The US government has agreed to grant a quota for steel imports from Japan, partially resolving a bilateral dispute.

While removing the current 25% tariff in general, the agreement establishes a quota to import, duty-free, up to 1.25 million metric tons of steel from Japan.

Above that volume, Japanese steel imports will face a 25 percent tariff.

Also, the agreement did not change the current 10% tariff on US imports of aluminum originating in Japan.

The Trump Administration determined that foreign-made steel threatened to «harm national security» and imposed 25% global tariffs or quotas in March 2018 under Section 232 of the Trade Expansion Act of 1962.

The US Congress delegated some of its authority to regulate trade to the executive branch through Section 232, a statute that allows the president to restrict imports if the Commerce Department finds that the imports threaten or harm US national security.

However, according to a US Congressional analysis, observers noted that US military applications have historically accounted for a relatively small share of annual domestic steel production (3% in 2020, according to the American Iron and Steel Institute, AISI), and expressed concern about the possible negative impact of tariffs on the defense of US allies.

Steel imports

On Monday, US Trade Representative Katherine Tai and US Commerce Secretary Gina M. Raimondo announced the new 232 tariff agreement with Japan to allow historic sustainable volumes of Japanese steel products to enter to the US market without the application of Section 232 duties.

The level is the average of Japanese steel exports to the US market in 2018 and 2019.

According to the USTR, this agreement will help ensure the long-term viability of the US steel industry and protect US jobs.

It’s also part of our efforts to provide relief to American manufacturers who rely on easily accessible and affordable steel to make their products and lower prices for American families.

The agreement will take effect on April 1.