TOKYO (The Japan News/ANN) — Many distribution businesses are welcoming the new trade agreement between Japan and the United States, which they expect to reduce tariffs on U.S. agricultural products.
However, discussions over eliminating U.S. tariffs on Japanese automobiles are to continue and the automotive industry remains worried that the United States is considering imposing additional tariffs for national security reasons.
One item expected to benefit from the new agreement is American beef. The current tariff rate of 38.5 percent could drop to 9 percent by fiscal 2033.
“If tariffs are reduced, it’ll be easier for us to procure ingredients. The benefits will be big,” said a representative of Royal Holdings Co., a leading restaurant business that serves American steaks at its Royal Host chain.
“We want to come up with measures that will please our customers, like rewards or price cuts,” said a representative of Pepper Food Service Co., which runs the restaurant chain Ikinari Steak.
Expectations are also high for the elimination of tariffs on U.S. wines. A representative of Aeonliquor Co., which handles wine imports for the Aeon Group, said, “Once things like the date [that the pact] will go into effect are decided, we’ll start thinking about putting American wines on sale.”
“Lower prices could energize the wine market,” a Mercian Corp. official said.
Some Farmers Concerned
While some domestic farmers see opportunities for increasing exports to the United States, others are worried about competition from U.S. products.
Starzen Co., a meat wholesaler that has exported Japanese beef to the United States for more than 10 years, is bullish on the prospect of expanding its U.S. Market.
This is because the maximum amount of beef that Japan can export to the United States at the low tariff of 4.4 U.S. cents (about ¥5) per kilogram is expected to be expanded from the current 200 tons per year to about 65,000 tons. The new limit covers total exports from several countries.
“If a lot of high-quality U.S. beef comes in, Japanese beef will be at a disadvantage,” said a 41-year-old livestock farmer in Maebashi with about 150 cattle.
A rice farmer in their 40s from Niigata Prefecture had complicated feelings about shelving the tariff-free quota for imported rice, saying, “It’s good that the Japanese market will be protected in the short term, but it won’t necessarily last over the medium to long term.”
Talks on Auto Tariffs to Continue
Tomomi Nakamura, president of Subaru Corp., which sells about 60 percent of its automobiles in the United States, was pleased that vehicles exported to the United States would avoid high tariffs. “I’m grateful that the agreement was signed,” he told reporters in Tokyo on Tuesday.
However, talks are expected to continue regarding the Japanese government’s request that the United States eliminate its 2.5 percent tariff on passenger cars and auto parts.
“I hope the certainty of future production and employment in Japan will be maintained and strengthened,” said Noritada Okano, chairman of the Japan Auto Parts Industries Association and chairman emeritus of Riken Corp.
the United States is the largest destination for big Japanese carmakers. In 2018, Japan exported 1.73 million vehicles to the United States, or about 20 percent of its production.
“Even having avoided punitive duties, I don’t feel reassured,” a representative of an auto parts maker said.
“The risk that the administration of [U.S. President Donald] Trump will use tariffs as a negotiating card has not gone away,” said Masaki Kuwahara, a senior economist at Nomura Securities Co.
By Kentaro Matsumoto and Hironari Akiyama