The U.S. and Japan strike a deal to roll back Trump-era steel tariffs.
WASHINGTON — The Biden administration reached a deal to partially lift tariffs that the Trump administration had imposed on Japanese steel, agreeing to scale back levies that had rankled both the Japanese government and American manufacturers that use imported metal.
The agreement, which U.S. trade officials announced on Monday, will maintain some protections for American metal makers by transforming the current 25 percent tariff on Japanese steel into a so-called tariff-rate quota, an arrangement in which higher levels of imports are met with higher duties. Up to 1.25 million metric tons of Japanese steel will be allowed to come into the country duty-free each year, with volumes above that level subject to a 25 percent tariff.
That level is the average of Japanese steel exports to the United States in 2018 and 2019, a Biden administration official said. The arrangement was set to take effect Apr. 1.
The deal will place restrictions on products that are finished in Japan using steel from other countries. To qualify for duty-free treatment, steel products must be entirely made in Japan, to ensure the agreement is not providing a backdoor to the United States for cheap metal from China and other countries.
The official said the countries would continue to negotiate over Japan’s steps to reduce excess capacity in its steel sector, as well as to lower the carbon emissions generated by the steel industry, which was a focus of a United States steel agreement with the European Union in October. European steel has been able to enter the United States duty free since Jan. 1.
Aluminum imports — which have also been subject to a 10 percent tariff since the metal levies went into effect — were not affected by the agreement.
In a statement, Gina Raimondo, the commerce secretary, said the agreement would “strengthen America’s steel industry and ensure its work force stays competitive, while also providing more access to cheaper steel and addressing a major irritant between the United States and Japan, one of our most important allies.”
Ms. Raimondo pointed to the agreements with Japan and Europe as a sign that the administration was trying to restore alliances that were strained during the Trump administration.
“Today’s announcement builds on the deal we struck with the EU and will further help us rebuild relationships with our allies around the world as we work to fight against China’s unfair trade practices and create a more competitive global economy for America’s families, businesses and workers,” she said.
The Trump administration imposed metal tariffs on dozens of countries in 2018, saying that a glut of foreign steel and aluminum threatened to put U.S. manufacturers out of business and posed a national security threat. President Donald J. Trump did lift or scale back the tariffs on certain countries, including Mexico and Canada, in return for trade concessions, but many governments remained subject to the levies.
Wendy Cutler, the vice president of the Asia Society Policy Institute, said that imposing national security-related tariffs on a close U.S. ally like Japan “never made sense, and was an unfortunate chapter in U.S. trade history.”
“By putting the steel matter finally behind us, it opens the door for stepped-up cooperation on a range of pressing regional and global economic and trade issues,” she said.
The trade barriers pleased many domestic metal makers and unions, who said they were necessary to preserve American industry and compete with a glut of cheap foreign metal from countries like China. But the tariffs have upset both foreign allies and many American companies that use imported steel and aluminum to make cars, washing machines, beer cans and other products, who were forced to pay higher prices for their inputs.
Kevin Dempsey, the chief executive of the American Iron and Steel Institute, an industry group, said the agreement made with Japan would prevent another import surge that would undermine American industry and employment in the steel sector.
“We appreciate the Biden administration’s continued recognition that the American steel industry is critical to our national and economic security and to efforts to build a more sustainable U.S. economy,” he said, adding that “proper implementation and enforcement” of the deal would be essential.