NTRA Issues Update on Equine Impact of Latest Tariffs

Despite the Supreme Court striking down the President's use of national security law to enforce tariffs in February, a new host of tariffs were just recently announced. While these tariffs affect countries around the world, they will not directly impact our sport in a new way. First, the new Section 301 tariffs that took effect July 24 cover imports from 60 countries at 10% or 12.5%. Live horses are not product-exempt—so permanent imports (sales purchases, stallion acquisitions) will be subject to the new duties. This results in effectively no new change—permanent imports were subject to the 10% to 12.5% rate previously. For the EU, the 10% rate is applied net of the product's existing MFN duty—meaning 10% is the all-in ceiling, not a surcharge stacked on top of baseline rates. Japan receives the same net-of-MFN treatment at 12.5%. The UK is a flat 10%, and Australia and New Zealand a flat 12.5%. That said, there are two important carve-outs. Horses crossing from Canada and Mexico under USMCA remain fully duty-free. And critically, the new duties do not apply to goods entered under Chapter 98—which includes temporary importation under bond for horses coming in to race, breed, or compete. That's a meaningful improvement over last year's tariff rounds, where temporary imports still carried bond exposure tied to the tariff. In short: horses shipping in for racing should see no new duty burden. Second, the separate 50% tariffs on Canadian goods announced this week (effective August 19) are targeted at specific product categories—dairy, alcohol, autos, and assorted consumer goods. Live animals are not covered, so no anticipated impact on cross-border horse movement there. Agriculture Subcommittee Holds Hearing on CFTC On Tuesday, July 21, the House Agriculture Subcommittee on Commodity Markets, Digital Assets, and Rural Development held a hearing titled, "Examining Customer Protections and Market Integrity in Sports Event Prediction Markets." While this was more of an overview hearing, it marked an important first step for Congress wading into the waters of legislation regarding prediction markets. Questions from legislators were largely high-level and focused on the tension between CFTC and states/tribes. While there wasn't a focus on horseracing, it's important to be aware of the potential for federal regulation in this space. There were questions regarding states' rights, the definition of a contract vs. a wager, and what, if any, responsibilities a prediction market has to society. The Chairman of the subcommittee, Rep. Dusty Johnson (R-SD), has said that this will be the first of many hearings, and that it would be "irresponsible" for Congress not to get involved. As the meetings continue, we will keep you updated on what the Committee and Congress as a whole decide to do regarding prediction markets. Trade Agreement to be ReNegotiated On July 1, US Trade Representative Jamieson Greer confirmed the United States decided against renewing the US-Mexico-Canada Agreement (USMCA), choosing to undertake annual reviews of the Agreement instead. The USMCA states that within six years of entry into force, (July 1, 2026), the parties must conduct a "joint review" of the Agreement. If any country does not confirm its intent to extend the Agreement for another 16-year period, as the United States just did, the parties must meet for a joint review every year until the Agreement expires (on July 1, 2036), or until all parties confirm their intent to extend the Agreement. Because of this, the US, Mexico, and Canada will now officially enter annual joint reviews for up to ten years. Practically speaking, the USMCA remains in force, though now it is subject to potential change. The United States may confirm its agreement to extend the USMCA for another 16-year period at any time until the pact expires. The United States could also withdraw from USMCA—in that case, the United States' participation in the deal would terminate six months later, and the United States could pursue bilateral trade agreements with Canada and Mexico. However, it is expected that the United States will continue negotiations, and the current USMCA rules will remain in effect.