Australia escapes worst of Trump's tariffs but still bracing for turmoil in Asia
- Apr 4
- 4 min read
Australia escapes worst of Trump's tariffs but still bracing for turmoil in Asia
In summary:
Australia has avoided the "reciprocal tariffs" that have been placed on numerous US allies.
However, elevated tariffs on its Asian allies are expected to reduce demand.
Future Outlook
According to experts, the Australian economy is anticipated to experience a decrease in demand for iron ore, coal, and gas.
Australia has managed to avoid the most severe direct effects of Donald Trump's extensive "Liberation Day" tariffs, but experts caution that the president's efforts to disrupt global trade could still have dire economic and strategic consequences for the country.
Australia has been subjected to the Trump administration's flat 10 percent global tariff but has escaped the much higher "reciprocal tariffs" imposed by the US on many of its major trading partners.
Although the tariff will affect Australian farmers exporting beef to the US, the administration has exempted gold and pharmaceuticals—two of Australia's largest exports to the US—from this round of tariffs.
Prime Minister Anthony Albanese described the tariffs as "totally unwarranted" and "not the act of a friend," yet acknowledged that Australia had been treated more leniently than many other nations.
"There's no doubt that there's no-one that's got a better deal, and people will see that themselves,"
Australia escapes worst of Trump's tariffs but still bracing for turmoil in Asia
Mr. Albanese stated.
"That doesn't mean it's a good thing."
A government source informed the ABC that the outcome was the "least terrible" scenario Australia could have hoped for, but cautioned that Australian pharmaceuticals might still be affected in future tariff rounds.
The government is also deeply concerned about how these sweeping tariffs could trigger economic upheaval regionally and globally, impacting Australia.
Australia's largest trading partners and export markets have all faced much higher trade barriers from the White House, with China, Japan, and South Korea being hit with 34 percent, 24 percent, and 25 percent tariffs, respectively.
Analysts have warned that this could negatively impact the construction and manufacturing sectors in North Asia's major economies, reducing demand for Australia's significant exports of iron ore, coal, and gas.
Australia escapes worst of Trump's tariffs but still bracing for turmoil in Asia
Here's how tariffs work
Photo shows Donald Trump standing in front of the American flag
Here's what tariffs are and who pays for them.
Foreign Minister Penny Wong stated that Asian countries were among "the hardest hit."
"We do not underestimate the disruption these decisions will have on the economies of our region and the global system,"
she said.
"But we face those challenges calmly and maturely. We certainly won't be picking fights in our neighborhood."
'It will hurt'
Dr. Daniel Kiely from Curtin University told the ABC that the tariffs would "affect Australia not just directly, but indirectly."
"China, for example, is our major trading partner. Any slowdown in the Chinese economy is likely to hurt us here in Australia,"
he said.
"And in Western Australia in particular, with iron ore and other mineral and gas exports—that will hurt the economy."
While it's uncertain how the world's other major countries will react to the tariffs, China has previously warned it may retaliate, raising fears of a significant trade war between the world's two largest economies.
Live: Dutton puts defense on negotiating table on Trump's tariffs
Photo shows Peter Dutton standing in front of a bleak grey background with two Australian flags.
Anthony Albanese vows to avoid a "race to the bottom" after US President Donald Trump announced a series of global tariffs, including a 10 percent reciprocal tariff on Australian imports to the US. Follow live.
The Trump administration has also imposed substantial tariffs on most key Southeast Asian countries, which experts claim will undermine any US attempts to seriously challenge China's influence in the critical region.
Cambodia has been targeted with a 49 percent tariff, while Vietnam, Thailand, and Indonesia have been hit with 46 percent, 36 percent, and 32 percent tariffs, respectively.
Former senior State Department official Evan Feigenbaum said this would severely impact the US's role in Asia.
"Over the medium term, bye-bye US influence in Asia," he said on social media.
"[It] was already being reshaped faster than the US was adapting. Won't be the same on the other side of this s**t show.
"The three major pillars—demand driver and open market, standard setter, and security provider—all eroding."
The CEO of Development Intelligence Lab, Bridi Rice, said US tariffs would "disproportionately harm economies like Cambodia, Vietnam, and Bangladesh—key development partners to Australia."
"The tariffs will inhibit growth and threaten millions of jobs in sectors that have underpinned development trajectories of these nations," she told the ABC.
"It's time for Australia to recalibrate our strategic assumptions—the potential of less regional growth, more poverty, declining US influence, and the following entrenchment of authoritarianism creates a dangerous cocktail for regional instability."
"This is geo-economic fallout at its worst."
Other Top Stories
Top Stories
US markets plummet as Trump's tariffs deliver COVID-style shock
Photo shows A man with his mouth open looking at a computer.
Labor labels Dutton 'reckless' for seeking defence leverage to fight Trump tariffs
'Oh look at Cambodia!': How Trump's tariffs will hit Asia
Penguin-populated island hit with US tariffs shows 'rushed process', Farrell says
Two men smuggle guns into AFL match in Melbourne in major security breach
Comments