Tariffs on Beef in the News Again

Media reports on the executive order regarding tariffs signed on Friday could make one think President Trump repealed all tariffs on beef and other foods. But that’s not the case. The executive order only removes the additional 10% reciprocal tariff put in place in April. All other tariffs and the tariff-rate quota (TRQ) system regulating U.S. beef imports remain in place. Under TRQs, a limited quantity of beef can be imported at a reduced tariff rate. If the quota amount is exceeded, a higher tariff rate is applied to quantities exceeding the quota. TRQs apply to all countries exporting beef to the U.S. except Mexico and Canada. And the additional 40% tariff on beef imports from Brazil imposed earlier this year remains. The total tariff on Brazilian beef imports over quota equals 66.4%. Argentinian beef imports over quota are subject to a tariff of 25% and it appears the administration still intends to increase the quota amount for Argentinian imports from 20,000 to 80,000 metric tons. The President’s order might have a psychological effect on prices, but the effect should be short-lived. The underlying supply and demand conditions in cattle and beef markets will not be markedly changed.