US proposes to negotiate Trump-era steel tariffs with Japan

The US has reportedly offered to negotiate with Japan over tariffs on steel and aluminum imports based on Article 232 of the Trade Expansion Act, as per a SteelDaily report.

The Representative of U.S. Department of Commerce and Trade submitted a proposal for negotiations on 10 Dec'21 to officials in Fumio Kishida's cabinet, but Japanese officials are holding out for better negotiations.

Since CY'18, the USA imposed import duties of 25% and 10% on steel and aluminum based on Article 232 of the Trade Expansion Act for national security reasons. It was not until Oct'21 that the United States adopted a quota system that would not impose tariffs on EU steel and aluminum products up to a certain amount, and the EU stopped imposing retaliatory tariffs.

Negotiations on cards

The US proposal is similar to the quota system with the EU in that it will allow imports of a certain amount of Japanese steel and aluminum products to be duty-free based on average shipments in the past.

The US imported about 1.9 million tonnes (mn t) of Japanese steel in CY'16, about 1.7 mn t in CY'17, and 742,158 t in CY'20.

In case of Japan, it is known that exports to the USA account for about 5% of total steel exports; so it is known that Japan has adopted a method to increase exports through Mexico rather than hard measures such as imposition of retaliatory tariffs.

US steel players are also seeing imports similar to a steel import quota for Japan as the Joe Biden administration aims to sign a 'very strong' economic framework agreement on supply chain, export controls and AI standards next year with some Asian countries. It was interpreted as a proposal to negotiate a tariff system.