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How Will Trump's New Tariffs Affect Australia’s Economy?

admin928749
Apr 4
3 min read

Donald Trump has slapped a 10% tariff on all Australian imports into the US under his so-called “Liberation Day” trade policy. And unlike his earlier steel and aluminium tariffs, this time it’s across everything—meaning a much bigger splash on the economic front.

Let’s break it down, Aussie-style: what does this actually mean for us, and should we be panicking? (Spoiler: not really, but keep an eye on it.)

Will This Make Things More Expensive in Australia?

Not directly.The key thing to know is that tariffs are paid by the importer, not the exporter. So, American companies bringing in Aussie goods are the ones footing the bill—not Australian producers or shoppers.

In short:

🇺🇸 = pays the tariffs

🇦🇺 = maybe annoyed, but not coughing up cash

That means American consumers, not Australians, will likely feel the price pinch—especially at the checkout line for beef.

Meat & Livestock Australia confirmed this, saying Aussie shoppers shouldn’t expect prices to change."US tariffs will impact the prices paid by American families," said MLA boss Michael Crowley. "It’s unlikely these changes will make a difference to retail prices here in Australia."

How Bad Is This for the Australian Economy?

It depends on where you’re looking.

Here’s the good news:

Only about 4% of Australian exports go to the US, so the direct hit is relatively small.
Gold and pharmaceuticals, two of our biggest exports to America, have been spared from the tariffs.

But here’s the tricky bit:The beef industry could take a major hit. The US is our biggest beef market, and Aussie beef is a big deal over there—worth over $4 billion last year alone.

Now with the added cost, US buyers may cut back, and Aussie beef producers might have to look elsewhere to keep business strong.

What About the Bigger Picture—Could This Trigger a Global Mess?

Now we’re getting into murkier waters.

The Australian stock market dropped after Trump’s announcement, with a $33 billion dip on Thursday alone (which, believe it or not, was better than the $50 billion hit earlier in the day).

Then there’s the risk of other countries reacting—especially China, which got hit with even steeper tariffs. If they start retaliating or re-routing exports, Australia could see a flood of cheap goods, which might undercut our local producers.

The government’s already promising to boost anti-dumping measures, and there’s funding in the federal budget to encourage us to "Buy Australian."

But the biggest risk?

Global demand could slow down, particularly if China’s economy stalls or a trade war kicks off. That would hit Australia’s export-heavy economy hard—especially on resources and commodities.

"What happens to growth in China will be critical," said Professor Robert Brooks from Monash. "Any slowdown there... could have ripple effects for the Australian economy."

Some analysts are even warning this could push the global economy into recession within months if things spiral.

Any Silver Linings? (Yes, There Are!)

It’s not all doom and gloom.

Interest rate relief could be on the way.Traders are now almost certain the Reserve Bank will cut rates in May, and possibly three more times before the end of 2025. That’s great news for mortgage holders.
Trade with the EU might finally get sorted.With the US looking shaky, both the European Union and Australia might see this as the perfect time to finally ink a free trade deal that’s been stuck in limbo for ages.