GLOBAL red meat supply and demand trends are hard enough to predict at the best of times, but latest impacts from tariff wars between the United States and a growing list of trading partners, and market access issues for US beef into China are only adding to current trade uncertainty.

“The fact is, nobody in the trade is confident that they have a clear indication of what lies ahead, and it’s being reflected in buying behaviour,” one trading desk contact told Beef Central this morning.

Firstly, here’s the back-story.

Since February, the US has imposed new tariffs on imports from Canada, Mexico and China, citing a ‘national emergency’ under the International Emergency Economic Powers Act. The measures were aimed at addressing perceived threats to US national security, such as the flow of fentanyl through US imports and to protect American industries from unfair competition.

Chinese imports were hit with new 10pc tariffs on February 4, which were doubled to 20pc a month later. Trump had already imposed tariffs of up to 25pc on Chinese imports in his first term; the new tariffs are on top. China responded with a warning that it’s ready for “a tariff war, a trade war or any other type of war,” which it said “it will fight till the end.”

Tariffs of 25pc on Canadian and Mexican imports took effect on March 4. But Trump later signed an order that exempted imports that were covered by a previous trade deal, and applied a one month extension to April 2 on the start of the next round of tariffs on some goods.

Canada was one of Trump’s early tariff targets, and tit-for-tat retaliatory measures on both sides have escalated into an all-out trade war, which outgoing Canadian Prime Minister Justin Trudeau said could last for the “foreseeable future.”

Tariffs of 25pc have been applied by the US on Australian steel and aluminium exports, taking effect earlier this week following Australia’s failure to secure a tariff exemption from the US. There are concerns other Australian industries (like beef) could be caught in the crosshairs, despite Australia running a significant trade deficit with the US. See yesterday’s story on this topic.

China licences for US beef exporters still in jeopardy

On top of the tariff wars issue, considerable uncertainly remains about US beef access to China, following delays in Chinese renewal of US processor licences.

There’s a requirement for food exporters to register with China General Admission of Customs to sell products into the world’s largest meat importing country.

The authority’s website showed registrations for more than 1000 US meat plants granted by China under the 2020 ‘Phase 1’ trade deal, which lapsed last Sunday. That was roughly two-thirds of all those registered.

The trade deal ended the previous US-China trade war with a pledge from Beijing to boost its purchases of US goods and services, including meat, by US$200 billion over two years. China did not reach the target, which was agreed shortly before the arrival of COVID.

The US Department of Agriculture earlier said China did not respond to repeated requests to renew the lapsed US plant registrations.

Pork, chicken re-approved

However on Sunday, China renewed registrations for hundreds of US pork and poultry facilities to continue export to China, for a period of five years. Significantly, several hundred beef exporters licenses were not renewed, and remain in limbo.

US beef shipments from facilities with lapsed registrations continued to clear Chinese customs this week, but US exporters were unsure how long that would last.

“We’re pleased to see progress on the pork facilities and hoping for similar news on beef as soon as possible,” US Meat Export Federation’s Joe Schuele, told local media yesterday.

Beijing imposed retaliatory tariffs on some $21 billion worth of American farm goods this month, including 10pc duties on US pork, beef and dairy.

US beef exporters shipped about 170,000t of beef to China in 2024. Over the same period, Australia shipped slightly more, at 193,000t, down a little on the previous year.

An industry analyst in the US noted in a report to investors that uncertainty around US beef exports to China would remain until the registration status was confirmed.

If any suspension on US beef licences was to continue, Australia would clearly benefit. Trade sources in Australia have developed the view that China’s reluctance to re-issue US beef access licences is directly linked to the current tariff friction between the two.

“It’s just part of the Chinese negotiation tactic,” one contact said. “Anything they can do to create some uncertainty and put some pressure back on the US government is being used in the current environment,” he said.

Threats undermine global beef trade

While Australian beef has not yet been drawn into the US import tariff world, nobody we’ve spoken to has been prepared to rule out the possibility at some point. On top of that, the US has revived interest in gaining unfettered access to the Australian beef market (see yesterday’s report).

Experienced Australian meat traders told Beef Central this morning that uncertainty was the defining characteristic in international beef trade circles this week, as two-way tariffs and US market access challenges into China impacted customer thinking in Asia, North America and elsewhere.

“The fact is, nobody is confident that they have a clear indication of what lies ahead, and it’s being reflected in buying behaviour,” one trading desk contact said.

Australian imported lean manufacturing beef prices into the US reached a new record high on Friday, hitting A10.85/kg. However that’s not being seen as reflective of latest trade uncertainly, but simply the rally in manufacturing beef prices that started around the middle of last year, as US cow slaughter rates decline. US cattle slaughter year to date is now down 418,000 head or 6.4pc on the same period last year.

“The tariff discussion within the US beef import community is definitely having an effect,” the trader said this morning, pointing out that the tariffs themselves are applied on US importers, not on exporters.

“Anxious, nervous, uncertain are the words that come to mind,” he said.

“They (US importers) are definitely risk-averse at present. If they are thinking it likely that further Trump tariffs will be applied early next month, they might feel it’s better not to buy, until that clarity is provided. Buy a consignment out of Australia this week, and a tariff on beef might be applied while the beef is on the water. It’s just creating uncertainty – along with what’s happening in the US stock market, and interest rates etcetera.”

“All that is heavily impact consumer confidence in the US at present, what is not helping the beef situation. That’s probably not happening at retail yet, but it is in the food service segment.”

Nor was there any clear evidence yet of growing buyer demand out of China for beef, if US exporters are in fact denied access.

“It’s still too soon to gauge that, but we’re not getting inundated with calls from China, at all, at this point,” the trader said.

US retail prices rising

Meanwhile the US Department of Agriculture has released its latest Food Price Outlook, forecasting changes in both consumer and producer prices for key food items, including beef, veal, pork, poultry and eggs, and dairy products. These forecasts provide insight into what shoppers can expect at the grocery store and what producers may face in terms of costs and profitability.

Retail beef and veal prices are predicted to increase 3.2pc in 2025, while wholesale beef prices are predicted to increase 4.6pc and farm level cattle prices, 6.9pc (off what are already incredibly high levels).

While price increases in 2024 were moderate, the USDA expects steeper rises in 2025 as supply constraints persist. The forecast rises were due to multiple factors, including higher feed costs, drought conditions affecting cattle supplies and increased demand. Curiously, the report makes no mention of potential tariff impact.

“US consumers may need to adjust their shopping habits, potentially opting for lower-cost cuts or alternative protein sources,” USDA warned.

Steiner’s Daily Livestock Report on Thursday suggested tariffs remained a key concern for US food price direction heading into the northern hemisphere spring/summer, with potential impacts on raw materials across various products.

“In the near term, rising producer-level prices are likely to affect consumer prices downstream,” DLR reported.

“This trend may partly explain the recent price increases in food service. In February, the special food PPI index rose 3.5pc from the previous month, and was 9.7pc higher year-over-year. The last time the food PPI saw such a significant increase was in fall 2022, when the food CPI was also around 9pc year-over-year.”

Ground beef, a US retail staple food item, increased 2.7pc in price in February, compared with the previous month.