All Australian products imported to the U.S. will be hit with at least a 10% tariff from later this week.
It’s part of President Donald Trump’s “Liberation Day” tariffs, which includes a blanket 10% levy imposed on all trade entering the U.S.
Once in effect, the tariff will mark the end of the Australia-U.S. Free Trade Agreement, in place for 20 years.
Pharmaceuticals, beef, and minerals are expected to be some of the hardest hit industries.
Here’s what you need to know.
Tariffs
A tariff is a tax on imports. It’s applied to foreign-made goods brought into another country and paid by the importer.
Since coming to power in January, Trump has imposed a range of tariffs on imports to the U.S, including a 25% tariff on Australian steel and aluminium.
The goal of tariffs is to encourage a country’s companies and citizens to buy locally-produced goods, boosting industrial activity. Trump has also claimed trading partners have “ripped off” America.
'Liberation Day'
In an address at the White House on Wednesday (local time), Trump announced a minimum 10% tariff on all countries’ exports to the U.S.
The new round of tariffs won’t impact the previously-announced taxes on aluminium and steel imports.
Displaying a chart of tariffs imposed against the U.S. by other countries, Trump claimed he was charging “approximately half” of that amount in return. For example, the chart showed the U.S. will impose a 34% tariff on China, who Trump claims charges a 67% tariff on American products.
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Australia
Trump directly referred to Australia’s ban on American raw beef exports (in effect since 2003) during his address.
“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,” Trump said.
It wasn’t immediately clear whether Trump would impose a reciprocal ban on Australian beef imports to the U.S. The Government has since confirmed Australian beef will be subject to a 10% tariff, but not an outright ban.
Top Australian exports
Reaction
Australia and the U.S. have had a free trade agreement since 2005, which removed tariffs from nearly all Australian exports, except for some agricultural products.
Prime Minister Anthony Albanese has criticised the new round of tariffs, saying: “This is not the act of a friend“.
“A reciprocal tariff would be zero, not 10%”.
Opposition Leader Peter Dutton said: “This is not the treatment that Australians deserve”.
