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The European Union and United States have agreed to a new political deal on tariffs and trade, aimed at restoring stability and predictability in their economic relationship and strengthening transatlantic supply chains, according to a recent press release from the European Commission. The agreement was reached during a meeting in Algiers on July 27 between European Commission President Ursula von der Leyen and US President Donald Trump. It marks the beginning of a broader process to deepen economic cooperation and improve market access. Under the deal, the US will apply a single, all-inclusive tariff ceiling of 15% on nearly all EU goods starting Aug. 1. This includes sectors previously subject to significantly higher tariffs, such as cars and car parts, which currently face combined tariffs of up to 27.5%. If the US most favoured nation (MFN) tariff exceeds 15%, only the MFN rate will apply, with no additional duties. Strategic EU exports — including aircraft and parts, select chemicals, and certain generics — will see US tariffs rolled back to pre-2025 levels. The two sides also agreed to continue negotiations to expand the list of products receiving special treatment. To address global overcapacity, the EU and US will coordinate on tariff rate quotas for metals such as steel, aluminium and copper, replacing current 50% tariffs with reduced and more stable rates. The EU will liberalize limited volumes of trade in areas of mutual interest, cutting roughly €5 billion in duties annually on US imports while maintaining protection for sensitive EU sectors. The EU will eliminate remaining low-level tariffs on industrial goods and improve market access for a number of US products, including Alaska pollock, salmon and shrimp, under tariff rate quotas. Additionally, the EU will open access for up to €7.5 billion worth of US agricultural exports, such as soya bean oil, seeds, grains, and processed goods like ketchup and biscuits. These concessions are designed to ease input costs for EU producers without undermining agricultural protections. The agreement also covers regulatory cooperation. The EU and US will work together on automotive standards and sanitary measures, while expanding mutual recognition of conformity assessments in certain sectors. They also committed to closer coordination on investment screening, export controls, and reducing non-market trade distortions. On energy, the EU plans to procure up to $750 billion (about €700 billion) in US-sourced energy — including liquified natural gas, oil, and nuclear products — over the next three years to replace Russian supplies. The EU will also purchase €40 billion worth of US-manufactured AI chips to bolster its digital infrastructure. In return, EU firms plan to invest at least $600 billion (about €550 billion) in US sectors by 2029, complementing the €2.4 trillion already invested in the US market. The July 27 agreement is political in nature and not legally binding. Implementation of the deal will require further negotiations in line with internal procedures on both sides. The European Commission said the agreement protects EU regulatory sovereignty and preserves sensitive areas of agriculture, including beef and poultry.
- USDA Weekly Export Sales (Beef & Pork):
- Beef: Net sales for 2025 were 8,500 MT, down 49% from the prior week and 30% from the 4-week average, with increases to Japan, Canada, South Korea, Taiwan, and Mexico offset by reductions for the UK. Exports of 12,300 MT were down 2% from the previous week, primarily to Japan, South Korea, Mexico, Taiwan, and Canada.
- Pork: Net sales of 39,500 MT for 2025 surged, up significantly from the prior week and 85% above the 4-week average, driven by Mexico, Japan, South Korea, Colombia, and Honduras. Exports of 26,800 MT were down 3% from the prior week, mainly to Mexico, Japan, South Korea, China, and Colombia.
- U.S. Cattle Inventory (July 2025):
- The USDA reports a U.S. cattle inventory of 94.2 million head, including 28.7 million beef cows, 9.45 million dairy cows, and a 33.1 million head calf crop (down from 33.52 million in 2024). The herd continues to contract, with a 1.3% smaller 2025 calf crop and low heifer retention signaling no immediate expansion. Stabilization is hinted at, but high calf prices and interest rates deter rebuilding, potentially leading to feedlot and packing plant consolidations.
- Pilgrim’s Chicken Plant Investment:
- Pilgrim’s, backed by JBS, is investing $400 million in a new chicken plant in LaFayette, Georgia, to meet rising U.S. chicken demand, supporting 630 jobs and brands like Just Bare and Gold Kist. Construction starts in fall 2025, with completion by 2027, driven by 14.8% Q1 margins and near-parity chicken consumption with red meat by 2026.
- Global Grain and Feed Updates:
- Australia: Improved rainfall boosts 2025-26 wheat (31 million MT) and barley (13 million MT) production forecasts, both above 10-year averages. Wheat exports are expected to rise, while barley exports may decline due to tight supplies.
