US steel groups welcome TRQ deal with Japan

US steel industry organizations welcomed an agreement between the US and Japan Feb. 7 to replace the US 232 tariffs with a tariff-rate quota on imports of Japanese steel, set to take effect April 1.

Under the terms of the deal, 1.25 million mt of Japanese steel across 54 product categories will be allowed into the US duty-free, with the 25% Section 232 tariff to take effect for any imports above that level. While similar to the deal the US reached with the EU in October, under the agreement struck with Japan, steel products that are granted a specific product exclusion will still count toward the overall quota.

“[This] shows that the US government is committed to negotiating alternative schemes to the 232 tariffs on a case-by-case, country-by-country basis,” Philip Bell, president of the Steel Manufacturers Association, said in a statement. “We are particularly glad to see that that exclusion-based imports of Japanese steel products will count against the quota volumes.”

In 2021, 58% of Japanese steel imports came to the US as exclusions, representing about 550,000 mt of steel products, according to Bell.

The establishment of a TRQ will help to prevent an import surge that would undermine the domestic industry as the US and Japan look to expand their cooperation on addressing global steel excess capacity, Kevin Dempsey, CEO of the American Iron and Steel Institute said in a statement.

“Proper implementation and enforcement of the TRQ will be essential to the ongoing success of the Section 232 program, as will continued vigorous enforcement of our laws to prevent circumvention and evasion of US trade remedy measures on steel,” Dempsey said.

In order to establish more market-oriented conditions for steel, Japan has agreed to implement “appropriate domestic measures, such as antidumping, countervailing duty, and safeguard measures or other measures of at least equivalent effect, with a view to initiating formal processes for such measures within six months,” according to a joint US-Japan statement.

Additionally, the inclusion of a melted and poured requirement will help to prevent circumvention and transshipment, Bell said.

“Overall, this is a strong deal for American steelmakers, and it shows that we should not take a one-size-fits-all approach when it comes to our jobs, environment and economic growth,” he said.

Following the agreement with the EU in October, countries have been petitioning the US to negotiate alternate arrangements to the Section 232 duties, first put in place by former President Donald Trump in March 2018. The US officially entered bilateral negotiations with the UK Jan. 19 concerning the Section 232 tariffs.

— Justine Coyne