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The current US baseline tariffs of 10% should be manageable for most countries, including Australia and New Zealand. Canada and Mexico are well-positioned, as most food and agricultural shipments to the US are tariff-free due to the US-Mexico-Canada Agreement (USMCA).
Beef: Due to USMCA, Canada and Mexico gained an advantage when other suppliers were hit with 10% tariffs, but their export volumes to the US may not see significant gains. This should still be the case once US reciprocal tariffs take effect, which is expected on 9 July.
Sheepmeat: Australia and New Zealand supply over 98% of US imports. Despite the 10% US import tariffs, these volumes are likely to continue.
Wine: Over 95% of US wine imports currently face 10% baseline tariffs. From 9 July, higher reciprocal tariffs are expected to affect over 80% of imports, mainly from the EU, while imports from New Zealand, Australia, Brazil, and Chile will remain at 10%, giving them a relative advantage.
Canola: USMCA allows Canadian canola oil and meal to flow tariff-free into the US, preventing increased competition with Australian canola in the EU and Asia.
Almonds: High Chinese tariffs have halted imports of almonds from the US, its major supplier. Australia is well-positioned to gain market share in China, which is already its largest destination.
Overall, Australian and New Zealand agricultural trade should be able to maintain current trade volumes, and some commodities may even find opportunities to gain share in the US or China. But US trade policy bears watching, as it could change in the near future.
Summary of US-China Trade War Impact on China's Food and Agribusiness:
Trade War Context: The report analyzes a worst-case scenario of a complete US-China trade decoupling, focusing on its impact on China's food economy from China's perspective.
Limited Overall Impact: Imports constitute only 7% of China's food economy, so a US trade embargo would have minimal effect on food security. China's staples (e.g., wheat, rice) remain self-sufficient due to strategic priorities.
Import Dependency: China relies on imports for land-intensive, low-value feed crops (e.g., soybeans, alfalfa) due to scarce agricultural land. This supports self-sufficiency in grains but exposes animal protein industries to import disruptions.
Feed Crop Alternatives: China can mitigate US tariffs by sourcing feed crops from other countries, using state reserve stocks, or adjusting feed rations to reduce reliance on imports.
Niche Imports: China imports coproducts like offal meat and chicken feet, valued domestically but less globally, to stabilize domestic prices. Imports also address supply shocks, e.g., pork imports during the swine fever outbreak.
Discretionary Spending: Rising demand for indulgent foods (e.g., cocoa, avocados, premium beef, whiskey) drives imports, but US products hold a small share. A trade war could indirectly reduce demand for these if China's economy slows.
Conclusion: China's food security is resilient to a US trade war due to low import reliance, alternative sourcing options, and self-sufficiency in staples. The main impact would be indirect, potentially reducing discretionary spending on high-value foods.
impact on soybeans
Britain's farmers union gave Thursday's US-UK economic deal a mixed reception, welcoming the retention of British food standards on US imports and reciprocal market access for beef, but flagging concern over a removal of tariffs on bioethanol, reported Reuters.
The deal gave UK farmers a US quota for beef of 13,000 metric tonnes, which the National Farmers Union said was a positive. Under the deal, US farmers will have the same quota for sales into Britain.
Crucially there will be no weakening of UK food standards on US beef imports, which was a red line for the union and an election manifesto pledge for the Labour government. That means US beef bred with growth hormones still won't be allowed into the UK.
“We appreciate the government’s efforts in listening to our concerns, particularly around maintaining high standards, protecting sensitive agricultural sectors and securing reciprocal access for beef," NFU President Tom Bradshaw said.
Brooke Rollins, US Secretary of Agriculture, said the deal would "exponentially increase" US beef exports to Britain.
However, with little price differential between British produced beef and US beef that does meet UK standards, the US product could struggle to find a UK market.
Finding favour with the UK consumer may also be a tough task. Currently 100% of the fresh beef sold by Britain's two biggest supermarket groups - Tesco and Sainsbury's - is British and Irish.
Bradshaw also said he was concerned that the US had been given full access to Britain's market for bioethanol, which is used to produce beer.
"Two agricultural sectors have been singled out to shoulder the heavy burden of the removal of tariffs for other industries in the economy," he added.
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Food Safety Oversight: The FDA regulates 80% of the U.S. food supply (e.g., baby formula, leafy greens), while the USDA oversees animal products (e.g., meat, eggs). Safety relies on industry self-regulation, with federal and state inspectors conducting periodic checks and investigating outbreaks alongside the CDC.
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Outbreak Response: Foodborne illness outbreaks, triggered by contamination (e.g., manure on lettuce, bacteria in undercooked meat, mislabeled allergens), are identified through medical reports and state surveillance. The CDC coordinates multistate investigations, but companies face reputational, not criminal, consequences due to the Trump administration’s disbandment of the DOJ’s Consumer Protection Branch, weakening enforcement.
