Copy of Sentinel V22 #43-Some June D.C. Highlights
- Steve Dittmer
- Jul 22
- 3 min read
Possible EU-US deal on NTB, Japan Stalled
Steve Dittmer | AFF Sentinel
Colorado Springs, CO
Originally sent to subscribers 06/23/25
There has been talk in the general media that a deal could be close with the EU on non-tariff trade barriers. To the beef industry, of course, that goes to USTR Jamieson Greer’s promise that he understands the industry’s frustration with the EU’s refusal to accept almost all American beef.
We looked up the USTR trade document outlining goals for an EU agreement:
“With respect to SPS (sanitary and phytosanitary specifications), ensuring that the rules governing agricultural and food products are based on science and do not pose unwarranted obstacles to trade is as important to American farmers and ranchers as eliminating tariffs and quotas. If we successfully address certain SPS barriers in T-TIP, Europeans will be able to enjoy safe, high-quality U.S. beef, pork, poultry, and other products that we currently ship to consumers all over the world. In addition to eliminating barriers and opening markets for our farmers and ranchers, we seek to have the EU provide greater regulatory transparency and to engage in regular dialogues to help prevent barriers from being erected in the first place.”
That is a pretty good outline of what we hope for. But there has been no mention of beef regulations in the stories we’ve seen. We will see what develops.
Shift to retail from casual dining
With cattle and boxed beef prices at record levels, it’s important to monitor consumer behavior. Evidently, the cost of eating out is driving consumers to eat at home more. Kroger -- the nation’s biggest retail chain by sales -- raised its outlook for the year, citing such a shift. But adjustments have to be made. While closing 60 underperforming stores, they plan to open 30 new stores.
Sales were up 3.2 percent for the 2nd quarter. Net income was down but for the year, they raised their sales to increase to 2.25 to 3.25 percent.
Meanwhile, the number of the largest casual dining chains dropped by 1.2 percent last year, the biggest drop in unit numbers since 2020. Several of the largest chains have closed some locations or filed Cha;ter 11, as traffic has slowed with economic tightening for some consumers.
But the good news for the beef industry was still coming from restaurants we’ve written about before: Chili’s and Texas Roadhouse. A Wall Street Journal article noted that both chains have emphasized “high service levels in a fun atmosphere, with good prices.”
Foodservice tracker Technomic noted Gen Z customers’ interest in sit-down restaurants hasn’t waned, especially for ones they grew up with.
Japan Trade
Negotiations with Japan “remain in a fog,” according to Japan’s chief trade negotiator. There is currently a suspension of tariff imposition until July 9th. Japan has elections coming up July 20. Japanese automakers have been suffering and they depend heavily on the U.S. market. A 25 percent tariff on autos, car parts, steel and aluminum that is been in place has been hammering key Japanese industries. A 24 percent on other items are slated to commence if no deal is reached by July 9. The general 10 percent tariff levied on all countries is still in place.
Japanese Prime Minister Shigeru Ishiba described the situation as “a national crisis.”
There is a chance of an extension. Concessions on agriculture are rated as sensitive ahead of their election. We don’t have anything on plate that we are aware of.
Overall Japanese export totals were down in May for the first time in eight months.
Japan is aiming to persuade President Trump to remove those tariffs on autos, steel and aluminum. Trade negotiator Ryosei Akazawa is coming to Washington this week to meet with Bessent and Greer.
Also, another issue is not directly related but it is possible there could be difficulties because of the U.S. demanding that Japan raise its defense spending. They have asked for 3.5 percent of GCP from three percent awhile back, from the slightly less than two percent they have been doing.
Japan recently cancelled a meeting planned for mid-July to discuss that issue.
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