President Donald Trump and Japanese President Shinzo Abe signed a deal today (Sept. 25) to eliminate or reduce tariffs on $7.2 billion of U.S. food and agricultural products.
Trump told reporters that the leaders were taking a step toward “a fair and reciprocal trade agreement.”
According to the U.S. Trade Representative, the early agreement also includes market access for industrial goods as well as digital trade.
According to the U.S. Trade Representative, the agreement:
- Reduces tariffs on fresh and frozen beef and pork,
- Provides a country-specific quota for wheat and wheat products,
- Reduces the mark-up on imported U.S. wheat and barley,
- Eliminates the tariffs for almonds, walnuts, blueberries, cranberries, sweet corn, grain sorghum, broccoli and more,
- Provides staged tariff elimination for products such as cheeses, processed pork, poultry, beef offal, ethanol, wine, frozen potatoes, oranges, fresh cherries, egg products and tomato paste.
- When the agreement is implemented by Japan, American farmers and ranchers will have the same advantage as CP-TPP countries selling into the Japanese market.
- The United States will provide tariff elimination or reduction on 42 tariff lines for agricultural imports from Japan valued at $40 million in 2018, including products such as certain perennial plants and cut flowers, persimmons, green tea, chewing gum, and soy sauce.
Find more on the specifics of the agreement here.
The agricultural community is praising the agreement.
“Japan is American agriculture’s fourth-largest export destination and vital to the livelihood of hundreds of thousands of farms and the families who live on them,” said American Farm Bureau Federation President Zippy Duvall. “We export nearly $13 billion a year in agricultural products to Japan, even as we continue to face steep tariffs on many exports. This agreement, once signed, will lower tariffs and put U.S. farmers and ranchers on a level playing field to compete in Japan with countries that participate in the Trans-Pacific Partnership.”
Japan is an important market for corn, sorghum, and food and feed barley, according to the U.S. Grains Council.
“The details revealed today about the trade agreement between the U.S. and Japan show that this pact would bring commodities the U.S. Grains Council represents largely back in line with the Trans-Pacific Partnership Agreement and put these commodities on equal footing with other current Comprehensive and Progressive Agreement for Trans-Pacific Partnership countries,” said Ryan LeGrand, U.S. Grains Council president and CEO.
“Japan has been a strong trading partner and friend for American agriculture, now the second-largest purchaser of U.S. corn,” said National Corn Growers Association President Lynn Chrisp. “NCGA has long-advocated for an agreement with Japan and, with many farmers struggling amid challenging times in agriculture, this is very welcome news.”
Beef producers say it’s a win for producers in the U.S. and consumers in Japan.
“For the past few years, U.S. beef producers have benefitted greatly from growing demand for U.S. beef in Japan,” said National Cattlemen’s Beef Association President Jennifer Houston. “While Japanese consumers enjoy high quality U.S. beef, they unfortunately pay a higher price for U.S. beef due to the massive 38.5% tariff. Removing that tariff allows more Japanese consumers to enjoy more U.S. beef at a more competitive price. Today’s announcement is welcome news for American families who produce U.S. beef and Japanese families who purchase it.”
For dairy producers, Japan is a market with room for growth. The Japanese market is the fifth largest market for U.S. dairy products, according to the International Dairy Foods Association, which expressed cautious optimism about the trade announcement.
“Although full details of the agreement have not been released, we are confident this deal is a step in the right direction and will help to improve our current market position with Japan,” said IDFA President Michael Dykes. “If we had done nothing, U.S. dairy would continue to be less competitive in a global marketplace where Japan has implemented trade deals with competitors including the EU, New Zealand and Australia. IDFA’s aim with the U.S.-Japan deal was to realize the same tariff-rate reductions afforded the EU and competitors through CPTPP, thereby ensuring American producers and processors remain on a level playing field with our competitors. Without a level playing field for U.S. dairy in ever-growing Asian markets, we will continue to cede valuable market share to global competitors.”
“This enhanced access into the Japanese market is welcome news. Japan represents a rapidly growing market, and without a trade deal, our competitors are poised to seize valuable market share from U.S. dairy,” said Tom Vilsack, president and CEO of USDEC.
“Today’s news is not the end of the road though; it’s the first leg of the journey,” said Jim Mulhern, president and CEO of the National Milk Producers Federation.
“I’m glad to see some progress made on tariff reductions in this agreement that will help American farmers and ranchers catch up on some of the access we lost when the administration pulled us out of the Trans-Pacific Partnership,” said House Agriculture Committee Chairman Collin C. Peterson, D-Minnesota. “It’s only a piece of the puzzle though, and additional agreements with Japan will be needed to make all of US agriculture competitive.”
“I’m optimistic that this agreement will allow our farmers and ranchers to successfully compete in this critically important agriculture market,” said Sen. Pat Roberts, R-Kansas. “The U.S. has been at a disadvantage with other countries in the Trans-Pacific Partnership and this is a positive step towards restoring desperately needed market access.”