Trump and his reign of tariffs are dominating discussions at the moment, both in the party room and at the dinner table. In case you’ve had your feet up at the beach or been busy waiting for rain the past few weeks, US President Trump has been throwing more than a few spanners into the works of global trade and finance. Most recently, he announced that starting April 2, he will impose tariffs on all agricultural products imported into America.
Let’s get up to date with the export figures. First off, Australia exported 8621 tonnes of lamb to the US in February, the largest single-month volume on record and about 30% above the five-year average for the month. This follows a new annual record volume being sent in 2024, up 22% year-on-year, with the US currently taking up 26% of the Australian exported lamb market. Our sheepmeat trade with the US was worth $1.35 billion in 2024, and we generally supply nearly 80% of all America’s imported lamb – which is 70% of total lamb consumption there. There are currently no tariffs or quotas in place.
Farmer organisations across the US are lobbying hard in favour of the tariffs, with the American Sheep Industry Association reporting having called for a tariff of at least 21% for their domestic production to maintain its current market share. However, this comes at a time when production of red meat in the US, particularly beef, isn’t meeting demand, which has remained resilient, and the Australian dollar is very competitive. This means while tariffs may have the support of US producers, the consumer, who will ultimately pay the price at the checkout, is likely to be less than thrilled with the plan.
When Trump last went down this path on imports it was primarily directed at China and was during a time when Chinese domestic protein production was struggling. It saw exports of Australian sheepmeat to China rise nearly 30% from 2018 to 2019. Let us not forget as well as being Australia’s biggest red meat market, the US is also the world’s largest meat exporter. China just yesterday renewed many of the import registrations for U.S. pork and poultry processors that were granted at the culmination of the last trade stand-off in 2020.
ABARES acknowledges the uncertainty around potential tariffs but currently forecasts our sheepmeat and live sheep exports value for 2024-25 to remain stable at $4.8 billion, 12% above the five-year average. They expect world sheep demand to grow in the short to medium term, driven by the US, Middle East, and South Korea. China, on the other hand, is likely to remain subdued due to its domestic economy and increased pork production. The Middle East could be the market to watch in 2025, as it also took a record volume of Australian lamb last year, up 18% year-on-year, and currently holds about 23% of the market share.
What does it mean?
The U.S. is our biggest red meat trading partner and currently the largest lamb market, so the introduction of tariffs will have some impact. How much that tariff ends up costing the U.S. consumer will decide the extent of the impact.
However, Australia is the largest exporter of lamb, and the introduction of tariffs by the US on all their trading partners could also open up some opportunities for exporters and therefore producers. However, overall protectionist measures are negative to global trade and therefore global economies, meaning it is unlikely there will be any real winners in this scenario.
Key Points
- The US is currently the largest Australian lamb destination with more than a quarter of the market share.
- Australia supplies 80% of all the US imported lamb, which makes up about 70% of their domestic consumption.
- Potential Trump tariffs to disrupt global trade, but world sheepmeat demand is set to remain at current levels.
Click on graph to expand
Click on graph to expand
Data sources: Mecardo; Meat and Livestock Australia: ABARES, DAFF, DAWE