- Canada: Wheat production faces drought-related challenges in 2025-26, with strong durum exports (5 million MT YTD) but tight feed wheat markets. Tariff uncertainties add volatility.
- USDA Food Price Inflation Forecasts:
- 2026: All food prices to rise 2.7%, restaurant prices 3.1%, and grocery prices 1.6%, below 20-year averages.
- 2025: All food prices up 2.9%, restaurant prices revised to 4.0%, beef prices up 8.8% due to tight supplies, and egg prices up 24.6% (down from 33.2%), though volatile with a projected 18.4% drop in 2026.
- Global Dairy Report:
- U.S. milk production is up 1.1% in 2025, with strong butter and cheese exports. New Zealand and Argentina see production gains, while EU output declines due to regulations and low profitability. Australia’s milk production dips slightly due to drought. EU cheese production remains stable, with marginal export growth to the UK, Japan, and South Korea.
- Weekly USDA Dairy Report:
- Butter prices fell to $2.4565/lb, cheese barrels at $1.6530/lb and blocks at $1.6425/lb, nonfat dry milk rose to $1.2915/lb, and dry whey dropped to $0.5425/lb. Domestic demand varies, with strong international demand for butter and cheese, though milk production is seasonally low. Cream and condensed skim supplies are ample.
- Brazilian Chicken Exports:
- Despite avian flu outbreaks, Brazilian chicken exports to Arab nations remained stable at $1.75 billion in H1 2025, down just 0.53% year-on-year, due to strong sanitary standards and long-term contracts. Limited restrictions from Saudi Arabia, Oman, and Qatar ensure optimism for sustained demand.
- Zimbabwe Land Tenure Policy (Contextual Relevance):
- Zimbabwe’s new policy allows Land Reform Programme beneficiaries to use land as collateral or sell it, but it’s unconstitutional as agricultural land is state-owned, requiring a referendum to amend. The restriction to “indigenous Zimbabweans” violates equal land access rights, raising concerns about elite profiteering.
- South African Context (from Prior Inputs):
- The U.S. 30% tariff on South African exports, effective August 7, 2025, threatens industries like citrus, wine, and poultry, with potential job losses and economic contraction. South Africa’s government is negotiating and offering an Export Assistance Service, while critics like AfriForum blame ANC policies. Poultry producers demand clarity on a U.S. import quota increase to 72,000 MT, seen as unfair without reciprocal access.
- The U.S. has imposed reciprocal tariffs of 10-50% on 69 countries, including 30% on South Africa, citing trade imbalances and geopolitical issues. Exemptions apply to certain products (e.g., copper, pharmaceuticals, energy). A tentative U.S.-EU deal sets a 15% tariff, with the EU committing to $750 billion in U.S. energy purchases by 2028. Japan faces a 15% tariff with $550 billion in investments, and other deals with the UK, Indonesia, and others aim to protect U.S. industries and expand market access. These policies drive global trade volatility, impacting South African maize, poultry, and other exports, while front-loading shipments strain logistics. Economists warn of higher consumer prices and supply chain disruptions, with long-term benefits for U.S. workers but short-term pain for trading partners like South Africa.details on beef exports global pork markets.
Exports of US beef trended lower in May, due primarily to steep declines in shipments to China, according to data released by USDA and compiled by the US Meat Export Federation (USMEF).
In April and the first half of May, China’s total tariff rate for US beef was 147%. Even following a May 14 joint announcement temporarily easing tariffs for 90 days, China’s rates still stand at 32% for US beef. In addition, most US beef production is ineligible due to China’s failure – since February – to renew expiring beef plant and cold storage facility registrations.
“The situation with China obviously had a severe impact on May exports, underscoring the importance of diversification and further development of alternative markets,” said USMEF president and CEO Dan Halstrom. “The need for progress in the US-China trade negotiations is extremely urgent because tariffs could soar again on August 12. This deadline is already impacting exporters’ decisions about whether to continue producing for the Chinese market. On the bright side, amid all this uncertainty, demand for US red meat remains robust in many key regions.”
Beef exports totalled 97,266 mt in May, down 12% and the lowest in nearly five years. Export value was $798.7 million, down 11.5% and the lowest in 18 months. January-May beef exports were down 5% from last year’s pace at 508,293 mt, while value declined 3% to $4.15 billion.
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