Prominent figures from the bloodstock sales world have said they are assessing the economic implications of the sweeping range of controversial trade tariffs being introduced by United States President Donald Trump.
Trump asserts the policy will result in new jobs and investment in his home nation, but economic experts have countered with warnings of rising prices for Americans and a wider trade war as countries enact retaliatory measures.
Given the significant impact U.S.-based buyers have had at European sales in recent years, particularly in the yearling and breeding stock markets, these tariffs appear to present an unwanted barrier to trade.
More than 1,600 horses have been permanently imported into the U.S. from Britain and Ireland over the last four years. Under Trump's tariffs imports arriving from Britain look set to incur a 10% tariff, while those coming from the European Union will be charged 20%.
Henry Beeby, chief executive of the Goffs group, which hosts major sales across Britain and Ireland, acknowledged the tariffs represent "a complication we could do without," but said that gaining clarity over the finer details was his immediate priority.
"It is definitely too soon to draw any finite conclusions," Beeby said. "There's a lot of the game to be played in that it's the beginning of April, and we're really looking towards the yearling sales where this is going to have the most impact in the first instance. A lot can change, and I believe even President Trump himself has said that there's a lot of negotiations to be had, so I wouldn't be jumping to any finite conclusions."
Those sentiments were echoed by Jason Singh, associate director of marketing at Tattersalls, who said: "Tattersalls are maintaining a watching brief on U.S. tariffs, aware that any changes could have wider implications for those buying and selling in the Thoroughbred market."
Beeby said he hoped Martin Heydon, Ireland's minister for agriculture, food, and the marine, would be able to provide answers to some of the more pressing questions following his upcoming meeting with senior U.S. officials.
"Various people have given me various different interpretations of what it all means," said Beeby. "Some have said this doesn't apply to certain categories of animal, including Thoroughbred racehorses, so whether it does or doesn't needs to be clarified. I've also been told that it's the point of origin of the animal, rather than where they were sourced. This would mean an Irish horse sold in England will be charged at 20%, if it applies, and an English horse sold in Ireland will be charged at 10%.
"The fact that the minister for agriculture in Ireland, Martin Heydon, is going to be in America next week will help us get some clarity. I'd expect he'll ask all the pertinent questions because he's very well-versed and knowledgeable when it comes to Thoroughbreds and racing."
Beeby also stressed that not all U.S. purchasers invest with export in mind. With European sales having the unique selling point of blue-chip turf pedigrees, American owners regularly buy in either Britain, Ireland, or France and leave the horse to be trained in the same country, at least initially.
"From an Irish point of view, a significant number of American buyers, last year and the year before, bought at the Orby Sale and left the horse with an Irish trainer," he said. "They like having their horse's 2-year-old career in Ireland, they can target our bonuses and the Goffs Million, and then decide whether to export the horse to America after that.
"Whatever happens, we understand that American buyers are looking for increasing numbers of turf horses, so I think they will continue to shop here. Whether they adjust their thinking in terms of price remains to be seen."
Although any potential impact is likely to be more pronounced at the yearling sales, the upcoming breeze-up season may provide an early indicator as to changing spending habits of U.S. buyers. But, for the time being, Beeby said it will be business as usual for the likes of Goffs.
"Of course, it's a complication we could do without because uncertainty is the enemy of all vibrant markets," he said. "Anything that puts uncertainty into the global economy is not good for selling a luxury item like a Thoroughbred racehorse.
"By the same token, to quote my late father, focus on the things over which you have control. We have got a bit of time and we'll be working hard to get clarity in that time, but this won't change our approach in that we will be campaigning proactively in the United States because we believe American buyers will still be looking for Irish Thoroughbreds."
Recent American Purchases in Europe
Last year's record-breaking Tattersalls October Yearling Sale provides a clear illustration of the point as more than 70 lots were purchased by U.S.-based buyers. In his end-of-sale statement, Tattersalls chairman Edmond Mahony went so far as to highlight the "large contingent of American buyers making a massive contribution" to the Book 1 market.
A roll call featuring U.S. grade 1 winners Aunt Pearl, Digital Age, Domestic Spending, McKulick (GB, and Newspaperofrecord highlights that American connections are ready, willing, and able to target British- and Irish-bred stock for their home nation's expanding turf program.
By way of example, Mike Ryan bid 250,000 guineas to secure Program Trading at Book 1 in 2021. Trump's tariffs would see an additional 25,000 guineas (approx. US$33,400 at current rates) being added to the owner's bill if the same sum was spent this year.
The difference is even more pronounced for countries within the EU. 2019 Preakness Stakes (G1) winner War of Will was purchased at the 2018 Arqana Breeze-Up Sale in Deauville for €250,000 by agent Justin Casse. Under Trump's policy, that figure would see €50,000 (approx. US$55,000) added to the price.
