Navigating tariffs and biosecurity concerns in the evolving Australia-U.S. beef trade

Short on time? Read the key takeaways.

As global trade dynamics continue to evolve, Australia finds itself at the crossroads of opportunity and geopolitical complexity. Recent developments in the beef trade between Australia and the United States (U.S.) highlight the delicate balance between economic strategy, biosecurity integrity and international diplomacy. 

Despite the Trump Administration's introduction of a 10 per cent tariff on Australian beef, U.S. demand for lean beef has surged. Driven by seasonal grilling habits and a domestic cattle shortage, American importers are turning to Australia to fill the gap. Exports have risen by more than 30 per cent this year, underscoring the resilience and competitiveness of Australian beef, even with the additional tariff pressure. 

For Australian producers, this demand spike presents a short-term win, which is particularly welcome for producers in southern regions who are destocking due to drought conditions. Currency advantages and strong U.S. prices are helping to offset the tariff’s impact. However, the long-term implications of a tariff-laden trade environment remain uncertain. 

Risks and opportunities from tariff pressures on Australian beef 

Beef remains Australia’s top agricultural export to the U.S., with $4.16 billion worth of beef being exported in 2024. This underscores the sector’s importance in bilateral trade and highlights the potential impact of the new tariffs. The increased costs associated with these tariffs are likely to affect both ends of the supply chain, raising prices for U.S. consumers and decreasing competitiveness for Australian producers. 

The beef industry is deeply integrated into the U.S. food supply chain, and the new tariffs are expected to significantly disrupt this relationship. Australia’s position as the largest beef supplier to the U.S. means that any tariff increase could lead to higher prices, reduced demand, and a shift in market dynamics. Additionally, the Trump Administration’s emphasis on reciprocal trade measures raises the possibility of additional US retaliatory tariffs, further complicating access to the U.S. market and intensifying competition from other global suppliers. 

Australian beef producers are now being urged to reassess their pricing strategies, diversify their export destinations, and explore more efficient supply chain models to improve resilience and mitigate the impact of these changes in the longer term. The industry is facing a period of disruption, and adaptability will be crucial in navigating this evolving trade environment. 

Beyond beef, other Australian meat products exported to the U.S. are also at risk. These products could similarly be affected by increased costs and declining demand, broadening the scope of the challenge facing Australia’s meat export sector. 

Industry pushback - Biosecurity is non-negotiable 

Australia’s agricultural sector has responded to suggestions that the biosecurity regulations be relaxed for US beef products with a firm stance. Industry leaders have warned against using biosecurity as a bargaining chip. Australia’s disease-free status is a cornerstone of its global reputation and market access. Any erosion of these standards could have far-reaching consequences, not just for beef but for the broader agricultural sector. 

Considerations for Australian businesses 

For Australian exporters and investors, this situation raises several key considerations: 

• Resilience in adversity - The beef sector’s ability to thrive despite tariffs highlights the importance of market diversification and supply chain agility 
• Policy watch - Businesses must stay attuned to shifts in trade policy and regulatory frameworks, particularly in the sectors where biosecurity and public trust are paramount 
• Diplomatic dynamics - As global politics becomes more transactional, Australian businesses may increasingly find themselves navigating the intersection of commerce and diplomacy. 

Looking ahead 

As global trade dynamics continue to evolve, the Australian food and agriculture sector faces a period of heightened uncertainty and strategic recalibration. The imposition of new tariffs, particularly by the U.S., signals a shift toward more protectionist policies that could reshape long-standing trade relationships. For Australia, a key exporter of beef and other agricultural products, this means navigating a more complex and competitive international landscape. In the months ahead, several key developments will warrant close attention: 

• Policy volatility - With the U.S. Administration signalling a stronger stance on reciprocal trade, further tariff adjustments or retaliatory measures remain a possibility. Australian exporters must prepare for rapid shifts in market access conditions. 
• Market diversification - To mitigate reliance on the U.S. market, there will likely be a renewed push to expand into alternative export destinations across Asia, the Middle East, and Europe - noting with the exception of Europe we have numerous free trade agreements across these regions. This will require tailored trade strategies and investment in new logistics pathways. 
• Cost pressures and innovation - Rising shipping and compliance costs will continue to squeeze margins. In response, producers may need to further accelerate investment in supply chain innovation, digital traceability, and sustainable practices to maintain competitiveness. 

Ultimately, while the current tariff environment presents significant challenges, it also offers an opportunity for the sector to adapt, innovate, and strengthen its global positioning. 

How BDO can help 

Now is the time for Australian companies to seek expert advice on mitigating the financial and logistical impacts of the U.S. tariffs. With careful planning, businesses can find ways to adapt and continue to thrive despite the changing global trade environment.  

Our experienced customs, international trade and excise team and food and agribusiness team can help your business plan for additional tariffs if or when they are implemented in the U.S. Contact us today to learn more about how we can support your business.