02/09/2022

U.S and Japan Reach TRQ Agreement – U.S. Section 232 Tariffs on Steel Imports Lifted

On February 7, The United States and Japan announced a new agreement whereby Japan can export up to 1.25 Million tons of steel to the U.S without being subject to the current 25% additional duties imposed in 2018 under Section 232. It is important to note that this new agreement does not change the current Section 232 10% duties on aluminum.

Under the agreement, the United States will implement a tariff-rate quota (TRQ) on steel imports from Japan, effective April 1, 2022. Under the TRQ, the aggregate annual import volume is set at 1.25 MMT under 54 product categories (set forth in an annex to the Agreement) and allocated in line with the 2018-2019 historical period. In order to be eligible for duty-free treatment under the TRQ, steel imports must be “melted and poured” in Japan; the agreement also allows that imports of derivative articles of steel from Japan will not be subject to Section 232 duties. The Department of Commerce will continue the exclusion process for steel products imported from Japan. Beginning in July 2022, the United States will evaluate the utilization and administration of the TRQ on a quarterly basis and will conduct an annual review to calculate the level of U.S. steel demand to either increase or decrease the TRQ volume.

According to the statement issued by the United States Trade Representative Katharine Tai, “Since Day One, the Biden Administration has been committed to working with our allies and partners to address shared challenges. In reaching this agreement with Japan, one of our most important trading partners, we are taking another step forward in our mission to rebuild and revitalize these important relationships. “This agreement, combined with last year’s resolution with the European Union, will help us work together with Japan to combat China’s anti-competitive, non-market trade actions in the steel sector, while helping us reach President Biden’s ambitious global climate agenda.

“Importantly, this agreement represents an important example of our worker-centered trade policy in action. It will defend opportunities for a vital American industry, our workers, and their families as we work to deliver trade policies that can unlock broad-based economic prosperity and growth.”

A copy of the agreement can be found here.

For further information or to discuss your specific import needs please contact your V. Alexander Account Team or our Trade Compliance Team at tradeinsights@valexander.com, and follow us on our website www.valexander.com for updates on this and other topics.

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