US policy changes won’t have a large direct effect on the Australian economy but a global trade war can only be a drag on growthGet our breaking news email, free app or daily news podcastUS tariff policy has dominated headlines in recent weeks. In many respects, this shouldn’t come as a surprise – President Trump has been clear in his belief in tariffs as an effective policy tool. Indeed, the new US administration views tariffs as not only a means of raising tax revenue but also as a negotiating tool and a lever to ameliorate so-called trade imbalances. So far, we have seen both the threat of tariffs and the use of tariffs to achieve all these objectives.Despite all the headlines, Australia hasn’t really been subject to large changes in tariffs on its exports to the US. The US has, however, announced a 25% tariff on all steel and aluminium imports. If Australia is not successful in obtaining an exemption, Australian steel and aluminium exports to the US will be subject to new tariff...
According to Sally Auld in The Guardian, trade tariffs are becoming the norm, and this is unlikely to benefit Australia. While direct effects of US tariff policy on Australia may be minimal due to a trade deficit with the US, a global trade war could hinder Australian economic growth. The US has imposed tariffs on steel and aluminum imports, potentially impacting Australian exports if an exemption isn't secured, though the overall effect on Australia's trade balance is expected to be small.
