American markets and industries are watching closely to see just how long President Donald Trump’s current trade war will last, with the biggest attraction being the standoff against China.
According to an April 23 report in The Wall Street Journal, the White House is considering de-escalation of its tariffs on China after two weeks of volatility in the markets, with one source saying the reduction could drop another 50% to 65%.
No confirmation came from Trump on the story, which used anonymous sources. But the report said Trump wants China to make some movement so he doesn’t have to move unilaterally on a plan to cut into the 145% tariffs he has placed over several stages on Chinese products this year.
One sector waiting anxiously is the beef industry.
After Trump announced tariffs on a global scale on April 2, then withdrew the retaliatory portion of them in a 90-day pause a week later (but still kept China’s tariffs in place), China moved to retaliate. Both countries started with 10% tariffs in February; the U.S. put another 10% into play on March 4. China retaliated on March 10, with a 15% tariff that included chicken, pork and beef.
Then came “Liberation Day” on April 3, with 34% additional tariffs on Chinese goods, leading to China’s retaliation of similar tariffs and additional restrictions on exports of critical minerals to the U.S.
So where are we today after weeks of retaliatory actions?
“China is the only country to date that has imposed retaliatory tariffs on U.S. beef,” said Joe Schuele, vice president of communications at the U.S. Meat Export Federation (USMEF), in an email. “With all the recent additions, the retaliatory duties now total 135 percent, meaning China now tariffs U.S. beef at 147 percent (135 percent plus the 12 percent most-favored-nation rate).”
Such a steep price on U.S. beef is a drastic turn from how Trump opened trade with China in his first term and a Phase I deal in 2020 that included beef.
Derrell Peel, a livestock marketing specialist with Oklahoma State University, said China and Hong Kong together became the third-largest export market for U.S. beef and variety meats last year, coming in at just over $2.02 billion in export receipts.
That dynamic is already at risk in 2025 with Chinese high-end restaurants and hotels removing U.S. beef from menus. Even though U.S. beef has a distinct high quality for China, the market could easily fill the gap with Australian or Brazilian beef.
“I've already seen some stuff out of China in some of those markets where, once they exhaust supplies in their pipeline, they don't expect to be importing U.S. beef, and they will be turning to those other markets,” Peel said.
“Uncertainty is the name of the game right now. But if, in fact, this whole tariff situation persists for a number of months or years, whatever it takes, those markets will continue to make adjustments. They're not going to sit still. And so we'll continue to see adjustments in other countries around the world, whether or not we are actually participating in those markets. I think that's one of the things we have to be aware of.”
Other beef tariffs
Schuele provided an update on how U.S. beef is being priced with other international trade partners on both exports and imports, under current tariff negotiations, starting with Japan.
“Under the U.S.-Japan Trade Agreement that took effect in 2020, Japan’s tariff rate for U.S. beef cuts is now 21.6 percent,” Schuele said. “The rate will drop to 9 percent by 2033. U.S. beef has a level playing field in Japan, as all other trade agreement countries are at the same tariff rate. But even with the trade agreement, Japan’s tariff of 21.6 percent is the highest U.S. beef faces in any major import market (other than the current situation with China, obviously). On a more positive note, Japan’s tariff rate for beef tongues is just 1.9 percent and goes to zero by 2028. The rate for skirts and hangers is 2.6 percent and goes to zero by 2030.”
South Korea, he added, under agreements signed with the U.S., has gone down from 40% to just 2.7%, and will go to zero next year.
As for the standoff Trump created with Canada and Mexico early in the year, beef has remained untouched by any new tariff threat. The U.S.-Mexico-Canada Agreement (USMCA) crafted by Trump in his first term has still kept beef tariffs at zero. This applies to all beef exports from the U.S. and any beef imported from Mexico and Canada. Canada was the top source for beef imports to the U.S. in 2023, with 355,177 metric tons, followed by Mexico, Australia and New Zealand.
Australian beef has duty-free access through its existing trade agreement to the U.S. “But under the White House’s reciprocal tariff plan, Australian beef is tariffed at 10 percent for the 90-day interim period,” Scheule said.
As for New Zealand, Schuele said imports to the U.S. within a 213,402 metric ton annual quota had been tariffed at just 4.4 cents per kilogram, with an out-of-quota tariff rate of 26.4%.
“But under the White House’s reciprocal tariff plan, New Zealand beef is tariffed at an additional 10 percent for the 90-day interim period.”
Schuele clarified that in spite of the 90-day interim that Trump called back on April 9 for many tariffs, the 10% tariff he issued on several countries from the Rose Garden on April 2 is still in effect.
“The 10 percent tariff is in effect now. While it was widely reported as a 90-day ‘pause,’ the administration actually just capped all the ‘reciprocal’ tariffs at a maximum of 10 percent, except for China. Goods from Canada and Mexico are exempt, if they comply with USMCA. But most goods from everywhere else are tariffed at 10 percent.”
Currency fluctuation
Trump’s concern about the trade imbalance, in which the U.S. buys more imports in total than what we send out as exports, can be correlated to a stronger dollar. With a lower U.S. currency, American goods can be cheaper for partners to buy.
The U.S. dollar index has fallen from $1.08 in February to 99 cents on April 23, leading to some promising outlooks on the beef export front.
Erin Borror, USMEF’s vice president of economic analysis, said some markets show promise, but added some caution.
“The recent weakening of the U.S. dollar means that the Japanese yen is now 7 percent stronger than it was at this time last year and this helps to improve Japan’s purchasing power for U.S. beef,” she said. “The euro and the British pound are now each 6 percent stronger than a year ago. Other top importers’ currencies are regaining value against the dollar, but they are still weaker than they were at this time last year. The Korean won is still 6 percent weaker than a year ago and the Mexican peso is down 18 percent. So it’s hard to call this a weak dollar advantage yet.
“For major competitors, the Australian dollar has rebounded from its steep decline in early April, but is still 3 percent weaker than a year ago. The Canadian dollar is down 2 percent and the New Zealand dollar is even. The Brazilian real has rebounded from the record low reached in December but is still 14 percent weaker than a year ago.”
