The US and Japan have agreed to lift tariffs on about 1.25 million metric tonnes of Japanese steel imports per year imposed by Trump.
Under the terms of the agreement, Japan promises to assist in the reduction of surplus steel supply, which drives down costs.
The deal aims to end “unfair practices” in the world’s steel sector, which is controlled by China.
The Biden administration has already reached an agreement with the EU, but tariffs on UK goods remain in effect.
The deal with Japan, which goes into effect on April 1, “will further assist us in rebuilding relationships with our friends throughout the world as we seek to combat China’s unfair trade practices,” according to US Commerce Secretary Gina Raimondo.
Several nations were hit with tariffs during Donald Trump’s administration, alleging cheap metal imports as a national security danger.
Under the new agreement, the United States will no longer apply a 25% tariff on Japanese steel imports, excluding aluminum, up to a 1.25 million metric tonne annual threshold.
Meanwhile, Tokyo has stated that it will take actions over the next six months to encourage a more equitable steel market, as seen by the US and Japan.
These include a fee to offset subsidies received by an exporter and a tax on items perceived to be priced below market value.
Investment analysts were cautiously optimistic when they heard the news.
“The easing of Trump-era steel tariffs is consistent with hopes that the Biden administration will unify its geopolitical and trade alliances,” Mizuho Bank’s Vishnu Varathan, head of economics and strategy, told reporters.
“However, even the early tariffs did not have a significant impact on China. As a result, this agreement may be more about repairing relationships in the context of a larger trading game “Added he.
A deal between Brussels and Washington went into effect on January 1st, allowing tariff-free shipments of EU steel and aluminum to the United States.
The UK, on the other hand, has failed to negotiate a deal to reduce tariffs on steel and aluminum exports imposed by Trump.
The matter will be handled “when the time is appropriate,” according to US Trade Representative Katherine Tai.