Australian Beef Exports to U.S. Face 10% Tariff Hike

In the lush southern highlands of Australia, a cattle auction was underway, with a auctioneer standing on a raised platform, shouting bids over the din of nearly 2,000 cattle awaiting purchase. Potential buyers, some wearing Akubra hats, nodded and raised their hands to compete for the livestock, despite the 10% import tariff imposed by U.S. President Donald Trump on Australian goods, including beef.

Australian cattle farmers, traders, and industry organizations have stated that the additional costs from the U.S. tariffs will be passed on to American consumers, leading to higher prices for hamburgers and steaks. Dhugald McDowall, from the livestock agency Elders Cleary McDowall, noted that while the immediate impact on the local market was not yet apparent, the increased costs would make Australian goods significantly more expensive for U.S. consumers in the short term, potentially harming the U.S. economy.

Australia exports a record $4 billion (2.52 billion USD) worth of beef annually to its largest market, the United States. Since 2003, Australia has banned fresh U.S. beef products due to the detection of bovine spongiform encephalopathy (mad cow disease) in the U.S. cattle herd. This ban has been a source of frustration for Trump, who cited it as a reason for imposing tariffs on Australia.

Australian beef is favored by U.S. fast-food chains for its lower fat content, which is blended with higher-fat U.S. beef to create hamburgers with an ideal fat content of no more than 30%, as per U.S. Department of Agriculture regulations. Garry Edwards, chairman of the industry trade body Cattle Australia, stated that while there have been short-term disruptions to Australian exports to the U.S. as producers await tariff details, U.S. buyers will ultimately have to pay more for Australian beef.

Edwards also noted that the U.S. relies on Australian grass-fed beef and some high-quality grain-fed beef to meet domestic consumer demand. He expressed doubt that U.S. consumers would be willing to pay more for their hamburgers or steaks in the foreseeable future. The Australian government has used the industry's role in the U.S. fast-food supply chain as a negotiating tactic.

Australian Trade Minister Don Farrell had previously warned that higher tariffs on beef could increase the price of McDonald's hamburgers, a brand that Trump had publicly supported during his presidential campaign. McDowall pointed out that the tariffs imposed on Australia are the same as those on its export competitors, Brazil and Argentina, which together with Australia and the U.S. make up the world's four largest beef exporters.

Australian Prime Minister Anthony Albanese announced that the government would support industries affected by U.S. tariffs and help them find alternative markets. James Fitzpatrick, a cattle farmer attending the auction, agreed, stating that the U.S. is not the only market available. The industry is now exploring ways to diversify its export markets and reduce its reliance on the U.S.