To Tariff, or Not to Tariff?

From UniPro Foodservice: Tariffs on, tariffs off, delays, and exceptions have been the pattern of the past six weeks or so, and expect more of the same until proven otherwise. Unfortunately, the situation is not straightforward and will likely remain that way.
At time of writing, U.S. tariffs on goods covered by the USMCA have been delayed until April 2. Tariffs on China remain in place and reciprocal tariffs are slated for April 2 as well. While U.S.-imposed tariffs will likely remain a moving target, much of the impact to individual markets and sectors of the economy will also depend on retaliatory actions by other countries.
Specific to beef and cattle markets, trade disputes with Canada and Mexico in aggregate may be minimal, although with substantial disruptions to individual entities and supply chains. As shown in the accompanying table, trade runs both ways between the U.S. and our neighbors. Beef trade runs both directions with Canada and Mexico, with the U.S. being a net importer from both partners.
In terms of cattle, the U.S. is a net total cattle importer from Canada. Feeder cattle flow both directions with a net flow towards Canada as more feeder cattle are shipped North than are brought to the U.S. This is offset by slaughter cattle imports, predominately fed cattle. The U.S. has long imported a considerable number of feeder cattle from Mexico. Inspections and processing protocols for New World Screwworm will limit the pace of Mexican imports for the foreseeable future, tariffs or no tariffs.
In total, aggressive tariff rates may somewhat limit imports of cattle and beef, but much of the movement may continue as the supply chains are very interconnected. The bulk of the tariff cost may be absorbed by Canadian and Mexican beef/cattle markets, while potential weaking of the Canadian Dollar and Peso could also offset some of the price impacts.
The largest risk to the cattle and beef complex likely hinges on potential retaliatory trade actions against U.S. beef to China. In 2024, China was the third largest importer of U.S. beef in tonnage and the second largest in value at $1.52 billion. Abrupt market disruptions to China would have near term consequences, even as strong global demand for U.S. beef amid cyclically tighter production may soften longer-term effects.
Risks and disruptions to other ag. markets will also be important to monitor. Grain markets are also significantly exposed to risk from retaliatory tariffs. China is the largest importer of U.S. soybeans and Mexico is the largest buyer of U.S. corn exports.
Mexico was the largest buyer of U.S. pork in 2024, more than double the size of Japan, the next largest destination. Mexico has long been a significant buyer of U.S. hams and other pork products. Pork trade with Canada is smaller and flows both directions. Canada is an important source of feeder pig imports for U.S. pork producers with some market hogs and slaughter sows imported as well.
Bottom line:  evolving situation will entail volatility and It is impossible to know what the status of trade and tariffs will look like in a year, or what will transpire between now and then, with many moving parts that may impact cattle and beef markets and other ag. and non-ag sectors. Unfortunately, the cattle and beef industry must be ready for a continually uncertainty at minimum.