What US tariffs will mean for Australian farmers

Australian farmers face a tense wait with the threat of US tariffs looming over the nation’s ag exports. And the potential fallout could cost billions.

Australian farmers face a tense wait over the next seven days, with the threat of US tariffs looming over the nation’s multi-billion dollar ag exports.

Confusion reigns over whether commodities as diverse as beef, wine and even offal will be hit with tariffs, potentially as high as 25 per cent, from April 2 – President Donald Trump’s so-called “liberation day”.

While Mr Trump had pledged tariffs on all agricultural imports, as well as a raft of goods from other industries, the situation is fluid and solid details have yet to emerge.

On Monday, The White House flagged sector-specific tariffs could now be delayed, with a focus instead on more targeted, reciprocal tariffs aimed at countries with persistent trade imbalances with the US.

That could put a question mark over Australia, which last month ran a trade deficit with the US for the first time in 70 years.

The uncertainty is causing jitters through Australian agriculture, particularly the nation’s livestock markets, with Elders national livestock manager Peter Homann attributing it to the lack of a clear message on what would happen.

“The uncertainty is causing producers to question what they are doing,” Mr Homann said

“It’s making the livestock markets a bit volatile but to be fair, no one knows what is going on.

“You could talk to three different processors and get three different responses – but what I do know is that 300m US people love their hamburgers and they are desperate for our meat.”

However, Mr Homann said the dry season across much of south-eastern Australia was having more of an impact on prices than talk of tariffs.

The US was Australia’s biggest customer for beef in 2024.

The US was Australia’s biggest customer for beef last year, valued by the Australian Bureau of Statistics at $4.385bn.

It was followed by sheep meat (lamb and mutton) at $1.037bn, pig meat at $427.5m and wine at $359.7m.

RaboResearch food and agribusiness senior animal protein analyst Angus Gidley-Baird described the situation as “very unsettling”.

“When you look at Australian livestock markets for beef and lamb, they are still holding but I am sure there are processors with a lot of questions who are working on various scenarios,” Mr Gidley-Baird said.

He said a worst-case scenario was a 25 per cent tariff on beef and lamb, and yet there were “justifiable arguments” for a small tariff.

And while Australia could protest any tariff impost, he said the precedent set with refusing to budge on tariffs on steel and aluminium had shown the hand of the US government.

There were also signs that other markets would not jump in to take beef if US tariffs ruled Australian processors out due to price. This, he said, was evident in that Australian beef was landing in the US at well below the price of locally produced US beef, as Asian countries were not pushing hard to secure product.

“We have a situation where the US could impose tariffs at a time there is a large volume of Australian beef in the market,” he said.

“If Australian exporters feel like they might lose market share in the US due to the tariff, they may decrease the price of Australian beef into the US and wear the tariff here in terms of lower prices (paid to producers).”

Agricultural exports to the United States in 2024.

Over the past five years, the US has taken between 16 and 29 per cent of all beef exports by volume and 17 to 31 per cent in terms of value.

University of Adelaide Professor Peter Draper is executive director of the Institute for International Trade in the School of Economics and Public Policy, and said the US was “making it up as they go along” with tariffs.

Even if Australia was not caught in the first wave of tariffs, Professor Draper said few economists could agree on what might happen.

“We don’t know who they don't like and want to hit (with tariffs),” he said.

“We have virtually no idea of what they are going to do.”

There could be positives from Trump’s tariffs, including opportunities to trade with countries which sourced food from the US and now had imposed reciprocal tariffs in retaliation to the US move. China was one of the key examples.

”China has tariffed US food products, so they have to find alternative sources and are sure to look at Australia,” Professor Draper said.

“But Australia is currently a key US ally … so they might look at Brazil or Africa instead.

“I suspect they will want to source more from Australia but they will want to temper that.”

Victorian Farmers Federation livestock group president Scott Young said the industry was concerned about impacts to prices.

“We need to do all we can to ensure that there are pathways for producers to ensure they get a good return for their livestock,” Mr Young said.

“And the whole industry needs to work together – processors and producers – as we all need each other.”

In New Zealand, another country which targets the US with red meat exports, Beef and Lamb New Zealand senior trade manager Frances Duignan said it was too early to determine if US tariffs would affect New Zealand’s beef and sheep exports.

“What we do know is that we have strong relationships with the US, demand for our products remains high, and we are closely monitoring the situation,” Ms Duignan said.

“We also maintain strong ties with our Australian counterparts, collaborating on a wide range of issues.

“New Zealand has always viewed tariffs as distortions to global markets.

“Ultimately, they result in lower prices for exporters and producers, while consumers face fewer choices and higher costs.”