US-China Trade Tensions Shift Global Dairy Trade Dynamics

Trade tensions between the US and China, particularly the tariffs imposed by the Trump administration, have significantly impacted global dairy trade flows. As a result, Australian dairy exports to China increased by 5% by September 2025, as Asian buyers sought more reliable sources in Oceania amidst geopolitical uncertainties.

According to Dairy Australia insights manager Eliza Redfern, the tariffs have provided unexpected opportunities for Australian dairy exporters. This trend is partly driven by a 6% reduction in US dairy imports by China, alongside a 12% decline in exports to the Philippines, the third and fourth largest US export markets, respectively. Consequently, Australian exporters have captured a greater market share.

Additionally, the shift in trade dynamics is evident in specific product categories. For instance, Australian cheese exports to China increased by 23%, particularly fresh varieties, during the same period. Meanwhile, New Zealand also saw benefits from the trade changes, with exports to China rising by 7% and to Southeast Asia by 5% between February and July 2025.

Despite losses in China and the Philippines, US dairy exports showed resilience in other regions, with an overall increase of 2% from February to July 2025. This was achieved by redirecting supply chains to markets with less exposure to the trade dispute, such as Mexico, Canada, Japan, South Korea, and Vietnam.

Moreover, the easing of previous animal health concerns, such as bird flu in the US and blue tongue cattle disease in Europe, has created a more favorable supply-side environment, allowing exporters to capitalize on market opportunities created by the tariffs.