Meat & Livestock News

US Sheep Industry’s Shift on Lamb Import Tariffs and Trump’s Potential Influence

The American Sheep Industry Association (ASI), the principal sheep lobby in the United States, has recently stepped back from its earlier push for tariffs on lamb imports from New Zealand and Australia. This development, however, is shadowed by the possibility of a change in policy if Donald Trump, known for his protectionist stance, returns to power later this year.

Last year, ASI initiated an investigation through a Washington DC law firm to explore the impact of lamb imports on American sheep farmers. This move was seen as a precursor to potentially urging the US government to levy tariffs on lamb imports from the two Southern Hemisphere nations. The ASI’s concern stemmed from the inability of the US industry to satisfy the growing domestic demand for lamb, leading to a surge in imports and a consequent decline in the domestic market share.

The investigation’s objective was to ascertain whether lamb was being imported into the US at prices below production costs or local market rates, which could justify an anti-dumping case by the US government. However, following a review at their annual meeting in Denver, the ASI board concluded that there was no justification for further action, as conveyed by Peter Orwick, the ASI’s executive director.

Concurrently, a petition by R-CALF, another producer group, for restrictions on lamb imports from New Zealand and Australia is still under consideration by the US government. This petition, submitted to US President Joe Biden’s Trade Representative Katherine Tai, seeks an investigation under section 201 of the Trade Act of 1974 – the same legislation Trump used to impose tariffs on China during his presidency.

R-CALF’s petition, supported by bipartisan congressional backing, aims to reinstate the US producers’ domestic market share to 50% by imposing tariffs on lamb imports. Despite the support, the petition’s review process continues without a definitive deadline.

Mike Petersen, a former agricultural trade envoy, expressed concerns about the repercussions of Trump’s potential reelection on this matter. Trump’s previous term was marked by support for US farmers, leading to substantial subsidies following China’s retaliatory tariffs. Petersen highlighted the unease within the industry about Trump’s possible return and its potential impact on New Zealand sheep farmers.

New Zealand’s sheep farming sector has previously encountered protectionist barriers in the US market. In 1999, President Bill Clinton imposed tariffs on lamb imports from New Zealand and Australia, which were later overturned following a challenge at the World Trade Organisation. However, the current inoperability of the World Trade Organisation’s dispute system poses a new challenge.

While Australian producers might be somewhat shielded under the 2005 US-Australia free trade agreement, New Zealand’s lack of a similar agreement leaves it more exposed. The US is a key market for New Zealand, particularly for high-value lamb cuts, and has shown a preference for antibiotic-free lamb. In the 2022/23 year, New Zealand’s lamb sales to the US amounted to $511 million, making it the country’s second-largest sheep meat market after China.