While President Trump’s weekend announcement about tariff relaxation on imported beef and other food products attracted headlines around the world, reports have overlooked the fact that Brazil still faces a massive secondary tariff mountain for red meat product heading into the US market.

Initial media reports interpreted the Trump announcement to mean that virtually all tariffs on beef and other imported food items were dropped, which is far from reality.

While final clarification from the White House is still being sought (the weekend evidently made communications difficult), red meat trade sources both in the US and Australia are interpreting that Trump’s announcement relates only to the 10pc ‘Liberation Day’ reciprocal tariffs imposed last April.

Effectively that means Australian beef now bears no tariff at all on entry into the US.

In contrast, Brazil is still lumbered with a ‘legacy’ tariff burden totalling 66.4 percent, being the base 40pc tariff (originally 50pc, when imposed in July). In addition, since mid-January Brazil has been exposed to a 26.4pc duty on US imports, having triggered the Safeguard provision on export volume to the US under the MFN ‘Other Country’ quota  (see earlier report).

Trump originally framed the 50pc additional retaliatory tariff as a response to what he described as a “politically-motivated witch hunt” against former Brazilian president Jair Bolsonaro, who was facing charges related to an alleged coup attempt. Bolsonaro has since been found guilty and sentenced to 27 years’ jail.

Associated Press has reported overnight that Brazilian vice president Geraldo Alckmin has stated that Brazilian exported goods to the US including coffee, beef and tropical fruits would still be tariffed at 40pc, despite President Trump’s decision to remove some import taxes.

“Everyone (exporters to the US) got 10pc less, but in Brazil’s case, which had 50pc, we ended up with 40pc, which is still very high,” vice president Geraldo Alckmin told journalists.

His comments did not include the 26.4pc Safeguard tariff on beef, described above.

Brazil’s Safeguard duty of 26.4pc based on an annual quota will disappear with the start of the new trading on 1 January, but under current access terms, Brazil will again likely fill the 2026 ‘Other country’ quota within the first couple of months, as it did this year.

What has surprised may trade watchers this year has been the amount of Brazilian beef that continues to enter the US market, despite the massive tariff burden. That reflects the sheer shortage of domestic beef in the US system this year, and inevitably again next year, trade sources told Beef Central.

Prior to the implementation of Trump’s July 50pc tariff impost in July, Brazil in fact swept past Australia for the first time in history as the largest imported beef supplier to the US. That changed again rapidly when the tariff impact took effect, with much of the Brazilian product diverted to China.

With the removal altogether of the 10pc tariff on Australian exports, the slightly reduced burden on Brazil still leaves Australian exporters at a considerable trade advantage into the US.. Should it remain, the tariff difference between Australian and Brazilian imports will have a material effect on beef trade into the US next year.

“The Trump administration has insisted that its tariffs helped fill government coffers and weren’t a major factor in higher prices at grocery stores around the country,” Associated Press reported yesterday. “But Democrats were quick to paint Friday’s move as an acknowledgment that Trump’s policies were hurting American pocketbooks,” AP wrote.

On Sunday, the Meat Import Council of America said it had sought clarification from the White House about the extent of tariff withdrawals on beef from Brazil. MICA said based on information currently available, it believes Brazil’s 40pc additional tariff remains in effect. Only the 10pc reciprocal tariff appears to have been removed on Brazil, it said.

Other US trade sources are now convinced that Brazil’s tariff level drops by only 10pc, with 40pc tariffs imposed in August and other quota-tied fees on Brazilian imports remaining in effect.

Source: Beef Central

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