Beef farmer Phillip Rattray had been anticipating higher returns on his products, but a decision made halfway across the world by Donald Trump could soon change his fortunes.
Mr Rattray’s farm in northeast Tasmania is three times larger than the next beef producer, and he offloads about 4000 cattle to multinational beef processor JBS Swift every year to export overseas.
The latest round of tariffs, expected to be unveiled by President Trump on Thursday morning, has left the grazier extremely concerned.
He had been expecting a 50c/kg increase, equivalent to an extra $150 for a 300kg animal, after stock shortages from Queensland flooding.
“We were looking at a bright future … as the (beef) prices going into America are very high at the moment, but if Trump brings these tariffs in, it will reduce the price,” Mr Rattray told AAP.
Australia faces unknown flow-on effects from the tariffs likely to hit the nation’s agriculture sector and pharmaceutical industry, with some reports pointing to a blanket 20 per cent margin.
“He could do anything … I just can’t understand why he’s doing it,” Mr Rattray said.
The farmer warns tariffs won’t just hurt Aussie farmers but also American consumers who purchase massive amounts of brining beef and smallgoods.
“The US are a very big customer because they’re in a rebuild phase after drought conditions,” he said.
“The people in America will have to pay a lot more money.”
Australia exports $3.3 billion of meat and $1.6 billion in pharmaceuticals to the US per year.
The peak body representing red meat producers has called for calm and urged stakeholders not to jump at shadows but wait until announcements have been made.
Australian Meat Industry Council chief executive Tim Ryan said Australian beef producers play a critical role in feeding American consumers as there is a shortfall of meat which won’t change overnight.
“The global demand for high-quality Australian red meat continues to grow, and our supply chain is well-positioned to respond to shifts in the international trade landscape,” he said.
Prime Minister Anthony Albanese has not ruled out Australia taking the US to the World Trade Organisation, but notes the nation’s exports to the US represent less than five per cent of its global exports.
QUT international trade law expert Professor Felicity Deane said any new tariffs would be in violation of World Trade Organisation rules and the Australia-United States Free Trade Agreement.
She said new markets may open up but also warns of global market disruption.
“It’s hard to say what the flow-on effects may be, because some countries may respond with tariffs of their own, which could drive up the cost of US products,” she said.
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