longstanding irritant between the two sides. Action to ease the tariffs on Japanese metals had been expected as a next step.

The tariffs were imposed by former President Donald Trump, who said he wanted to protect the domestic steel and aluminum industries from imports.

The negotiations with Tokyo will be kicked off formally next week, when U.S. Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo are scheduled to visit Japan to discuss bilateral trade and economic issues, including policies toward China and addressing the current global supply-chain disruptions.

In a joint statement, Mses. Raimondo and Tai said a glut in steel and aluminum was “driven largely by China,” posing “a serious threat to the market-oriented U.S. steel and aluminum industries and the workers in those industries.”

“The United States and Japan have a historic alliance, built on mutual trust and respect, and reflecting shared values and a strong commitment to resolving global challenges through closer cooperation,” the statement said.

Japanese officials have urged the Biden administration in recent weeks to resolve the issue quickly.

“Given the new development between the U.S. and the EU, we certainly hope we will be reaching a constructive outcome on this issue between Japan and the U.S.,” Noriyuki Shikata, Japan’s cabinet secretary for public affairs, said Thursday during a panel discussion hosted by the Center for Strategic and International Studies, a Washington think tank.

Trade and industry experts expect the deal with Japan will be similar to the agreement signed with the EU during the Group of 20 summit on Oct. 30. Under an arrangement known as a tariff-rate quota, European companies can export steel and aluminum duty-free until reaching certain amounts. Exports beyond the threshold will be permitted but will be subject to tariffs.

The administration said Friday the new consultations with Japan would also include how to address climate change.

The steel and aluminum tariffs had been a particularly thorny issue between Washington and its allies, including Japan, because Mr. Trump cited imported steel as a threat to U.S. national security by jeopardizing the domestic industry.

The removal of pending trade squabbles will allow the U.S. and its allies to focus on more significant issues of mutual interest, namely how to cooperate in confronting China’s trade and economic policies, including the use of government subsidies and state-owned enterprises that officials believe distort the global market.

Having achieved agreements to resolve several issues with the EU, the administration will now shift its focus to strengthening ties with Asian allies.

Underscoring the beginning of the new phase, Ms. Tai and Ms. Raimondo are both traveling to Asia next week. Ms. Tai’s itinerary includes Japan, South Korea and India. Ms. Raimondo will also start her trip in Tokyo before traveling to Singapore and Malaysia.

Mr. Trump imposed a levy of 25% on steel and 10% on aluminum in 2018, fulfilling a campaign pledge aimed a lowering the U.S. trade deficit and reviving the U.S. steel industry.

The tariffs succeed in pushing down steel imports but didn’t lead to the steelmaking renaissance that had been promised.

The tariffs also hurt U.S. manufacturers, including those in the automotive and appliance sectors, by making steel more expensive. Some of these companies are now pushing the administration harder, saying removing tariffs will help contain the current inflation affecting U.S. consumers.

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