U.S. and Japan set to announce steel trade deal

Under the deal, a limited amount of Japanese steel will be allowed to be imported without the 25% levy imposed by President Donald Trump in 2018. If Japan exceeds that amount, the tariff would revert. Japan is one of the top 10 sources of steel for the United States, but accounts for only about 4% of all steel imports, according to the Commerce Department.

The deal does not apply to aluminum, on which Trump has also imposed tariffs. It follows an agreement last year between the United States and the European Union to ease Trump-era metal tariffs.

Trump imposed the steel and aluminum tariffs citing national security, and that caused some countries to impose retaliatory tariffs on their own products.

The move comes as the White House grapples with runaway inflation and a shortage of goods — issues exacerbated by the coronavirus pandemic. The president faces limited options when it comes to addressing the global supply chain issues at the heart of soaring prices, but lifting tariffs is something in his power that could alleviate the problem.

It would also be a blow to China by strengthening US trade ties with Asian allies. The president has made the fight against China a centerpiece of his administration’s overall domestic and foreign policy strategy.

Biden has decided to leave tariffs in place on $350 billion worth of Chinese goods, including baseball caps, luggage, bicycles, televisions and sneakers, which were imposed by Trump. Some of these tariffs, which are paid by US importers, have been in place for almost four years.

The president is facing pressure from the US business community to scrap them as companies battle inflation and supply chain disruptions – but it’s becoming clear China hasn’t delivered on purchase commitments it made in a deal with Trump in 2020. Biden recently suggested that’s why he’s leaving tariffs on Chinese-made products in place.

While the tariffs imposed by the Trump administration were widely unpopular, the steel industry strongly urged Biden to keep the tariffs in place. They argued that tariffs have been key to keeping the sector afloat during the pandemic. Removing them might prove unpopular among steelworkers in the Rust Belt battleground states.

The United States struck a similar deal with the European Union in October, which eased Trump-era sanctions on aluminum and steel. As part of the deal, the EU also agreed to remove retaliatory tariffs on U.S. products, including Harley-Davidson motorcycles and Kentucky bourbon. Talks between the United States and the United Kingdom on steel tariffs are also underway.

This story has been updated with additional information.

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