UNITED States President Donald Trump has delayed the application of punitive 25 percent tariffs on goods from neighbouring Canada and Mexico for a month, while the nations thrash out agreements on trade, people movement and security.
The last-minute move came hours before a midnight deadline was due to see the tariffs come into effect. Mr Trump confirmed on social media that he agreed to a pause after Mexican President Claudia Sheinbaum committed to sending 10,000 National Guard troops to many the US-Mexico border.
Both sides will work on resolving other outstanding issues, likely making a 25pc tariff on Mexican goods or US goods going to Mexico less likely.
At much the same time, Canadian Prime Minister Justin Trudeau said the US tariffs threatened against his country would be postponed by at least 30 days after he promised more cooperation on border security, linked to drugs entering the US.
Last year, the US was estimated to have imported about 790,000 head of cattle from Canada and 1.25 million head from Mexico. Almost all the cattle from Mexico were feeder cattle, whereas around 80pc of Canadian cattle imports were finished cattle headed directly to US slaughter plants.
How will tariffs impact the price of these animals?
“While Canadian and Mexican producers would certainly prefer that US buyers absorb the tariff, the reality will be more nuanced,” Len Steiner’s Daily Livestock report wrote overnight.
“If you are a US buyer of Canadian feeder pigs and their cost suddenly increases by 25pc, your first step would likely be to look for domestic sources, which could drive up prices in certain areas,” DLR said.
For Canadian and Mexican producers, however, the situation is far more challenging. Since NAFTA took effect about 30 years ago, producers in these countries have developed supply chains that are not easily altered. Unlike auto parts, which can be stored for a period of time, feeder pigs, for example, must be moved to a barn on a strict schedule.
This means a negotiated solution would be necessary, DLR said.
“In the long term, the cost of the tariff could lead to a shift in production capacity. Let’s hope that in the next 30 days, all parties find a way to work together and prevent the balkanization of North American livestock and meat markets,” Len Steiner wrote.
China, which President Trump has threatened to hit with 10pc tariff rises, has not released details on retaliatory measures but said it will challenge the US decision at the World Trade Organisation and will also take measures to safeguard its rights and interests.
US tariffs set to test Albanese and Rudd
In Australia, Shadow Minister for Trade and Tourism Kevin Hogan has said the US approach to tariffs was ultimately a test for the Albanese government and Ambassador Rudd.
“The Ambassador to the US is one of the most critical diplomatic roles Australia has. Albanese handpicked Kevin Rudd for this position who had to delete multiple social media posts on derogatory comments he had made about the President Trump,” he said.
“When we were in government, during President Trump’s first administration there were the threats of tariffs on aluminium and steel. We had Ambassador Hockey which helped Australia to successfully negotiate exemptions from United States steel and aluminium tariffs.”
“The US is Australia’s largest economic partner with A$1.17 trillion of Australia’s inward foreign investment coming from the United States. This relationship is central to our economic, security, and diplomatic priorities,” Mr Hogan said.
“Prime Minister Albanese and Ambassador Rudd have a big job on this issue. I hope they are up to it.”
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