In the U.S., we import and export beef. The beef we import has little or no tariffs, depending on what kind of trade agreement we have with any given country. The beef we export has a range of tariffs, also determined by what kind of trade agreement, if any, we have with a country. We currently don’t have a free trade agreement with Japan, the biggest importer of U.S. beef. Erin Borror is an economist for the U.S. Meat Export Federation.
“When we ship product to Japan we pay thirty-eight and a half percent tariff or that Japanese importer pays that tariff on U.S. beef. So you can imagine, that’s a huge tax, right, thirty-eight and a half percent, and Australia, through their free trade agreement their tariff is twenty-seven point two percent, and so we have a big difference there.”
Borror explained that Japan has a safeguard in place when certain imports increase over a threshold.
“Now frozen U.S. beef going to Japan pays a fifty percent tariff, five-zero versus Australia’s twenty-seven point two as of August first. And so, through TPP, through all free trade agreements that Japan has negotiated, they have changed the safeguard mechanism so that would not have happened. But today our producers will face this disadvantage all the way through March of 2018.”
Borror says that the good news is that the fifty percent tariff only applies to frozen beef.
“We’re sending as cold as you can get without freezing product to Japan and that’s used at retail and food service so it’s the high end products, and that’s really where our strong growth is. We’re growing by forty percent year over year right now.”
Borror points out that the U.S. is blessed to be the bread basket for not only our country, but for the world.
“Yes it’s a big world, but it’s still kind of small when you look at who has the resources to really produce beef cattle, especially the quality of beef cattle that we have in this country. And so it’s a bright future, but yes were are a bit vulnerable because obviously trade is, there are always risks in everything, but it’s something that we certainly can’t live without, so we have to just keep on fighting as American agriculture because we are so productive and that is our future.”