TOKYO -- The Japanese government intends to trigger an import safeguard mechanism on frozen beef from the U.S. starting August 1, after volumes exceeded the specified levels, The Nikkei can reveal.
The levy on such products, currently 38.5%, will be raised to 50% -- effective through the end of next March. The government is scheduled to make an announcement on Friday, when it releases its trade statistics.
The safeguard mechanism is designed to protect domestic industry from unexpected increases in imports. The amount of frozen beef brought in from the U.S. in the April-June period of 2017 has apparently risen 20% or so on the year.
High Australian beef prices, attributable to drought, have driven up import volumes from the U.S.
American beef accounted for 39% of Japan's total beef imports in the fiscal year ended March, making the U.S. the second-biggest foreign source after Australia, according to the Japanese Ministry of Agriculture, Forestry and Fisheries. Of about 210,000 tons of U.S. beef imported into Japan in the fiscal year, about 90,000 tons were frozen.
The temporary tariff increase is likely to be passed on to consumers.
This is the fourth time Japan has used the safeguard on U.S. beef. The last time around, it slapped higher tariffs on frozen beef from August 2003 and March 2004.
Tokyo's decision will almost certainly spark a backlash in the U.S, where the livestock industry is concerned about falling behind in the promising Japanese market. With Washington having withdrawn from the Trans-Pacific Partnership, the move could also raise the pressure to conclude a bilateral free trade agreement.