Food and other agricultural imports into the U.S. appear to have partially avoided a new 10% tariff imposed by President Donald Trump on all imports. That’s because goods that comply with the U.S.-Mexico-Canada Agreement (USMCA) are expected to be exempt from the new tariffs. However, non-compliant goods will be subject to a 25% tariff, with exceptions for energy and potash from Canada. Trump imposes even higher tariffs on nations the White House considers bad actors. He imposes a 34% tariff on Chinese imports on top of the existing 20% and says he will impose a 20% tariff on imports from the European Union and a 24% tariff on Japanese imports. Beef and cattle from Canada and Mexico appear to be exempt from tariffs but the danger is whether countries will impose retaliatory tariffs on U.S. agricultural and other exports. Most of the tariffs took effect on April 5.
The impact of retaliatory could be huge, given the integrated nature of the North American meat and livestock industry. Regarding cattle, 780,000 head moved from Canada to the U.S. last year, with 80% of them fed or non-fed cattle for immediate slaughter. The U.S. represents 15% of Canadian fed cattle marketings. Any increase in price might have caused packers like Tyson Foods or JBS to procure fewer cattle for their Pasco, WA, and Souderton, PA, plants, respectively. Mexico in 2024 exported 1.24 million feeder cattle to the U.S. Most of these enter southern Plains and Southwest feedlots, which have long been dependent on Mexican cattle to fill their pens.
U.S. meat exports are at risk
On the beef side, one-quarter of all Canadian beef production goes to the U.S. Net exports to the U.S. after U.S. exports to Canada amount to 20% of Canadia beef production. Imports last year totaled 1.013 billion pounds. Beef imports from Mexico last year totaled 597 million lbs. Any retaliatory tariffs would threaten U.S. meat exports to the two neighbors. The U.S. last year exported $5.683 billion of beef and pork to the two countries, with $1.35 billion of beef going to Mexico and $877 million of beef going to Canada.
Australian beef, sheep meat and goat meat exports to the U.S. will be exposed to the 10% tariff. While the size of the tariff is at the upper end of the scale anticipated by Australian stakeholders, a long list of other countries exporting goods to the U.S. will be subjected to tariff impositions much higher than Australia’s 10%, says Beef Central’s Jon Condon. Major beef export competitor Brazil will also sit among the baseline trade partner countries on 10%. But it remains unclear whether that will be stacked on top of Brazil’s existing 26.5% tariff on beef exports to the U.S., having triggered its annual quota back in January.
On lean beef trimmings used to make U.S. hamburgers, it is estimated that the tariff on Australian product will cost the U.S. consumer $180 million per year, says Condon. He noted that Trump singled out Australian beef for mention in his White Houses announcement Wednesday. Australians are wonderful people “but they banned American beef—yet we imported $3 billion worth of Australian beef last year alone,” he said.
Response by major U.S. meat and livestock trade groups to the tariff announcement Wednesday was largely muted. The executive order issued by the White House definitely provides more clarity on the administration’s approach to reciprocal tariffs, and the U.S Meat Export Federation (USMEF) appreciates the White House bringing attention to the markets in which U.S. exports face significant trade barriers, said Dan Halstrom, USMEF president and CEO. USMEF also appreciates that the U.S. is maintaining zero duties on USMCA-compliant products. USMEF’s main concern continues to be how trade partners will react. USMEF is hopeful they will focus on eliminating trade barriers rather than imposing restrictive countermeasures, he said.
The Meat Institute, which represents U.S. meat and poultry processors, confirmed it would work with the Trump administration on ways to increase market access for meat and poultry products. Over the coming days, it will work with its members to understand the impact to the industry as tariffs and retaliatory tariffs take effect, said president and CEO Julie Anna Potts.
The National Cattlemen’s Beef Association (NCBA) provided a strongly worded statement about trade barriers on U.S. beef. For too long, America’s family farmers and ranchers have been mistreated by certain trading partners around the world, said NCBA’s Ethan Lane. “President Trump is taking action to address numerous trade barriers that prevent consumers overseas from enjoying high-quality, wholesome American beef. NCBA will continue engaging with the White House to ensure fair treatment for America’s cattle producers around the world and optimize opportunities for exports abroad,” said Lane. — Steve Kay, WLJ columnist
(Steve Kay is editor/publisher of Cattle Buyers Weekly, an industry newsletter published at P.O. Box 2533, Petaluma, CA, 94953; 707-765-1725. Kay’s Korner appears exclusively in WLJ.)
