We are experiencing the market’s response – uncertainty and volatility – toward the imposition of global tariffs in a market that is “wrongly assumed to be an environment of free trade.” Most Americans have little, if any, knowledge of trade and tariffs. In the last 60 days, that all changed and so here we are.
Trade is important to the U.S. beef industry – both exports and imports. Regarding exports, the U.S. produces the largest quantity of high-quality, grain-fed beef in the world. In 2024, the U.S. exported 3 billion pounds of beef representing 11 percent of U.S. commercial beef production. The five largest buyers were Japan, So. Korea, China, Mexico, and Canada with 78 percent of total sales volume and 76 percent of total sales value at $10.45 billion. U.S. beef and beef products sold to Japan, our largest export customer (22 percent of total volume), was valued at $2.2 billion. During the first two months of 2025 (most recent trade data), these same five countries continued to lead the volume of beef exports, representing 81 percent of the total volume.
While noting that China has been an important importer of U.S. beef, ranking 3rd in terms of export volume, developing other markets is key to building a long-term sustainable export business. China’s sales peaked in 2022 at 626.4 million pounds and a value of $2.24 billion. At the same time, global trade under the banner of sustainable free trade requires that everyone lives up to the obligation of the agreements. China has not complied with the U.S. – China trade agreement signed in 2020.
The other part of the trade equation is imports and U.S. beef imports are just as important as exports. A large share of our imported beef is lean grind to produce ground beef products. This is particularly important in the current market environment of sharply reduced cow slaughter. Cows are the primary source of lean grind. In 2024, U.S. beef imports represented 17% of U.S. beef production. Australia, Brazil, Canada, Mexico, NZ, and Uruguay provided 91% of those beef imports. Australia has historically been the major exporter to the U.S., and ships under a tariff-rate quota with a lower tariff under the TRQ. In 2021 and 2022, Australia’s shipments to the U.S. were down sharply following their herd liquidation due to drought. However, in 2024, following recovery and herd rebuilding Australian shipments to the U.S. were the largest since 2015, representing 24% of total U.S. beef imports. For Jan-Feb 2025, Brazil leads Australia as a major U.S. beef importer with 26% of the trade volume. Behind Australia are Canada with 16% and Mexico with 11%. Both are exempt from tariffs under the U.S., Mexico, Canada free trade agreement.
The impact of tariffs on overall global trade is complex and not easily assessed, particularly when those tariffs are so unequally applied across the globe. The situation is only further complicated by adherence to trade agreements. It is expected that individuals and industries will have the tendency to be short-sighted in the response to the current situation. However, thinking “big picture” with an aim toward true free trade around the world is important.