US raises tariff on Australian lamb as separate safeguard investigation advances

Australian sheep-meat trade faces two US restrictions

Australian lamb exporters face a higher general tariff in the United States while a separate investigation examines whether imported lamb is harming American producers. The US administration raised the tariff on Australian goods from 10% to 12.5%, citing what it described as inadequate enforcement against goods made with forced labour. The Associated Press reported that the new duties were imposed on 60 economies at rates ranging from 10% to 12.5%.

Australian Trade Minister Don Farrell rejected the US claims and called the higher tariff completely unjustified. He said Canberra would continue lobbying the Office of the US Trade Representative to remove tariffs on Australian goods. The measure replaces the previous 10% charge, increasing the tariff burden by 2.5 percentage points rather than adding 12.5% to the former rate.

Safeguard case creates a second layer of risk

Separately, the US International Trade Commission began a global safeguard investigation on July 13, 2026, at the request of the US Trade Representative. The commission will determine whether lamb imports have increased enough to cause, or threaten to cause, serious injury to the domestic industry. ABC News reported that the inquiry is expected to be completed within 120 days. Possible remedies in a safeguard case can include additional tariffs, quotas or tariff-rate quotas.

The investigation covers imports from all origins and is not formally directed only at Australia. However, Australia is the largest foreign supplier. ABC News reported that the country shipped about 100,000 tonnes of sheep meat worth more than $1 billion to the United States in 2025. Commodity analyst Matt Dalgleish estimated that Australia accounts for 70% to 75% of US sheep-meat imports, with New Zealand ranking second.

US producers seek protection as domestic output contracts

The inquiry follows an October 2025 petition from the American Sheep Industry Association, which argued that lower-priced imports were displacing domestic production and weakening profitability. The association represents 42 state organisations and 100,000 US sheep producers. Separate proposals reported by Sheep Central have included a 30% tariff on imported sheep and lamb products and requests for tariff-rate quotas.

Australian industry representatives dispute the claim that imports are responsible for the long decline in US production. Dalgleish told ABC News that American sheep-meat output was about 160,000 tonnes in the 1990s but has struggled to exceed 60,000 tonnes during the past decade. Sheep Central also reported that first-quarter 2026 US lamb and mutton production fell 2.7%, even though slaughter increased by 0.8% to 546,200 head. Cold-storage inventories stood at 16.2 million pounds on March 31, down 14.6% from a year earlier and at their lowest level since 2011.

Higher costs could affect supply and consumption

Market data cited by Sheep Central point to strong prices rather than a depressed US lamb market. Domestic lamb prices reached record levels in May, with heavy lambs trading at about A$17 per kilogram in the United States compared with A$11–A$11.50 per kilogram in Australia. In the 12 months to April 28, Australian lamb exports to the US increased to 28,621 tonnes from 27,544 tonnes, although shipments of higher-value chilled meat declined.

Steiner Consulting Group economist Altin Kalo said import duties could support US producer prices temporarily but would reduce product availability and risk lowering lamb consumption. Domestic production is not positioned to replace imported supply across important retail and food-service channels, he said. Australian processors and exporters must now absorb the higher 12.5% tariff, pass it through to US buyers or adjust pricing, while preparing evidence for an investigation that could result in additional restrictions.