May 9, 2025
(AMERICAN TRADE POLICY HANDS AUSTRALIAN BEEF A TOP SLOT)
May 9, 2025
Hello everyone
The Fed left rates unchanged, as expected, citing inflation concerns and continued uncertainty across the economic landscape.
Australia scores big thanks to Trump
President Trump has just gifted Australia near monopoly status in China’s almost $5 billion premium beef market.
Chinese officials have effectively blocked American beef from entering the country, leaving Australia with the top of the market almost to itself. America sold $2.4 billion (US$1.6 billion) to China in 2024.
America’s missteps with China have put Australia in a very fortunate position, where they should benefit handsomely.
Beef is Australia’s biggest agricultural export to China, worth more than the wine and lobster trade combined. Australian farmers sold $2.2 billion worth of beef to China in 2024, making it Australia’s second biggest beef market after America (which bought $4.4 billion worth of Australian beef to the chagrin of the Trump administration).
With billions of premium beef sales potentially up for grabs, a herd of Australian beef exporters will fly into Shanghai within a fortnight for SIAL China, an important trade event for the food and beverage industry in the world’s second biggest economy.
Since securing a second term as Prime Minister of Australia last weekend, Anthony Albanese has been enjoying praise from Beijing, and Chinese media highlighting the prospects of future trade ties between Australia and China.
Australian wine exporters, along with exporters of cotton, timber, wheat, and lobsters, are also experiencing a role reversal, as these former victims of Beijing’s trade restrictions now find themselves benefiting from Chinese trade imposts on America and Canada.
Favourable bilateral politics – and a desire to find non-American supplies – also helped Australian gas giant Woodside recently snare a 15-year-long supply agreement with a Chinese state-owned giant.
Beijing’s first strike on the US herd came in March, as Chinese officials refused to renew trading licenses for American beef companies. Even if it lands at the port, they are turning it away.
In April, Mr Xi responded to Mr Trump’s 145 per cent tariffs on China with a 125 per cent tariff imposed on American imports. Even if American beef could get into China, those tariffs would decimate the trade.
Kevin Wang, A Beijing based sales manager of high-end beef importer Tenderplus, said “People are looking for Australian partners to import beef. Some have already flown to Australia to talk with trade partners.”
Menus have already been reprinted at premium restaurants around China. Even the most patriotically American places are looking increasingly Australian.
Americans digesting tariffs on Australian beef.
The Shanghai and Beijing branches of New York institution Wolfgang’s Steakhouse are now selling Australian porterhouse, striploin, rib eye, and filet mignon as its supplies of American beef are two weeks away from extinction.
In the centre of Beijing, we find Morton’s, which is owned by Houston billionaire Tilman Fertitta. Here, the restaurant has swapped its house red from an American drop to a Clare Valley Shiraz, a very good match with its Australian porterhouse from Rangers Valley in NSW’s northern tablelands.
China’s biggest sources of beef are Brazil and Argentina, but they sell at the cheaper end of the market.
Restrictions on other high-end sellers in Japan and Canada effectively shut them out of China’s market.
The results of Beijing’s “safeguards” investigation, due in the second half of the year, could see it increase tariffs on foreign suppliers. High-volume, low-cost sellers look to be most at risk, but it could shrink the size of China’s market considerably – including the premium end.
Australian Shadow Trade Minister, Kevin Hogan, looks beyond trade negotiations and considers the macro landscape.
Watch this space.
Move over MicroStrategy, Strive is offering a new product
A new NASDAQ listed firm – Strive - has just announced its merger with Asset Entities, creating the first publicly traded Bitcoin treasury company.
The firm will oversee $2 billion of assets.
The agreement will allow the merged company to carry out aggressive purchases of Bitcoin through new financial products, like BlackRock and Greyscale.
Strive Enterprises was co-founded in 2022 by Vivek Ramaswamy and Anson Frericks. The new firm will be led by Strive CEO Matt Cole, who previously managed a $70 billion fixed income portfolio.
Several strategies will be available under Cole’s leadership.
One strategy will be a Bitcoin for equity tax-free exchange, which will be structured under Section 351 of the IRS tax code.
Strive Enterprises will own 94.2% of the newly combined public company, while shareholders of Asset Entities will receive a 5.8% share.
It appears Strive is executing a similar playbook to Strategy and Metaplanet in terms of centralizing ownership, utilizing equity and debt financing to accumulate Bitcoin, and treating it as a treasury reserve asset.
Although it could also dilute its equity, it is taking risks to maximize long-term value by aggressively deploying capital in BTC. However, Strive’s section 351 tax-free exchange of Bitcoins for equity is different from both Metaplanet and Strategy. If successful, Strive could persuade Bitcoin holders to trade their Bitcoin for equity without having to pay a tax.
This article is only an item of interest, not a recommendation to buy any products marketed by Strive.
Cheers
Jacquie
