One country agreed to increase imports of U.S. ag products while another removed tariffs
By Diego Flammini
The American ag sector scored two victories this week with two trading partners taking steps to further trade between themselves and the U.S.
The U.S. and U.K., for example, reached a new 232 tariff agreement on March 22 that allows some U.K. steel and aluminum products to enter the United States without Section 232 tariffs.
President Trump brought in tariffs in 2018 under Section 232 of the Trade Expansion Act. This allows the president to adjust imports if foreign goods are believed to be a threat to national security.
As a result, multiple countries face tariffs of 10 and 25 percent respectively for steel and aluminum products.
This new agreement between the U.S. and England will come into effect on June 1.
In exchange for lifting the tariffs on steel and aluminum, the U.K. is removing its 25 percent retaliatory tariff on U.S. corn and other goods totaling more than $500 million of American products.
Industry groups are happy to see U.S. ag goods enter the U.K. without the threat of additional duties.
“This agreement will provide opportunities to expand free and fair trade and strengthen our economic and strategic relationship with one of our greatest allies. The U.S. Grains Council is very pleased with the outcome regarding this agreement because it paves the way for U.S. corn to re-enter the UK market once again,” Ryan LeGrand, president and CEO of the U.S. Grains Council, said in a March 24 statement.
The U.S. ag sector also received increased market access from an Asian trading partner.
On March 24, Agriculture Secretary Tom Vilsack and Trade Representative Katherine Tai announced the United States and Japan reached an agreement that would see Japan purchase more U.S. beef.
The U.S. exported about $2.4 billion of beef to Japan in 2021.
The expanded access for U.S. beef to Japan comes from an agreement to increase the beef safeguard trigger level in the U.S.-Japan Trade Agreement.
A new three-trigger mechanism is in place.
If all three triggers are hit, Japan can implement the safeguard and increase tariffs on U.S. beef.
The triggers are:
- Imports from the United States must exceed the original beef safeguard trigger level under the U.S.-Japan Trade Agreement;
- The aggregate volume of beef imports from the United States and the original signatories of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) must exceed the CPTPP beef safeguard; and
- Imports from the United States must exceed the total amount of beef imports from the United States during the previous year.
The U.S. beef sector is pleased to see the U.S. and Japanese governments make progress on this front.
“While the details of the agreement in principle have not been disclosed, NCBA is encouraged that today’s announcement means we are taking necessary steps to secure long-term solutions that enable American cattle producers to continue providing Japanese consumers with high-quality U.S. beef at competitive prices,” Kent Bacus, senior director of international trade and market access with the National Cattlemen’s Beef Association, said in a March 24 statement.
And more good news for U.S. ag could be on the horizon as the U.S. Department of Agriculture is embarking on multiple trade missions in 2022.
USDA reps will be in:
- London, England from June 20 to 23,
- Manila, Philippines from July 18 to 21,
- Nairobi, Kenya from Oct. 31 to Nov. 3, and
- Madrid, Spain from Nov. 29 to Dec. 3.
The trip to Kenya will include buyers from across East Africa. And the trade mission in Spain will include buyers from Portugal.