New tariffs announced by the administration of President Donald Trump are likely to lead to significant but refundable bond payments for horses imported to the United States from a variety of countries for racing or breeding, while horses imported for the purposes of sale will face the full brunt of the new fees.
The new tariffs, which go into effect in stages on Saturday and on April 9, will impact horses being imported from countries with significant equine cross-border trade with the U.S., including Great Britain, Australia, Japan, and the countries within the European Union. The latest round of tariffs did not target Canada, leaving in place equine policies that are part of the two countries’ existing trade deal.
On Saturday, goods from all countries with the exception of Canada and Mexico will face a 10 percent tariff when imported into the United States. On April 9, additional tariffs will be applied to goods from other countries, including a 14 percent addition on Japan and a 10 percent addition on the EU countries. Tariffs on imports from Great Britain and Australia will remain at 10 percent on April 9.
According to Thomas Meis, the communications director for the National Thoroughbred Racing Association, which has been working with Trump Administration officials for clarity on whether the tariffs apply to horses, any horse imported to the U.S. for the purposes of a sale will be taxed at the appropriate rate beginning April 5, with the additional tax due on all horses kicking in on April 9, depending on the country of origin.
While importing horses to the U.S. to sell them is relatively rare, far more horses are imported to the country for the purposes of making one or more starts stateside. As an example, a total of 80 horses from international jurisdictions were entered in Breeders’ Cup races last year, a record for the event.
Current import regulations differentiate between livestock that is intended for sale and that which is imported for “competition,” which is defined by the length of stay. A horse that does not change hands while in the U.S. for less than a calendar year is classified as being imported on a temporary basis and subject to a bond rather than a tariff.
However, while no tariffs applied to those horses in the past, the new tariff structure will require the importer of the horse to post a bond when the horse is imported, with the value of the bond based on the tariff rate for the country, according to Meis, who cautioned that the NTRA has not yet gotten clear guidance from the Trump Administration on the policies. The bonds are refundable when the horse returns to its home country.
The language for the value of the bond requires a payment of twice the tariff rate from the country of origin. So, for a horse imported from Japan to run in a Breeders’ Cup race, the bond will be 48 percent of the horse’s value at the time of importation – twice the 24 percent general tariff rate set to go into effect on April 9.
For countries within the EU (which includes Ireland), where the post-April 9 tariff is 20 percent, the bond would be 40 percent of the tariff. For Australia and Great Britain, where the tariff rate after April 9 will remain 10 percent, the bond value will be 20 percent the value of the horse.
The value of the horse is typically determined by the importer at the time of importation, but those values can be audited.
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