Donald Trump’s plan to impose heavy export tariffs on April 2 looms over 20 or so countries. Trump’s tariffs will hit Australian exporters immediately, but the details of the so-called Liberation Day remain relatively unknown. However, the US president said he would be “very kind” to trading partners.
According to The Washington Post, the White House has drafted a proposal which would put a roughly 20 per cent tariff on imports to the US.
Steven Hamilton, assistant professor of economics at George Washington University, said that the impact of Liberation Day on Australians could actually be quite minimal. In comparison to the impact of the tariffs Trump imposed on Australia earlier this year, the impact might be about ten times greater, but still relatively small.
The United States President wants to target 15 countries that export more to the US than they buy. Australia is not among those 15, but the country does export 4 billion dollars of beef to the US every year. McDonald’s in particular, uses a lot of imported beef from Australia.
Global Retaliation Could Spell Trouble for Aussies
Hamilton did warn, however, that if some of those targeted countries decide to retaliate following Trump’s Liberation Day, there could be a “chilling” of global trade. Such a scenario would spell trouble for Australia, a small country which relies heavily on imported goods.
Last year, Australia imported $37.5 billion in goods and services from the US. However, the country imported $212.7 billion worth of goods from China. Hamilton suggests that Australia would be much more greatly affected by a shrinking of the Chinese economy.
The Impact of Liberation Day on Consumers
The cost to businesses from tariffs are usually passed onto the consumer. Economists like Hamilton expect that the tariffs will actually drive up the price of imported and local goods for US consumers as well.
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