A temporary reduction in tariffs between the U.S. and China emerged over the weekend, allowing U.S. beef exports to escape the burden of a 125% tariff going into the Chinese mainland.
The reduction announced May 12 represented a shift from President Donald Trump’s previous promises to stand firm on tariffs during his initial announcement on April 2. But the new agreement brings back tariffs on Chinese goods from 145% to 30%, while China’s tariffs on U.S. goods goes from 125% to 10%, for a 90-day period according to a joint statement.
“USMEF greatly appreciates the efforts of U.S. Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent to negotiate this agreement with their Chinese counterparts. Although this is a temporary pause, we are hopeful that it is the first step toward restoring access to China for U.S. pork and beef," the U.S. Meat Export Federation announced in a statement Monday.
That limited access for U.S. beef was the result of China allowing registrations for most U.S. beef plants and cold storages to expire on March 16, according to U.S. Meat Export Federation (USMEF) vice president of communications, Joe Schuele. “So the majority of U.S. beef production won’t be eligible until these updates are made.”
As for the real tariff level assessed on U.S. beef, Schuele said that during the 90-day period ahead, “U.S. beef will be tariffed at 32 percent. China is retaining a 10 percent retaliatory duty related to fentanyl, plus a 10 percent baseline duty, plus the standard 12% most-favored-nation [MFN] tariff, so those add up to 32 percent. Most imported beef entering China pays the 12 percent MFN tariff, but Australian and New Zealand beef enter at zero.”
What happens next in the negotiation stage is uncertain, but solidifying an agreement to paper could take more weeks or months. Tariffs under 30% should be sufficiently low enough to spark reshipment from China to the U.S., at least in the short term, after recent weeks showed a dramatic slowdown in U.S. cargo ports.
“Tariffs at the 20 percent level didn’t stop shippers from front-loading in March and April,” Judah Levine, head of research at Freightos, told CNBC on Monday. “U.S. ocean import volumes were up 11 percent year over year in that stretch, so the current ‘reduced’ 30 percent level should see a restart of shippers pulling forward demand to beat a possible August tariff hike.”
