IRELAND’S breeze-up consignors face a new threat to their business model following news this week that the European Union is considering imposing tariffs on the importation of pure-bred horses from America. That’s if the US goes ahead with its plans to put tariffs on European exports to the States.

It’s estimated that Europeans buy an average of 140 yearlings at Keeneland every September. A few are multi-million dollar purchases by Coolmore and Godolphin but the majority are bought by Irish breeze-up consignors for resale the following spring on the European sales circuit.

Last Saturday’s 2000 Guineas winner Ruling Court is the best example of an Irish yearling purchase at Keeneland which turned into a hugely profitable sale in Europe. Norman Williamson bought the Justify colt for $150,000 and sold it to Godolphin for $2.3 million.

In 2017 Willie Browne sold a $15,000 Street Sense colt for €1.4 million and just two weeks ago Thomond O’Mara sold a $26,000 Keeneland purchase for £160,000 at Doncaster.

Implications

Mick Donohoe, bloodstock agent with BBA Ireland, said: “The tariffs will have huge implications for the breeze-up market if they are introduced. The breeze-up consignors have created a niche market by importing these US-bred yearlings and offering them for sale in Europe. I buy quite a few of them myself at the European sales for clients in the Middle East, where a lot of the racing is on dirt tracks.

“If trade is hampered it will also be detrimental to the US bloodstock industry as the breeze-up horses effectively advertise American sires in Europe.”

Donohoe quoted the example of last year’s Royal Ascot Group 2 winner Shareholder, bought at Keeneland by Mickey Cleere for $62,000 and sold at Arqana for €460,000. The Norfolk Stakes winner is by Not This Time, a leading sire in America but a stallion with no previous European profile.

Brendan Holland, chairman of the Breeze Up Consignors Association, said: “The tariffs won’t affect us until September if they happen at all. The breeze-up market is an international one. A large number of buyers are from the Middle East, Scandinavia and North America, all places where they race on dirt. It’s not that US-bred horses are better but they give buyers a choice, whether they want to race on turf or dirt.”

Holland acknowledged that this year’s breeze-up season has seen booming trade. “We were hopeful on the back of a strong yearling market and also the results on the track. We would have been disappointed if there hadn’t been competition for the very top horses, but the clearance rate has also been very good. It’s better than the American breeze-up sales, so it’s much healthier in that respect.”

President Trump

The US-EU tariff row began on April 2nd when President Trump unveiled plans to impose tariffs ranging from 10% to 49% on goods from over 100 countries being imported into the US. The European Union tariff was set at 20% but, following stock market falls and pressure from business organisations, on April 9th President Trump announced a 90-day pause of the EU-specific 20% tariff, leaving in force a 10% tariff until July 8th.

In a statement the EU said: “Since the US imposed its unjustified and harmful tariffs, the EU has prioritised finding a mutually beneficial and balanced solution through negotiations, including within the framework of the 90-day partial suspension of tariffs announced by the US. These negotiations are ongoing both at political and technical level.

“The EU continues to prepare potential countermeasures to defend its consumers and industry, in parallel with the negotiations and in case these fail to deliver a satisfactory outcome. While the public consultation is a necessary step in this process, it does not automatically result in the adoption of countermeasures.”

The European Commission is now inviting “anyone affected by potential rebalancing measures currently being considered by the EU” to submit their views by June 10th.

“On the basis of the collected input, the Commission will finalise its proposal for the adoption of countermeasures. Once this process is completed, the Commission aims to have the legal act imposing the countermeasures ready to use in case negotiations with the US do not produce a satisfactory result.”

This week the US and UK governments unveiled a draft trade agreement which will see a 10% blanket tariff on US imports of British goods, giving Britain a theoretical advantage over the EU, should the 20% tariff kick in from July.