What Brazilian tariffs could mean for Australian beef producers

Brazilian beef could attract a 74.6 per cent tariff in the US – but it may not be good news for Australia.

A proposed 50 per cent tariff on beef exports from Brazil to the US could create an opportunity for greater volumes of Australian product to enter the American market.

However, experts warn that any Brazilian beef displaced from the US could end up competing with Australian product in other key destinations, such as China, as global trade tensions continue to reshape market dynamics.

US President Donald Trump has extended the implementation of reciprocal tariffs until August 1 but warned that Brazil could still face a 50 per cent tariff on all exports to the US, including beef, unless an agreement can be reached.

The US sources beef from a range nations, with Canada accounting for 25 per cent of imports, followed closely by Mexico (22 per cent) and Australia (15 per cent). Brazil is currently the fifth-largest supplier to the US, representing about 10 per cent of total imports.

Despite its modest share in the US market, the US remains Brazil’s largest customer for beef exports. Brazil is home to the world’s biggest commercial cattle herd, with an estimated 239 million head.

StoneX Australian livestock and commodities manager Ripley Atkinson said it was possible Brazil and the US could strike a deal but added the 50 per cent tariff warning was “a big development”.

“Any affect on pricing, once pre-booked shipments land, will have a big effect on prices paid by the importer into the US,” Mr Atkinson said.

“This will seriously challenge the competitiveness of Brazilian imports (into the US).”

Mr Atkinson said Brazil was the biggest supplier of beef into the US during the first five months of the year with 75,200 tonnes — 33 per cent more than Australia.

He said there would beimplications for Australia should the US and Brazil fail to reach an agreement.

“If we assume the 50 per cent tariff rate stays, that’s on top of the 26.4 per cent duty Brazil already pays for out of quota imports for the “other” countries into the US,” Mr Atkinson said.

“That puts Brazil at a total tariff of 76.4 per cent from August 1.

“This dynamic, if it actually occurs and the rate stays, product landing and getting tariffed at 76.4 per cent could really force the US to demand more from Australia but that’s if our rate stays at 10 per cent. Watch this space.”

China is another major market for Brazilian beef and was its biggest export destination in the first half of this year, according to figures published by the Brazilian Beef Exporters Association.

ABIEC president Roberto Perosa said China remained the main destination for Brazilian beef, accounting for 52 per cent of the month’s revenue and 50.1 per cent of volume — equivalent to 136,000 tonnes — in June alone. So far this year, China has imported more than 640,000 tonnes of beef from Brazil.

China was followed by the US as Brazil’s next largest customer for beef exports.

On its website, the Brazilian Confederation of Agriculture and Livestock noted that the relationship with China had “deepened with the approval of 38 new Brazilian meat plants for export to China”.

More than half of Brazil’s beef exports are currently shipped to Chinese ports,” the website said. “The growing presence of Brazilian meat in China results from sustained efforts in quality control, sanitary standards, and certification processes.”