How Trump’s tariffs could adversely affect Australia’s red meat industry

President Trump doesn’t have to impose tariffs for there to be an impact on Aussie red meat prices. The fallout alone could see prices adversely affected.

Australia’s meat industry is carefully monitoring announcements from Donald Trump after the US president followed through on threats to slap tariffs on beef and cattle from Canada.

And while Australia may not be directly affected, the fallout from the trade machinations could still see the nation’s livestock industries adversely affected.

The US is a major customer for Australia’s red meat; last year, the nation imported 395,000 tonnes of beef valued at $4.16bn and 104,000 tonnes of sheep meat worth $1.35bn.

Cattle Australia chief executive Chris Parker said the organisation was “closely monitoring” the situation in the US.

“Promoting free trade and market access is a fundamental issue for Cattle Australia,” Dr Parker said.

“We will continue to work closely with the Australian government in encouraging the removal of trade barriers around the world.”

Cattle Australia chief executive officer Dr Chris Parker.

Australian ministers in the US have been at pains to emphasise the strong and mutually beneficial nature of the Australia-US economic partnership.

Agriculture Minister Julie Collins was aware that trade deficits are a key concern for President Trump but did not see this extending to Australia. The US has had a trade surplus with Australia for more than 70 years.

“Australia is a trading nation, and we will always advocate for free and fair trade for our farmers,” a spokeswoman for the federal government said.

“We will work with the Trump Administration to ensure our free trade agreement continues to benefit both of our countries.”

Sheep Producers Australia chief executive Bonnie Skinner said it, too, was monitoring the evolving trade situation.

“It remains too early to speculate about any tariffs or any trade impacts,” Ms Skinner said.

“The US is a long standing and valued export destination for Australian lamb, and Australia has well-established and positive relationships throughout the American supply chain.”

StoneX Australian livestock and commodities manager Ripley Atkinson was optimistic tariffs would not be imposed on Australian red meat exports.

“The big but to this, for me, is the concern around Australia being collateral damage if the US-China tariffs affect Chinese demand for Australian red meat,” he said.

Mr Atkinson said China was a major trade destination for red meat including in the top four for beef, top three for lamb and goat and the biggest customer for mutton.

”If the US tariffs imposed on China were to detrimentally impact its economy, this could have flow on effects for the Chinese market’s demand for Australian product and that’s where problems arise on price,” Mr Atkinson said.

“It’s like cattle markets – when a buyer steps back from the market this reduces demand and therefore allows for softer pricing due to reduced competition in the marketplace.

“The US is a major market not only on volume but also value, so I think the Australian livestock market would be very sensitive to an announcement like ‘tariffs imposed by US on Australian red meat exports’ and subsequently livestock prices would be under pressure immediately.”

Shipping containers are seen at the Port of Montreal in Montreal, Canada – tariffs are expected to have big impacts on the Canadian beef industry.

Meanwhile Canadian Cattle Association president Nathan Phinney said tariffs would create significant impacts on both the Canadian and American beef and cattle industries.

“We can expect an immediate increase in volatility,” Mr Phinney said.

“The impact of the tariff will be felt by beef producers across North America.

“The tariff will jeopardise American jobs throughout the value chain and will increase costs for citizens of both Canada and the United States at the grocery store and in restaurants.”