The US and Japan reached a deal today to replace Section 232 tariffs with a quota system, according to several news reports.
The deal, which will be effective as of April 1, will allow duty-free Japanese steel imports at tonnage levels determined by average steel import levels from Japan in 2018-2019, roughly 1.25 million metric tons. To qualify for the quota deal, the steel products must be “melted and poured” in Japan, similar to the tariff-rate quota deal the US signed with the European Union late last year.
While the Section 232 tariffs included steel and aluminum, this deal only includes steel. Additionally, past steel product exclusions from the Section 232 tariffs will not be added to Japan’s quota for two years. Also as part of the deal, Japan committed to take “concrete actions” against excess steel capacity.
US Commerce Secretary Gina Raimondo said in a statement that the deal “will strengthen America’s steel industry and ensure its workforce stays competitive, while also providing more access to cheaper steel and addressing a major irritant between the United States and Japan, one of our most important allies.”