The United States will abolish customs duties on a quota of Japanese steel imports, the latest move by Washington to resolve trade disputes left over from the Trump era, US officials announced Monday.
“This deal will strengthen the US steel industry and ensure its workforce remains competitive by providing better access to less expensive steel,” Commerce Secretary Gina Raimondo said in a statement.
In addition, he pointed out that the agreement would help resolve “major friction” with Japan, one of the “most important” allies of the United States.
Japan is one of many countries that former Republican President Donald Trump had imposed, in June 2018, additional customs duties of 25% on steel and 10% on aluminum.
The deal announced Monday is due to take effect on April 1 and covers an annual quota of 1.25 million metric tons of Japanese steel, said a US Commerce Department official who requested anonymity.
This is a substantial quota, even higher than the 1.1 million tons that Japan exported to the United States in 2019, according to data from the Commerce Department.
US Trade Representative Katherine Tai stressed that the deal “will protect a vital American industry, our workers and their families,” and level competition with China.
“This agreement, in conjunction with last year’s resolution with the European Union, will help us combat China’s anti-competitive and non-trade actions in the steel sector, while also helping us move closer to the President’s ambitious global climate agenda. Joe) Biden,” Tai added.
In any case, the agreement does not resolve all current trade problems between the two countries. The 10% levy on Japan’s aluminum exports will still remain in place.
– ‘Melted and poured’ –
The Alliance for American Manufacturing welcomed the deal, specifically the provision ensuring that imported steel must be “smelted and poured” in Japan so that other nations do not move their metals through the country.
The agreement “recognizes the value of steel production to the economic and national security of the United States,” alliance president Scott Paul said in a statement.
The Trump administration was embroiled in several trade disputes with allies and adversaries alike, many of which remained unresolved when Biden took office in January 2021.
On steel, the former Republican president justified the decision at the time as a defense of the US steel industry “decimated by decades of unequal trade.”
Trump resorted to “section 232” of the Trade Expansion Act of 1962, which allowed limiting exports that put the “national security” of the United States at risk.
These customs tariffs provoked the wrath of Washington’s allies, who took retaliatory measures.
Among the commercial peace brought by the Biden administration are an agreement that eliminates tariffs on metals from the EU, from last October, and another this month to resume trade in mussels, clams, oysters and scallops after a decade-long suspension.