Trade levies ‘can beef up our opportunities’
While most of the world shudders at the prospect of looming tariffs imposed by Donald Trump, some of Australia’s cattle producers see it as a positive opportunity.
Australia’s cattle producers are hoping they can expand booming beef exports into the US in the face of Donald Trump’s threat to impose tariffs on the country’s trading partners.
The optimism of Cattle Australia chairman Garry Edwards comes as Foreign Minister Penny Wong is in Washington lobbying Republicans to exempt Australia from any possible punitive duties.
Ahead of his second term, Mr Trump proposed immediate universal tariffs on all goods entering the US, but since his inauguration this week he has said it would likely be targeted at countries whose actions threatened US interests, in particular Mexico and Canada, and those with which the US had a trade deficit.
The spectre of import duties has caused significant concern in Australia’s cattle industry, which was last year the biggest supplier of beef into the US and has a significant trade surplus with the superpower, which is rebuilding its cattle herd after years of drought.
Australian beef exports to the US grew 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.
Mr Edwards told The Australian the Trump presidency posed significant opportunities for Australia’s cattle producers and that the close relationship between the two countries should help policymakers advocate to keep Australia free from punitive tariffs.
“The discussion is really about how to maintain our relationship with the US and the position as preferred supplier,” Mr Edwards said. “Many other countries around the world would love to have the relationship that Australia has with the US.
“I think the likelihood is that Australia is a beneficiary of what happens with the new President.
“There is very positive potential for what we can do, but that is predicated on having responsible people in government and making sensible decisions.”
Mr Edwards said the considerable alignment between the two countries’ cattle markets was demonstrated by recent American inquiries to export live cattle from Australia into the US to help bolster their local stocks.
With Canada and Mexico both among the top five suppliers of beef to the US, Mr Edwards said tariffs on those countries could create further demand for Australian meat. “I’m sure our meat processors will find a way of providing them with product,” he said.
Australia has a 20-year-old free-trade agreement with the US and, as a whole, imports more goods from the US than it exports to it, which analysts say will bode well in Mr Trump’s calculations.
As will the weak Australian dollar, which has made Australian produce, including beef, significantly cheaper for US buyers.
Mr Trump’s “America First Trade Policy”, released on the day of his inauguration, directed 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 deficits”.
Asked about the potential of Australia dodging tariffs after her meeting with US Secretary of State Marco Rubio, Senator Wong said the new administration recognised the benefit of its trade relationship with Australia.
“I have focused very much on articulating why Australia’s economic relationship with the US is of benefit to the US as well as to Australia,” she said. “That is recognised, focused on the benefit that the economic partnership brings in particular sectors to the US.”
Senator Wong said the Turnbull government had been able to successfully carve out Australia from tariffs imposed during the first Trump presidency.
“What I can say to Australians is we will work consistently, confidently, with a very clear focus on Australia’s interests to navigate any trade issues,” she said.
Jim Chalmers said he was confident in the ability of Australia to navigate the changes in policy.
“The very close partnership between Australia and the US and particularly the close economic partnership, benefits both sides,” the Treasurer said. “(In) matters of trade, it’s important to remember the US maintains a substantial two-to-one trade surplus with Australia.”
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