U.S. and Japan Reach Steel Import Tariff Rate Quota Agreement to Address Section 232 Tariffs – International Law

United States: U.S. and Japan Reach Steel Import Tariff Rate Quota Agreement to Address Section 232 Tariffs

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On February 7, 2022, the United States and Japan announced a agreement to allow “history-based sustainable volumes of Japanese steel products to enter the U.S. market without the application of Section 232 tariffs.” Under the agreement, the United States will implement a tariff quota (TRQ) on steel imports from Japan, beginning April 1, 2022. Under the TRQ, the overall annual import volume is set at 1.25 MMT under 54 product categories (set out in the Annex to the Agreement) and allocated based on the historical period 2018-2019. To qualify for duty-free entry under the TRQ, imports of steel must be “melted and cast” in Japan; the agreement also allows imports of steel-derived articles from Japan to be exempt from Section 232 duties.

Steel products from Japan within the import quota will enter the United States free of Section 232 duties, while all affected steel products entering the United States over the quota limits will continue to be subject to the duty rate of Article 232 of 25%. The Department of Commerce will continue the process of excluding steel products imported from Japan. Beginning in July 2022, the United States will assess TRQ utilization and administration on a quarterly basis and conduct an annual review to calculate the level of U.S. demand for steel to increase or decrease the volume of the tariff quota.

In addition to the TRQ agreement, the United States and Japan issued a Joint statement noting that countries:

  • Cooperate on trade remedy and customs matters by sharing public information and best practices on topics such as how detection of fraud/evasion and circumvention of duties are addressed and the possible self-initiation of such investigations .

  • Monitor steel and aluminum trade between countries.

  • Cooperate on excess off-market capacity in which Japan will implement appropriate domestic measures, such as anti-dumping measures, countervailing duties and safeguard measures or other measures of at least equivalent effect. Japan will discuss with the United States these potential domestic measures to address excess non-market capacity and the current state of global steel and aluminum markets, including market trends and price differences between markets, domestic industry conditions, and import and export analysis. The data.

  • Review this arrangement and ongoing cooperation annually, including any changes in world steel and aluminum markets, demand and US imports.

In short Press statementU.S. Trade Representative Katherine Tai said, “This agreement, combined with last year’s resolution with the European Union, will help us work with Japan to combat anti-competitive, non-market trade actions by the China in the steel sector, while helping us achieve President Biden’s ambitious global climate agenda.”

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