Trade Minister Todd McClay has warned that the United States is preparing to launch a fresh trade investigation into New Zealand lamb imports within the coming weeks, a move that could reopen the door to higher tariffs on a market that took more than $600 million in sheepmeat from local farmers last year.
Speaking to RNZ, McClay said his officials had picked up clear signals from Washington that the Trump administration was hunting for a fresh legal hook to reinstate the higher lamb tariffs that the United States Supreme Court struck down earlier in 2026. “We know they are doing investigations at the moment, so-called investigations, they are looking for other ways to put that tariff wall back up,” the trade minister said.
The investigation is expected to look at New Zealand and Australian lamb together, with American sheep producers complaining that imports from the southern hemisphere are undercutting their prices and squeezing out domestic supply. The push from inside the United States industry is not new. The American Sheep Industry Association formally lodged a request for a trade probe back in October, according to Farmers Weekly, arguing that surging volumes from New Zealand and Australia were threatening the viability of American sheep farms.
McClay was blunt about how unpredictable the process is once it lands on the president’s desk. “But the nature of it is when the president decides, the president decides, and so if he decides, you know, that if he’s had a bad lamp chop or something, who knows what’s going to happen,” he said.
New Zealand sheepmeat currently faces a 10 percent additional tariff entering the United States, which sits on top of an underlying most favoured nation rate of around one percent. That was the position settled in February, after the Supreme Court ruled that the 15 percent reciprocal tariff Trump had imposed under emergency economic powers was illegal. The administration replaced the struck down rate with a 10 percent global tariff invoked under Section 122 of the Trade Act of 1964, a workaround that kept beef on its existing quota arrangement but pulled lamb into the higher band.
Beef + Lamb New Zealand chair Kate Acland told the organisation’s members at the time that the outcome was a mixed result. “We welcome the tariff exemption on New Zealand beef exports to the United States, however we are disappointed our sheepmeat exports will be affected by the global 10 per cent tariff,” Acland said. The shift at least put New Zealand back on the same footing as Australia, the other main southern hemisphere supplier of lamb to American supermarkets.
The fear inside the meat industry is that an unfair trade practices investigation, even if its findings are weak, would give the White House the political cover to lift the rate back to 15 percent or higher, particularly if it helped shore up votes in sheep farming states such as Wyoming, Colorado and South Dakota. McClay acknowledged the risk that domestic American politics rather than economics could end up driving the outcome.
For New Zealand exporters, the headline number is the more than $600 million of sheepmeat that flowed into the United States in 2025, much of it lamb. The American market is not the largest destination for New Zealand lamb, with China still taking the bulk of the trade, but it is one of the highest value channels because American consumers tend to buy premium cuts at restaurant prices. Any tariff increase therefore lands hardest on the chilled, branded, food service end of the trade where the margins are best.
The industry’s standard counter argument, that New Zealand lamb arrives during the American off season and complements rather than competes with domestic production, was put again recently by Meat Industry Association chair Nathan Guy. “We do not believe that we are a threat at all because of our counter-seasonality,” Guy said. The same point is being made by McClay’s officials in their conversations with United States counterparts, who have been told that New Zealand is supplying a quality product, is not flooding the American market and is in fact helping local lamb farmers grow demand for the category.
How much of that argument lands on receptive ears in Washington is another question. The Trump administration has shown throughout its second term that it is willing to use tariffs as a blunt political instrument and to override the advice of its own officials when it suits a domestic story. McClay’s diplomatic tone, that he is engaging with American counterparts and reminding them of the partnership, is the only public lever a small trading nation has, but it offers little protection if the president decides to move.
Sheep and beef farmers will also be watching what happens next door. If the same investigation tightens tariffs on Australian lamb, the Albanese government will face pressure to respond, and any joint Australia and New Zealand pushback would be far more visible in Washington than a solo New Zealand effort. For now, McClay’s message to the rural sector is to brace for an announcement within weeks rather than months, and to assume that the door is open to the tariff wall going back up.
What do you think the New Zealand government should do if the United States lifts lamb tariffs again? Share your views in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job π
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