A major shift in US trade policy has reduced tariffs on New Zealand sheepmeat but added new uncertainty. Beef remains exempt, and further changes are possible. Here’s what this may mean for farmers.
What happened
Over the weekend, the US Supreme Court overturned President Trump’s ‘reciprocal tariffs’ imposed under the International Emergency Economic Powers Act (IEEPA), removing the 15% tariff on New Zealand sheepmeat. The additional tariffs on beef had already been removed in November.
In response, the Trump administration issued a new Executive Order under Section 122 of the Trade Act of 1964. This allows the President to apply a temporary global tariff of up to 15% on balance-of-payments grounds. The administration has set this tariff at 10% for all products from all countries.
The same exemptions that applied under the IEEPA regime remain in place, meaning New Zealand beef continues to be exempt.
“We welcome the tariff exemption on New Zealand beef exports to the United States; however we are disappointed our sheepmeat exports will be affected by the global 10 per cent tariff. We remain of the view that tariffs are unjustified and will have an inflationary impact on the United States economy,” says Kate Acland Chair of B+LNZ.
Breaking down the tariff changes
- Sheepmeat: The additional tariff has dropped from 15% to 10%. Combined with the MFN rate of around 1%, New Zealand sheepmeat imports into the US now face a tariff of roughly 11% in total.
- Beef: New Zealand beef continues to face only the in-quota tariff rate of around 1%, with no additional tariff applied. New Zealand has a 213,402 tonnes country-specific tariff rate quota for beef.
New Zealand products now face the same tariff rate as Australian products, eliminating the competitive disadvantage New Zealand has experienced since August due to the differing ‘reciprocal tariffs’. This closes the previous gap between the two countries, although uncertainty still remains.
Implications for New Zealand meat exports
With the IEEPA option no longer available, the Trump administration may turn to other legal tools to target specific sectors. B+LNZ is meeting with MFAT officials and continues to work closely with the New Zealand Government and US stakeholders.
Despite the challenges, New Zealand red meat exporters have managed the tariffs well. Demand and prices in the US remain strong, supported by:
- A historically low US domestic beef herd
- Record US beef consumption
- Strong demand for New Zealand’s lean beef, which complements higher fat US beef in hamburgers
- New Zealand’s reliability, product attributes, and longstanding customer relationships
What happens next
President Trump has signalled the tariff could rise to 15%, which is permitted under Section 122. For now, the rate remains at 10%.
B+LNZ will continue advocating for open, rules-based trade.
Tariffs reduce market efficiency, limit consumer choice, and ultimately lower returns for farmers.
Acland says: “We will continue to monitor developments closely and keep farmers up to date with any news.”