TALK about kicking yourself in the shins.
I can’t think of any other response to President Trump’s tariffs on the importation of beef into the USA.
As an owner of rural properties for nearly 40 years I am acutely aware of the pressures on the beef, lamb and grains industry in our country.
Plus, as a regular traveler to the USA, I am aware of their industry realities, especially at the retail end of that food chain.
Americans are very large consumers of ground beef, particularly in the fast-food area, due to their preference for hamburgers.
These lower grades of meat called processing cuts are the lowest cost inputs for this product.
Much of it is derived from overseas imports.
This is mainly because US beef production is locally value-added to by being grain fed, delivering a much higher priced end product and therefore not suitable for fast food products.
With fast service and low prices being their mantra, the cost is sure to be increased once these tariffs of say 10 percent are added to the retail price of fast food.
For this reason alone, tariffs become an additional cost for American consumers and have very little, if any, effect on Australian beef suppliers.
In simple terms, tariffs are a tax on products imported from another country. The tariff is paid to the government by the company that imports the product.
Historically tariffs push up prices and that additional cost is then paid by the retail purchaser.
The US consumer will not like that price hike.
Therefore, the whole exercise becomes a negative one for the US population.
We really need to ask the question: Why would Trump do that?
If Trump’s game is to attract the attention of China by instituting tariffs, then this must be a misfire of some proportion.
China has now stopped taking US beef and replaced that product by importing more from Australia and the other nations that were USA’s traditional suppliers of lower grade ground meat.
Intelligent suppliers of beef and indeed most products who normally export to the USA will move their markets due to the imposition of US tariffs and find willing buyers for their products in other countries.
The exercise of US tariffs on Australian primary production looks like one of complete futility to me, plus being an additional cost for their consumers.
By John BLACKBOURN
