U.S. to lift Trump-era tariff on Japanese steel

The United States and Japan have reached an agreement to ease the tariff on steel imports imposed by the Trump administration. Under the agreement, the U.S. will permit 1.25 million metric tons of steel to enter the U.S. from Japan each year duty-free. This comes after President Joe Biden last year directed the Commerce Department and U.S. Trade Representative to work with their Japanese counterparts to find a solution to the tariff issue.

In 2018, the Trump administration imposed a 25% tariff on steel imports and a 10% tariff on aluminum imports from dozens of countries. While the agreement announced Monday applies to Japanese steel, it does not address the tariff on aluminum imports from Japan. According to senior USTR and Department of Commerce officials, Japan chose not to include aluminum in the agreement. However, should the country make commitments on aluminum, the U.S. would be open to discussions, officials said.

The volume being allowed duty-free is based on the historical import average from Japan to the United States in 2018. All steel under the terms of the agreement must also be produced entirely in Japan. The agreement begins April 1.

"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 United States and Japan, one of our most important allies," said Commerce Secretary Gina Raimondo about the agreement.     

According to the officials, in return for the easing of steel tariffs, Japan has committed to fight excess capacity in steel.

Senior USTR and Department of Commerce officials argued Monday the agreement will help the two countries work together to address China's anti-competitive actions.

"This agreement, combined with last year's resolution with the European Union, 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," said U.S. Trade Representative Katherine Tai. "Importantly, this agreement represents an important example of our worker-centered trade policy in action. It will protect a vital American industry, our workers, and their families as we work to deliver trade policies that can unlock broad-based economic prosperity and growth."

This announcement marks the second agreement between the Biden administration and allies to ease Section 232 tariffs imposed by the Trump administration. Last fall, the Biden administration announced it reached a deal with the European Union to roll back tariffs on European steel and aluminum. That agreement began at the start of this year.