That’s set to change dramatically in less than two weeks, in what might be the biggest trade news of this decade thus far. Meanwhile, the US prepares to concordantly slap new tariffs on foreign imports. The announcement comes on the heels of continued discussions on Japan’s non-tariff trade barriers. These barriers are especially hurtful to other agricultural products, such as beef. The tariffs, which will take effect on April 5, 2024, follow President Donald Trump’s declaration of a “liberation day” for trade, aiming to recalibrate international trade dynamics and address long-standing grievances.
Over the last few years, the US has raced ahead Australia’s second-largest source of imports. During the 2023-2024, this connection supported an astounding $88.2 billion in value added to the Australian economy. Aside from this notable progress, Australia still maintains its ban on US beef imports. They have substantive safety concerns that meat would come from Canada and Mexico. Though the US may claim that its beef herd is free of the disease, Australia is not taking any chances. The ban, in place since 2003 due to fears of ‘mad cow disease,’ highlights the complexities of trade negotiations between the two nations.
Implications of New Tariffs
Under the new measures, the US will place tariffs of at least 10 percent on foreign imports. White House officials said that this would occur in the context of reciprocal tariffs on Australian goods. These tariffs will be at least half of the existing trade barriers on US goods. This would push Australian exports to the US up to $14.73 billion (AUD$23.47 billion) in 2024. The effect, though, is that they will end up paying more.
The reciprocal tariffs will hit the most Australia’s rapidly expanding meat export market. