United States President Donald Trump has announced plans to impose a 50 per cent tariff on all imports from Brazil — a nation that is currently its number one supplier of beef.
In a letter to Brazil’s president, Mr Trump said the tariffs were “due in part to Brazil’s insidious attacks on free elections” and claimed the treatment of former president Jair Bolsonaro was a “witch-hunt” and “international disgrace”.
“[However], there will be no tariff if Brazil, or companies within your Country, decide to build or manufacture product within the United States,” Mr Trump wrote.
The tariffs are due to take effect on August 1.
Brazil, led by Luiz Inacio Lula da Silva, is a significant trading partner of the US. (Reuters: Adriano Machado)
US-based Global AgriTrends meat analyst Brett Stuart said for Brazil’s beef industry, the proposed 50 per cent tariff would become an import tax of 76.4 per cent, as it already incurs a 26.4 per cent duty once it exports more than 65,000 tonnes — a quota that was triggered in late January.
“In May this year, Brazil exported a record amount of beef into the US despite the 26.4 per cent tariff, plus Trump’s 10 per cent [Liberation day tariff],” he said.
“But at 76 per cent that is just untenable, that’s unworkable.
“If Brazil doesn’t find a way out of this by August 1, Brazilian beef exports to the US will halt.”
Mr Stuart said Australia would be an obvious winner if Brazil bowed out of the US market.
“I think overnight, Australian and New Zealand beef prices will see sharp demand … the phones are going to be ringing if this happens,” he said.Loading…
The US cattle herd is at its lowest level since the 1950s because of drought and US beef prices are at record highs, which has seen its reliance on imports climb.
“Right now, if you look at the price of lean beef in America versus the imported product from Australia, there’s a discount,” Mr Stuart said.
“But if Brazilian beef is no longer flowing into the US that discount would vanish quickly because American importers would be turning aggressively to Australia and others.
“I don’t think we’ll see a big shift in bids for Australian beef next week, but if that August 1 deadline passes and Trump says it’s on, that could change quickly.”
Lean beef prices are at record highs in the US. (ABC Landline)
Record Australian beef exports
Australia is already processing a record amount of cattle and producing a record amount of beef this year.
According to Meat and Livestock Australia (MLA), a record 134,593 tonnes of beef was exported last month and year-to-date Australia has exported 702,218 tonnes, which is up 17 per cent on this time last year.
The biggest customers this year have been the US (203,072 tonnes up 31 per cent), followed by China (147,391 tonnes up 39 per cent).
China has still not renewed export licences to about 300 abattoirs in the US and has been buying plenty of Australian beef instead.
And it might soon find itself ramping up orders of Brazilian beef.
“If Brazil loses the US market, Chinese importers are going to be getting a deal on Brazilian beef,” Mr Stuart said.
China has ramped up its imports of Australian grain-fed beef. (ABC Landline)
US consumers paying more
The US imported $US42.3 billion ($A64.2 billion) worth of Brazilian goods in 2024.
According to Reuters, the tariffs on Brazil could have a significant impact on US food prices — and coffee.
“Around a third of the coffee consumed in the US, the world’s largest drinker of the beverage, comes from Brazil” it said.
“A tariff of that size would all but shut down that flow. Brazil will sell its coffee elsewhere.”
More than half of the orange juice sold in the US also comes from Brazil.
US beef prices are already at record highs and Mr Stuart said a tax on imported Brazilian beef would not help.
“The irony here is that one of the major meat packers in America is Brazilian-owned (JBS) and it could make the argument [to Trump] that it’s already invested heavily in America,” he said.
“So let’s see — Brazil has three weeks to cut a deal.”
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