Freshly inaugurated United States President Donald Trump has reaffirmed his intention to implement a 25 percent tariff on goods imported from Canada and Mexico starting on February 1. This decision comes after President Trump issued a memorandum directing the US Secretary of Commerce, in consultation with the Secretary of the Treasury and the US Trade Representative, to investigate the causes of the country’s trade deficits and recommend appropriate measures to address them.
While the memorandum did not immediately impose new tariffs, President Trump indicated in media interviews that he still plans to move forward with the 25 percent tariffs on imports from Canada and Mexico. Additionally, there is a possibility of raising tariffs on goods imported from China. The memorandum also instructed the US Trade Representative to begin a public consultation process in preparation for the 2026 review of the US-Mexico-Canada Trade Agreement (USMCA).
Furthermore, the memorandum directed the US Trade Representative to review existing trade agreements and recommend any necessary revisions to maintain mutually beneficial concessions with free trade agreement partner countries. Notably, there has been no indication of new tariffs being imposed on goods from Australia, which currently operates under the AUSFTA Free-Trade Agreement established in 2005.
Australia has tariff-free access to the US beef market, with a quota of 448,214 tonnes. With the growing beef shortage in the US as the national beef herd enters a rebuilding phase, demand from exporters like Australia and Brazil is expected to rise. Last year, Australian beef exports to the US nearly reached 400,000 tonnes, indicating a significant increase in demand compared to previous years.
In addition to trade agreements, the incoming US President directed the US Trade Representative to identify potential countries for negotiating bilateral or sector-specific agreements to enhance export market access for American workers, farmers, ranchers, service providers, and businesses.
On a different note, the US Department of Agriculture has called for additional measures before resuming live cattle imports from Mexico. The trade was suspended last November due to the detection of New World screwworm in Mexican cattle. The USDA has requested facility improvements in Mexico to screen cattle for the screwworm fly before exporting to the US. This step is crucial before live cattle imports from Mexico can resume, and a seven-day quarantine period has already been imposed on future cattle imports.
As the trade landscape continues to evolve under the new administration, it is essential for stakeholders in the agriculture and livestock sectors to stay informed and adapt to changing policies and regulations. The decisions made regarding tariffs and trade agreements will have a significant impact on the global trade environment and the competitiveness of American industries.
