Beginning in April, Japan will be allowed to pay lower duties on exports of up to 1.25 million tons of steel per year to the US, ending the more than 25% levies Trump imposed in June 2018 on Japanese metal imports, citing national security concerns.
The dispute with Japan was one of a number Trump initiated during his time in office that Biden has worked to resolve, and follows an agreement Washington reached with the EU last year to lift the metals tariffs.
“I’m pleased to announce the deal we reached will strengthen America’s steel industry and ensure its workforce stays competitive, while also providing more access to cheaper steel and addressing a major irritant between the US and Japan, one of our most important allies,” Commerce Secretary Gina Raimondo said in a statement.
US Trade Representative Katherine Tai said the deal would “protect a vital American industry, our workers and their families”, as well as level the playing field against China.
“This agreement, combined with last year’s resolution with the EU, will help us combat China’s anti-competitive, non-market trade actions in the steel sector while helping us reach President Biden’s ambitious global climate agenda,” she said.
However, the deal does not resolve all the outstanding trade issues between the two countries.
Levies of 10% on Japan’s aluminium exports will remain for now, while the new tariff system covers less than the 1.8 million tons of steel the US imported from Japan in 2017, the last year before the levies were imposed, according to Commerce Department data.
Smoothing things over
Trump’s Republican administration engaged in a number of trade spats with allies and adversaries alike, many of which were unresolved when Biden took office in January 2021.
Among those were the tariffs of 25% on steel and 10% on aluminium imported from several countries, including the EU and Japan.
Japan and the US are among the world’s top steel producers, ranked behind China, the EU and India, according to data from the World Steel Association.
At the time, critics rejected Trump’s citing of national security grounds in his decision, while the levies poisoned relations with Brussels and other allies.
The Biden administration worked out an agreement to lift the EU metals tariffs last October, and this month announced a deal to resume trade in mussels, clams, oysters and scallops after a decade-long halt.
Last June, Britain and the US agreed to suspend retaliatory tariffs levied during a 17-year dispute over state aid for European planemaker Airbus and US rival Boeing, and also opened talks last month to resolve their dispute over the metals tariffs.
While Biden, a Democrat, has cast himself as a departure from Trump, he’s maintained much of his predecessor’s focus on countering strategic rival China.
A bill to invest billions of dollars in jump-starting high-tech research in manufacturing, in part to counter Beijing, is working its way through Congress.
Meanwhile, Tai is negotiating with China over its pledge in 2020 to increase its purchases of American products and services by at least US$200 billion that year and 2021 in exchange for the easing of tariffs — targets it fell short of.
Biden has also said he isn’t ready to remove levies Trump had imposed in 2018 on US$370 billion in Chinese goods.