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State vs. Federal Roles: The Trump administration is considering shifting routine food safety oversight to states, which could lead to inconsistent responses due to varying state resources. Only federal agencies can set national standards, coordinate recalls, and monitor multistate threats, making federal cuts concerning.
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Cuts to Programs: The Department of Health and Human Services (FDA and CDC) lost 20,000 employees, suspending FDA programs like milk and vegetable quality control and testing for bird flu in cheese and pet food. The USDA cut advisory committees and withdrew a poultry Salmonella rule. Some FDA staff terminations were rescinded on May 6, 2025.
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Impact on Safety: No immediate decline in milk safety standards, which benefit from robust state oversight, but broader food safety is at risk due to reduced FDA oversight. In Utah, FDA audits of local inspectors have stopped, slowing compliance with federal standards.
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Expert Concerns: Cuts undermine prevention, detection, and response to foodborne threats. Without federal enforcement and expertise, accountability weakens, potentially compromising long-term food safety, though immediate impacts are not yet fully evident.
Beef Sales (Week Ending May 1, 2025): Net sales of 7,600 metric tons (MT) for 2025 were down 41% from the prior week and 42% from the 4-week average. Key increases were for Japan (6,600 MT), South Korea (1,900 MT), Hong Kong (1,400 MT), Taiwan (1,000 MT), and Mexico (900 MT), offset by reductions for China (5,500 MT). Exports of 15,100 MT were down 4% from the prior week but up 3% from the 4-week average, primarily to South Korea (5,200 MT), Japan (4,400 MT), Mexico (1,400 MT), Taiwan (1,300 MT), and Hong Kong (1,000 MT).
Pork Sales (Week Ending May 1, 2025): Net sales of 24,200 MT for 2025 were down 30% from the prior week but up 14% from the 4-week average. Increases were led by Mexico (9,900 MT), Japan (3,500 MT), South Korea (3,000 MT), Canada (1,800 MT), and Australia (1,500 MT), offset by reductions for Denmark (100 MT). Exports of 25,600 MT were down 1% from the prior week and 10% from the 4-week average, mainly to Mexico (11,000 MT), Japan (4,400 MT), South Korea (3,500 MT), Colombia (1,800 MT), and Canada (1,000 MT).
US Egg Imports (March 2025): Egg imports surged due to a severe avian flu outbreak culling millions of egg-laying hens, causing domestic shortages. Brazil tripled exports to 3,770 tons (up 340% from 2024), Turkey redirected shipments, Mexico resumed exports, and Honduras entered as a new supplier. Imports from Turkey, Mexico, Brazil, and Honduras helped reduce egg prices from over $8/dozen in early March to ~$3 by month-end, stabilizing the market despite being a small fraction of US supply.
US Meat Industry in Vietnam: Vietnam’s meat import market grew to $1.78 billion in 2024 (up 18.1%), driven by urbanization and rising incomes. US meat faces high MFN tariffs (e.g., 10% on pork, up to 30% on beef) compared to zero tariffs for CPTPP countries like Canada and Australia. The US Meat Export Federation promotes US meat’s quality and safety to compete with India, Brazil, and Russia. A 46% US tariff on Vietnamese goods strains trade, though a temporary reduction to 10% and Vietnam’s offer to cut US tariffs aim to ease tensions.
USDA Dairy Highlights (March 2025): Total cheese production was 1.23 billion pounds (up 1.4% from March 2024), with American cheese up 4.6% and Italian cheese down 0.2%. Butter production rose 8.6% to 229 million pounds. Nonfat dry milk and skim milk powder fell 9.1% and 11.9%, respectively. Dry whey dropped 12.4%, while lactose rose 1.7%. Ice cream and sherbet production declined, but frozen yogurt increased 6.1%. Butter demand was steady, cheese demand varied by region, and milk output remained strong.
Global Food Commodity Prices (April 2025): The FAO Food Price Index rose 1% to 128.3 points, up 7.6% from April 2024, driven by cereals (up 1.2%), meat (up 3.2%), and dairy (up 2.4%). Pork led meat price increases due to EU demand and lifted German export restrictions. Butter prices hit a record high. Sugar and vegetable oil prices fell 3.5% and 2.3%, respectively, due to economic concerns and supply recovery.
US-Mexico Screwworm Eradication: The USDA and Mexico agreed to resume joint efforts against New World screwworm, with Mexico lifting restrictions on USDA aircraft and customs duties. This keeps livestock ports open, though US may reconsider closures if Mexico falters. Around 300,000 calves are backed up at the border due to slow crossings
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