Trump, Xi Jinping, climate: the biggest risks to beef exports

So says renowned economics commentator Saul Eslake, who today runs his own consultancy after decades with financial institutions ranging from ANZ and the Bank of America Merrill Lynch to McIntosh Securities and National Mutual Funds Management.

Speaking at the 2023 Australian Meat Industry Council conference on the Gold Coast this month, Mr Eslake said despite the fact there was an equal chance of Donald Trump ending up behind bars, he remained the front runner for the Republican nomination for president.

If he were to become US President again in January 2025 he would be unrestrained by any prospect for re-election in 2028, as he presumably was in his first term, Mr Eslake said.

"Relations between the US and its traditional allies are likely to again become more fraught as they were in his previous term," he said.

"Australia was largely immune to those difficulties because of the close alignment of prime ministers Turnbull and Morrison, something unlikely to be repeated with Albanese.

"Australia is one of the very few nations that the US runs a trade surplus with so we weren't, by his definition, 'cheating' but make no mistake, as economists say, the return of Trump would be a protectionist nightmare.

"Trump was openly contemptuous of the rules-based international order which has been so important for Australia in opening up export markets, especially for agricultural products."

He has pledged to impose a 10 per cent tariff on all imports into the US and increase them until the US trade deficit is eliminated, which would presumably apply to the 448,214 tonnes of beef which Australia is currently permitted to export tariff-free to the US under the AU-USFTA.

"It will, of course, be the American consumers who pay those tariffs as they always do but nonetheless what is a lucrative market for Australian beef exports would be at risk," Mr Eslake said.

The most likely alternative Republican presidential candidate is Florida governor Ron de Santis, which Mr Eslake described as "a Trump without the personal baggage and social media addiction."

"In policy terms, very little differs," he said.

China, meanwhile, is not going to be the locomotive of the world economy in the next ten years that it has been in the last 30, Mr Eslake said.

China is now Australia's largest market for meat exports, accounting for 22pc of the total by value.

Although not a primary target for Chinese trade sanctions against Australia beginning in 2022, the beef industry has become collateral damage with some meat exporters being locked out due to so-called technical difficulties.

While bilateral relations between China and Australia have begun to thaw since Labor came into power, meat exporters who were excluded from the Chinese market have, in most cases, yet to regain access.

It's not just geopolitical relations that is a risk - any military action involving China would likely see Australia expected by its allies to cease exports of a whole range of products, from iron ore down to beef, Mr Eslake said.

"The importance of diversifying away from the Chinese market, even though it is a lucrative and profitable one, has to be part of the long-term strategy for the red meat export industry," he said.

Finally, climate change is the other big risk pounding down on the sector.

"More severe and frequent adverse weather events means everything from higher insurance costs to greater volatility in livestock prices and slaughtering rates," Mr Eslake said.

"It will also impact economic conditions in Australia's principal export markets.

"And producers and processors will come under increasing pressure from governments and community groups to reduce emissions.

"To date, there's not much hard evidence that consumers anywhere, perhaps with the exception of New Zealand, are reducing their consumption of meat per capita as a response to climate change but it is certainly something this industry has to watch out for."