A new safeguard tariff imposed by China is reshaping the outlook for Australia's beef exporters, who now face a 55 percent levy on the product they send to one of their most important markets. With the volume of beef going to China close to a key threshold, the industry says the change will force a significant rethink of where its product ends up.
According to an industry representative, the safeguard set a quota of 205,000 tonnes for Australian beef. That figure sits well below the roughly 300,000 tonnes Australia sent to China last year, a gap explained largely by the reference period that was used when the safeguard was set, leaving exporters with far less room than before.
The sector is already nearing that ceiling. The representative said exports were at around 90 percent of the quota, with additional product already on the water, meaning Australia is about to hit the safeguard limit. The 55 percent tariff is the first year of a three year arrangement, and the quota is expected to reset again next year.
China is described as Australia's second largest market for beef, and a particularly valuable one. Australian product occupies the premium, chilled beef segment that has been built up over years, supported by investment from exporters in programs designed to grow demand and strengthen the reputation of Australian beef among Chinese customers.
Faced with the higher tariff, exporters say they are looking to spread their sales more widely. The industry pointed to strong demand in North America, long standing large buyers in Japan and Korea, and growing appetite in Southeast Asia, noting that last year brought record exports to a range of nations including Thailand, Canada and the United Kingdom.
The representative stressed that Australia is only a small part of the picture for China, accounting for an estimated six to eight percent of Chinese beef imports. The safeguard, in China's view, was initiated to protect local farmers from imports, and its impact falls on all importing nations, with Brazilian beef also subject to the 55 percent tariff and likely to seek other markets.
On the political side, the industry said the Australian government had raised the issue at the highest levels, alongside other nations affected by the measure. While the sector said it preferred free and fair trade and did not welcome the challenge of large tariffs, it signalled it would keep supporting Chinese customers through the end of the year where possible.