Anthony Albanese has unveiled a five-point plan in response to the Trump administration’s “reciprocal” tariffs, which includes prioritising Australian businesses in government procurement processes and contracts.
On 2 April, President Trump revealed his “Liberation Day” trade policy, with Australia and New Zealand set to see a 10 percent tariff on all goods imported into the US – which came into effect last Saturday (5 April).
China was hit the hardest with additional tariffs of 34 percent, bringing total duties on Chinese imports to over 54 percent.
Cambodia and Malaysia (49 percent), Vietnam (46 percent), Sri Lanka (44 percent), Bangladesh (37 percent), Thailand (36 percent), Taiwan and Indonesia (32 percent), India (26 percent), South Korea (25 percent) and Japan (24 percent) also face significant tariffs.
Trump specifically singled out Australian beef producers during his speech, which has since caused the Australian dollar to drop to its lowest point since April 2020.
“Australia bans – and they’re wonderful people and wonderful everything – but they ban American beef,” said Trump.
“Yet we imported $3 billion of Australian beef from them just last year alone. They won’t take any of our beef. They don’t want it because they don’t want it to affect their farmers. And you know, I don’t blame them, but we’re doing the same thing right now.”
The 10 percent tariff on Australian imports follows Trump’s previous announcements of a 25 percent tariff on certain aluminium and steel products (from 12 March), and a 25 percent tariff on automotive vehicle imports (from 3 April) and certain automotive parts (by 3 May).
Rounding out Albanese’s five-point plan, anti-dumping measures will be strengthened with a $5 million boost, while $50 million will be allocated to peak bodies with the aim of assisting affected sectors to find new markets.
A $1 billion economic resilience program will be established through the National Reconstruction Fund, while Albanese also hinted at a plan for a “critical mineral strategic reserve.”
Touching on government procurement, Albanese expressed his support for Australian suppliers, elaborating on his Buy Australian campaign.
“Australian businesses will be front of the queue for government procurement and contracts, maximising values for local businesses and the taxpayer.”
Albanese also labelled the tariffs as “totally unwarranted” and “not the act of a friend”, but said Australia will not impose reciprocal tariffs.
“President Trump referred to reciprocal tariffs. A reciprocal tariff would be zero, not 10 percent,” he said.
“The administration’s tariffs have no basis in logic and they go against the basis of our two nation’s partnership.
“We will stand up for Australia. We will continue to make the strongest case for these unjustified tariffs to be removed from our exporters.”
Back in February, Katrina Ell, Director, Head of Asia-Pacific Economics at Moody’s Analytics, hosted a PASA Connect roundtable, revealing what Trump’s tariffs could mean for the ANZ region.
“We are likely to be impacted by supply chains getting even longer. When tariffs are imposed, rerouting happens. For example, during Trump’s first presidency, China was hit by many tariffs which resulted in Vietnam benefiting from rerouting as organisations attempted to avoid risk by increasing investment elsewhere to ensure diversification,” she said.
“Australia also buys a lot from China (one third of all of our imports) so we will feel indirect effects of any resultant squeeze from US/China trade level changes.
“What we’re seeing is Southeast Asia is picking up more of what China has been doing from end to end. Southeast Asia is a critical player as a counterweight to China’s influence in global manufacturing. In other words, alternative sourcing destinations to China may be key in the future.”
Experts have since weighed in on the Trump administration’s tariffs, with Innes Willox, Chief Executive of the Australian Industry Group, calling the announcement “disappointing but not unexpected.”
“It is particularly bad news for our nation, because we rely on trade for our economic prosperity more than any other economy on earth, with one in four jobs dependent on trade,” he said.
“Global supply chains in these high-value, high-productivity industries cannot be quickly rejigged in the same way that commodities can. Our advanced manufacturers will face profound disruption as global supply chains adjust around the new US tariff wall.
“At least 50 percent of goods moving around the world are intermediate goods – not finished products, but their components. This means the impacts will be far reaching and go much further than just the products subject to the tariffs.
“Goods destined for the US may likely need to find a new home, raising the prospect of an influx of displaced goods coming to Australia. More than ever, we need a transparent and robust anti-dumping system to work in the legitimate interests of Australian Industry.”
However, Ben Udy, Lead Economist at Oxford Economics Australia, told the Accounting Times that the US tariffs could inadvertently advantage Australian exports.
“Any increase in tariffs is disappointing…but what’s important is that Australia’s tariff increase is smaller than many other countries, and what that means is Australia’s exports are set to get more competitive than many other economies,” he said.
“If Australia and Europe are both exporting beef to the US, Australia’s beef is now going to look cheaper than European beef, and so it may actually provide some boost to Australia’s exports in that sense.”
