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In a bold move, the Australian beef industry has announced that it will pass on the costs of new US tariffs directly to American consumers.
This decision comes after the US government imposed tariffs on imported Australian beef, effectively increasing the cost of Australian beef entering the US market.
The Australian beef industry maintains that absorbing the costs themselves would be financially unsustainable and could negatively impact the industry.
“The effect on our market here today…we haven’t seen it,” said Dhugald McDowall, of livestock agency Elders Cleary McDowall”. It does make the commodity that’s going into America a lot dearer for their own consumers.
So I think in the short term, it could be quite detrimental to the US economy” .
Why Australian Beef Matters to the US?
The US is Australia’s largest market for beef, with annual exports valued at a record A$4 billion ($2.52 billion).
Australian beef is highly valued for its lower fat content, which is often blended with fattier US beef to achieve the ideal fat content for hamburgers. In fact, US fast-food chains like McDonald’s rely heavily on Australian beef to meet their requirements.
The Australian government has even used this as a bargaining chip, with Trade Minister Don Farrell warning that increased tariffs on beef could result in higher prices for McDonald’s hamburgers.
What’s Next for the Australian Beef Industry?
As the trade tensions between Australia and the US continue to escalate, the Australian government has announced plans to support industries affected by US tariffs.
Prime Minister Anthony Albanese has promised to help these industries sell their products in alternative markets ¹.In the meantime, American consumers can expect to pay more for their burgers and steaks.
Whether this will have a long-term impact on the US economy remains to be seen. One thing is certain, however: the Australian beef industry will not go down without a fight.
