The United States criticizes Japan’s rice tariff as “up to 700%”

On March 11, the Trump administration of the United States singled out Japan for imposing a tariff of “up to 700%” on rice. This figure does not seem to take into account Japan’s mechanism for allowing a certain amount of duty-free imports, and the tariff rate is also based on the original level more than 10 years ago. This may cause opposition in Japan.

White House spokesman Levitt said at a press conference that “Japan’s rice tariff is as high as 700%”, and used it as a representative product of high tariffs imposed by trading partners.

White House trade adviser Navarro also criticized in an interview with Fox News on the 11th that “Japan’s 700% tariff is crazy.” Fox host Jesse Waters responded that “we defeated that country in World War II and even established a base there.”

The data cited by Navarro and Levitt are not accurate. Japan has adopted a “minimum access” mechanism that allows zero-tariff imports of rice. Currently, Japan imports and sells 770,000 tons of rice duty-free.

Tariffs are required when importing outside the minimum import quota framework. Japan has adopted a mechanism of levying taxes based on weight, with a tariff of 341 yen per kilogram. There are also countries overseas that display tariffs in terms of tax rates. When negotiating with the World Trade Organization (WTO) in 2005, the Ministry of Agriculture, Forestry and Fisheries of Japan converted the tariff amount into a tax rate. Considering factors such as the international market conditions of rice at the time, the tariff rate was said to be 778%, so the “700%” mentioned by Levitt may refer to this number.

However, as the international market conditions change, this conversion value is also changing. Considering the narrowing of the price difference between domestic and foreign rice, the Ministry of Agriculture, Forestry and Fisheries of Japan recalculated and revised the actual tariff rate to 280% in 2013.

Recently, the actual tariff rate calculated simply compared with the international rice market is expected to be more than 400%.

Rice is the biggest “forbidden zone” in past Japan-US trade negotiations such as the Trans-Pacific Partnership Agreement (TPP), and the United States has long been asking Japan to revise its tariff system. Representative Greer of the Office of the United States Trade Representative (USTR) has also been saying that it will work hard to increase US rice exports.

The U.S. International Trade Commission (ITC) estimated in a survey released in March that if Japan expands its duty-free import quota, U.S. rice production would increase by up to 120,000 tons, mainly from California.