The U.S. and Japan are set to announce a deal that would cut tariffs on steel. Under the agreement, a limited amount of Japanese steel will be allowed for import without the 25% levy imposed by President Trump in 2018. If Japan goes over that amount, the tariff would return.
Japan is one of the top 10 sources of steel to the United States, yet only accounts for about 4% of all steel imports. The deal doesn't apply to aluminum, on which Trump also imposed tariffs. It follows an agreement last year between the US and the European Union to ease Trump-era metal tariffs.
Trump imposed the steel and aluminum tariffs citing national security, and it caused some nations to impose retaliatory duties on their own products.
"We were pleased the previous administration initiated long overdue Section 232 relief for America’s vital steel industry, and we commend President Biden and his administration for widening the focus on global overcapacity while maintaining appropriate tools to mitigate threats to our economic and national security," stated Alliance for American Manufacturing president Scott Paul in a prepared statement. "As an added measure, Congress should expeditiously complete work on competitiveness policy to bolster our trade laws and establish incentives to re-shore manufacturing jobs and strengthen domestic supply chains.”
This announcement comes amidst a backdrop of soaring inflation and supply chain disruptions. Many economists concede that President Biden has limited options when it comes to addressing global supply chain issues that are at least contributing to, if not causing inflation, but lifting tariffs is something he can do that could help ease the problems.
It could also serve to strengthen American business ties with Asian allies. Biden is making attempts to counter China's growing influence, by among other things, deciding to leave tariffs in place on $350 billion worth of Chinese goods that were imposed by Trump. Some of those tariffs, which are paid by American importers, have been in place for nearly four years.
China has reportedly failed to meet the purchase commitments it made in an agreement with Trump in 2020, with Biden suggesting that's the reason he's leaving the tariffs on Chinese-made goods in place.
The United States reached a similar deal with the European Union in October that eased Trump-era sanctions on aluminum and steel. As part of the deal, the EU also agreed to drop retaliatory tariffs against American products including Harley-Davidson motorcycles and Kentucky bourbon. Talks between the United States and the United Kingdom about steel tariffs are also underway.
*Note - this story is aggregated from multiple sources including CNN, Reuters, The White House and the Alliance for American Manufacturing.