US, Japan to initiate talks on Section 232 steel, aluminum tariffs

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The United States and Japan have agreed to initiate talks regarding the former’s Section 232 tariffs on Japanese steel and aluminum imports, Reuters reported this week.

According to a report by AP, Japan’s industry ministry said Japan’s Industry Minister Koichi Hagiuda and U.S. Commerce Secretary Gina Raimondo attended the meeting. However, a ministry official said no concrete measures were discussed and no date was set for the talks.

The meeting comes after the U.S. administration said over last weekend that it would open talks to try to ease the tariffs.

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US, Japan at the negotiating table over Section 232

tariff

Feng Yu/Adobe Stock

The two nations have come to the negotiating table to resolve bilateral concerns from global non-market excess capacity driven largely by China, as well as the duties the U.S. imposes on imports, Raimondo and U.S. Trade Representative Katherine Tai said in a statement last Friday.

“Secretary Raimondo and Ambassador Tai reiterated concerns about the impact on U.S. industries stemming from global non-market excess capacity driven largely by China,” the statement reads. “The distortions that result from this excess capacity pose a serious threat to the market-oriented U.S. steel and aluminum industries and the workers in those industries.  The United States and Japan have a historic alliance, built on mutual trust and respect, and reflecting shared values and a strong commitment to resolving global challenges through closer cooperation.”

Earlier in November, Japan had requested the U.S. to abolish tariffs. Former U.S. President Donald Trump imposed the steel and aluminum tariffs in 2018, using Section 232 of the Trade Expansion Act of 1962.

Japan is pushing for a resolution to the tariffs in a way that is consistent with WTO rules.

US, EU reach deal on Section 232

As we noted recently, the U.S. and the European Union agreed to end a long standing dispute over US steel & aluminum tariffs imposed in 2018. As a result, the U.S. avoids a scheduled doubling of E.U. retaliatory tariffs on U.S. goods.

Japan is now looking for a similar arrangement. Meanwhile, the two nations have also agreed to establish the Japan-US Commercial and Industrial Partnership (JUCIP) to partner in reinforcing industry competitiveness and supply chains.

“Specifically, JUCIP will initiate activities that promote investment and vitalize cooperation between the private sectors of both countries, including through the Department of Commerce’s SelectUSA and the Japan External Trade Organization’s J-Bridge programs,” the joint statement reads. “JUCIP will also advance innovation in areas such as digital and advanced technologies. JUCIP will promote the resiliency of supply chains for semiconductors, 5G and other vital industry segments, strengthen collaboration in the protection of critical technologies and the development of infrastructure, and address market-distorting measures to counter unfair trade practices.”

In 2018, the Trump administration imposed a 25% steel tariff, along with a 10% duty on aluminum imports, on many nations, including Japan. A few nations, like Brazil and South Korea, have already negotiated quota arrangements. Meanwhile, the U.S. dropped the import duties for Canada and Mexico in 2019.

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