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Australia has been hit with a 10 per cent minimum baseline tariff as part of US President Trump’s so-called “Liberation Day”, along with tariffs hit across the EU, Taiwan, China, Japan, Canada, India, South Korea, and Cambodia.
The 10 per cent tariff on Australia is set to come into effect from 5 April 2025.
Prime Minister Anthony Albanese said that the tariffs on Australia were “not the act of a friend” and completely “unwarranted”.
“The Australian people have every right to view this action by the Trump administration as undermining our free and fair-trading relationship,” Albanese said this morning (3 April) via the ABC.
“Our existing Free Trade Agreement with the United States contains dispute resolution mechanisms. We want to resolve this issue without resorting to using these.”
President Trump showed particular ire towards Australia’s beef industry, saying that Australia had “banned American beef”.
“We imported $3 billion of Australian beef from them just last year alone. They won’t take any of our beef,” Trump said.
“They don’t want it because they don’t want it to affect their farmers. And you know what? I don’t blame them, but we’re doing the same thing right now, starting at midnight tonight.”
Earlier this week, Albanese told reporters in Adelaide that the federal government would not undermine Australia’s biosecurity system and said that weakening biosecurity laws “is like cutting off your nose to spite your face”.
Trump further said that he would adapt to any retaliatory tariffs from the targeted countries.
“Should any trading partner retaliate against the United States in response to this action through import duties on US exports or other measures, I may further modify the HTSUS to increase or expand in scope the duties imposed under this order to ensure the efficacy of this action,” Trump said.
Dr Nicola Charwat, senior lecturer of business law and taxation at Monash Business School, said the tariffs represented an abandonment of the post-war global trading order.
“The ‘liberation day’ tariffs represent the culmination of the abandonment of multilateralism and the turn to mercantile, power-based trade relations,” she said.
“I find these tariffs are particularly significant because they target essentially all trading partners simultaneously, regardless of alliance status or existing agreements. In contrast to the usual and occasional bilateral trade disputes, this approach suggests a systemic rejection of the post-war trading order.”
CBA senior economist Belinda Allen said that international economics colleagues estimate that Australia will face “a modest impact from tariffs with 0.2 per cent of nominal GDP at risk over the medium term”.
“The impacts will be larger if the Chinese economy slows in response to the high tariffs imposed by the US on Chinese imports and there is a pronounced impact on global growth,” Allen said.
“However, we expect the Chinese authorities to deploy additional policy stimulus if they expect to fall short of the ‘around 5 per cent’ GDP growth target. Canada, Mexico and China will be the most impacted based on our model.”
Following the latest monetary policy meeting, RBA governor Michele Bullock told reporters during the post-meeting conference that Australia is “well positioned for any shocks that might come our way”.
“At the moment, we’re not seeing signs that we’re being impacted by [the tariffs]. What will be important, for us particularly, is what happens with our major trading partners and China,” Bullock said.
“We’ve been thinking about what the response of the Chinese authorities might be, and if they continue to add fiscal support, then it might be that the impact on Australian activity [is there]. It’ll be slow, but it might be relatively muted.”
[RELATED: Australian economy ‘well positioned’ for shocks, Bullock says]
