US Lambasts Japan’s ‘700% Rice Tariff,’ Hinting at Levy Target #JapanFinance

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(Bloomberg) — President Donald Trump’s administration hit out at Japan’s elevated rice tariffs, signaling that the grain and Tokyo will likely be targeted as the US seeks to apply reciprocal tariffs in the coming weeks.

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“Look at Japan, tariffing rice 700%,” US Press Secretary Karoline Leavitt said Tuesday during a press conference. She pointed to a chart that appeared to list tariff percentages from countries including India and the EU. The chart also showed the tariff rates Japan applies on beef and dairy imports from the US.

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“President Trump believes in reciprocity,” Leavitt said during the press conference largely focused on accusations that Canada applies unfair tariffs on US goods. “All he’s asking for at the end of the day are fair and balanced trade practices.”

The criticism came before extra tariffs on steel and aluminum were set to take effect hours later as Trump forges ahead with a strategy aimed at winning concessions from US trading partners and correcting perceived unfair practices. The US is also lining up reciprocal tariffs and a proposed 25% tariff on foreign car imports from April 2.

Japan and some other key US trading partners have sent officials to Washington in recent days to seek ways to avoid becoming direct targets of the Trump administration’s use of tariffs. Japan’s Trade Minister Yoji Muto concluded his talks with Commerce Secretary Howard Lutnick earlier this week in a failed bid to secure a reprieve.

“We will refrain from commenting on each and every remark made by US officials and will continue to communicate with our US counterparts,” Japan’s Chief Cabinet Secretary Yoshimasa Hayashi said at a press briefing on Wednesday when asked about Leavitt’s comments.

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The complaint over rice also comes as Japanese consumers face an unusual price spike in the staple food that’s caught the attention of the central bank and Prime Minister Shigeru Ishiba, who formerly served as agricultural minister. Hefty rice tariffs, long in place to protect domestic production, have kept imports from easing the price pressure.

Japan currently doesn’t apply tariffs to rice that is imported through a state-managed trading mechanism. The amount of rice bought through that mechanism is capped at 770 thousand tons. A levy of ¥341 ($2.3031) per kilogram is applied to rice imported through non-governmental trade.

According to data from the Finance Ministry, Japan imported 675 thousand tons of rice through the government mechanism and 773 tons of rice through private trade in fiscal 2022. In 2023, about half of the rice imported through the government came from the US.

The 700% tariff figure is not one officially released by Japan’s government, an Agriculture Ministry official told Bloomberg. He added that the government does not release tariff rates as percentages.

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Japan’s tariffs on US rice are about 204%, according to Kenichi Kawasaki, a professor at the National Graduate Institute for Policy Studies who has researched the nation’s levies.

The claim that rice tariffs are 700% may have come from a government document dated 2015, which put tariff rates for non-governmental rice imports at 778% with a footnote saying the figure was calculated based on rice prices between 1999-2001.

Leavitt’s comment throws the spotlight on an area of trade that was also a point of contention between Japan and the US during Trump’s first term as president.

Following US withdrawal from the Trans-Pacific Partnership trade deal in 2017, then Japanese Prime Minister Shinzo Abe set about negotiating a bilateral trade deal with Trump, during which the US sought to increase the cap on US rice that could be imported without tariffs. But Abe successfully batted away those attempts, inking a trade accord in 2019 that kept rice tariffs while agreeing to a reduction of tariffs on other US agricultural imports, such as beef and pork.

—With assistance from Yoshiaki Nohara and Takashi Hirokawa.

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