They say for every action there is a reaction. We are seeing an example of that as Japan prepares to increase its tariff on us frozen beef from 38.5 percent to 50 percent.
U.S. frozen beef exports to Japan have topped 30 percent of their imports more than enough to automatically trigger the increase in place to protect local producers.
Obviously U.S. beef is popular in Japan.
While it remains to be seen what impact this will have on U.S. beef prices, the message is clear: lack of trade agreements leave us vulnerable to these types of protectionist moves.
The U.S. and Australia account for 90 percent of Japan’s frozen beef imports. Australia provides more than 50 percent of Japan’s frozen beef, but they are exempt from the tariff increase because they have a free trade agreement with Japan that is reducing tariff levels.
“Repeal” and “replace” are terms often used in the health care debate, but they also apply to trade. The decision by the Trump administration to pull out of the Trans-Pacific Partnership (TPP) repealed the deal for the U.S., but we are still waiting for the bilateral deals to replace it.
The pressure on the Trump administration increases as other countries form trade alliances without the U.S. As we have seen with healthcare, it’s one thing to criticize the current plan but you need to have something better to take its place.
No deal is better than a bad deal, but in this case no deal is a bad deal.