Farmers lobby to avert Trump trade tariffs

Producers and countries around the world breathed a sigh of relief when Donald Trump did not introduce blanket tariffs on the first day of his presidency, as promised.

US President Donald Trump signs executive orders in Washington on Tuesday. Picture: AFP

Australian farmers are anxiously watching the opening days of Don­ald Trump’s second term to see whether he implements promised tariffs on imported food and agricultural goods.

During the election campaign, Mr Trump threatened to put a blanket 10 per cent duty on all goods exported to the US but after he was elected in November, he channelled his focus towards China, Mexico and Canada.

Upon re-entering the White House, Mr Trump said he would make a decision by February 1 about whether to implement 25 per cent duties on neighbouring Mexico and Canada.

Instead of announcing other trade restrictions, he issued a presidential memo directing the commerce and treasury departments and the US trade representative to investigate the causes of trade deficits and “unfair trade practices by other countries” and to “recommend appropriate measures, such as a global supplemental tariff or other policies, to remedy such deficits”.

Analysts say it is so far good news for Australia, which has a 20-year-old free-trade agreement with the US, but there is still significant unease for the beef industry, which grew exports to the US last year by 60 per cent to 394,716 tonnes, making it the industry’s biggest trading partner in a year of record high exports. The US is also a significant market for Australian sheep and goat meat.

Agricultural industry groups have been lobbying in Canberra to urge the Albanese government to find a way to carve out Australian agricultural exports from any possible tariffs.

National Farmers Federation president David Jochinke backed the government’s pre-emptive discussions with the Trump administration and said import duties imposed on any goods or countries could have global ramifications.

“The interests of Australian farmers are best served by a free and open global trading environment,” he said. “Any trade restrictions on agricultural exports to the US would obviously cause disruptions for Australian producers.

“The NFF, along with its members, has been engaging with government officials in a considered and proactive way. We are also monitoring closely any broader impacts in other key export markets for Australian agriculture.”

RaboResearch Australia and New Zealand general manager Stefan Vogel said there were concerns in the beef sector about the high volume of Australian imports as the US cattle herd rebuilds from drought. “They’re importing a lot of Australian beef; more than our traditional top markets,” he said.

“The fear is what happens to our Australian beef. We don’t expect right now that the beef market will be hit with extra duties … and we are a bit more relaxed after Mr Trump said he’d investigate first before putting duties on.”

Mr Vogel said the weak Australian dollar could be favourable to our chances of dodging tariffs.

The grains industry is also watching, with concerns that US duties imposed on Chinese goods would result in retaliatory action from China, which could unbalance global markets as it did for soybeans and canola last term.

ANZ executive director for agribusiness industry insights Michael Whitehead said any duties on Canada or Mexican produce could affect Australia by disrupting global beef, canola and wheat markets but Mr Trump would be wary of any tariffs that would raise food prices for US consumers and conscious of supporting rural voters who backed his return to office.

“Tariffs on Canada and Mexico would have big implications for agriculture, given the amount of beef and canola they export,” Mr Whitehead said. “Whether that happens, and to what products the duties apply, remains to be seen.”

An Australian Meat Industry Council spokeswoman said the industry was working with members, government and the supply chain to manage trade risks across all markets.

“The US is an important, longstanding and valued export market for Australian red meat,” she said. “AMIC expects to maintain a strong, mutually beneficial trade relationship with the US.”