US-China Trade War: 6 Alarming Impacts as Australia’s Beef Surges in China

The US-China trade war has escalated, halting US beef exports to China and opening doors for Australian grain-fed beef to fill the gap. As of April 2025, Australia’s beef exports to China have surged by nearly 40%, driven by China’s retaliatory tariffs and a refusal to renew US abattoir licenses. While this presents a short-term win for Australian farmers, experts warn of a broader, more troubling economic picture. This blog explores the dynamics of the trade war, Australia’s role, and the risks lurking beneath the surface for global markets.

Table of Contents

• Introduction to the US-China Trade War
• Why US Beef Exports to China Stopped
• Australia’s Beef Export Boom
• Economic Opportunities for Australian Farmers
• The Bigger Picture: Global Trade Risks
• What’s Next for the US-China Trade War?
• Conclusion: A Fragile Opportunity

Introduction to the US-China Trade War

The US-China trade war, reignited by US President Donald Trump’s tariffs in early 2025, has disrupted global markets. A key casualty is US beef exports to China, which have plummeted to zero due to China’s 116% tariffs and licensing issues. Meanwhile, Australian grain-fed beef exports to China soared to 21,885 tonnes in February and March 2025, up 40% from last year, per Meat and Livestock Australia. This shift highlights how trade disputes reshape supply chains, but analysts caution that short-term gains may mask long-term economic challenges for Australia and beyond.

Why US Beef Exports to China Stopped

The collapse of US beef exports stems from two blows. First, China imposed retaliatory tariffs, raising duties on US beef to 116%, rendering it commercially unviable. Second, China has not renewed export licenses for about 300 US abattoirs, a move described by the US Meat Export Federation as a breach of the 2020 Phase One Agreement. As reported by ABC News, this has locked out $2.5 billion in US beef from China, its third-largest market. The combined effect has redirected Chinese demand to suppliers like Australia, Brazil, and Argentina.

Australia’s Beef Export Boom

Australia has seized the moment in the US-China trade war. With US beef sidelined, Chinese importers have turned to Australian grain-fed beef, prized for its quality and consistency. Meat and Livestock Australia reports a 40% export increase to China, driven by demand from restaurants and retail. Andrew Simpson of Bindaree Food Group noted at a Gold Coast conference that Australia is filling the gap left by US suppliers, particularly in high-end markets. A weaker Australian dollar—down 3 cents since March—further boosts competitiveness, making Australian beef more attractive than pricier US alternatives.

Economic Opportunities for Australian Farmers

For Australian farmers, the trade war is a rare opportunity. The surge in exports has driven beef prices up, with imported lean manufacturing beef hitting A$10.85/kg in the US, a 10% rise since tariffs began. In China, Australian producers are locking in orders, with some reporting an uptick in contracts, per ABC News. The China-Australia Free Trade Agreement (ChAFTA), which eliminated tariffs on Australian beef by 2026, gives Australia an edge over competitors like the US and EU. This could stabilize rural economies, especially in Queensland and New South Wales, where beef production thrives.

However, not all see unbridled optimism. Simon Stahl, CEO of The Casino Food Co-op, called the tariffs “collateral damage” for Australian producers, who still face a 10% US tariff on their $4 billion beef exports to America. While China’s demand is a boon, diversifying markets—like the EU, which pays well for Australian beef—remains a priority.

The Bigger Picture: Global Trade Risks

Despite Australia’s gains, the US-China trade war casts a long shadow. Shadow Trade Minister Kevin Hogan warned that a slowdown in US and Chinese economies could curb global demand for Australian exports, from beef to iron ore. Rabobank’s Michael Every echoed this, noting that tariffs disrupt growth in interconnected markets like Japan and South Korea, which buy A$2.6 billion and A$2.5 billion of Australian beef yearly. A global downturn could slash commodity prices, hitting Australia’s export-driven economy hard.

China’s retaliatory tariffs on US goods, including 10% on pork and dairy, signal broader trade friction. If other nations follow suit, supply chains could fracture, raising costs for consumers worldwide. Australian analyst Brett Stuart cautioned that China’s licensing delays might be a negotiation tactic, adding uncertainty to beef markets. For Australia, over-reliance on China—its largest trading partner at A$212.7 billion in 2023-24—poses risks if demand falters.

What’s Next for the US-China Trade War?

The trade war shows no signs of easing. Trump’s 90-day tariff pause on most countries (excluding China) offers temporary relief, but China’s 34% reciprocal tariffs on US goods, effective April 10, deepen the rift. Australian PM Anthony Albanese has vowed to avoid retaliatory tariffs, focusing on dispute resolution via the Australia-US Free Trade Agreement. Trade Minister Don Farrell suggested Europe’s high tariffs might spur renewed EU trade talks, potentially opening new beef markets.

For Australian farmers, the focus is resilience. Meat and Livestock Australia is investing in marketing to sustain demand in China, the Middle East, and the UK, where free trade agreements ease access. Yet, as global markets brace for volatility, Australia must balance short-term beef export gains with strategies to weather a potential economic storm.

Conclusion: A Fragile Opportunity

The US-China trade war has handed Australian beef producers a golden opportunity, with exports to China surging as US beef faces insurmountable barriers. However, this windfall comes with caveats. Global economic slowdowns, shifting trade alliances, and over-reliance on China threaten long-term stability. Australia’s farmers must navigate these choppy waters with caution, leveraging free trade agreements and diversifying markets to secure their future. As the trade war unfolds, the world watches whether Australia can turn a fleeting advantage into lasting prosperity—or if the bigger picture will overshadow today’s gains.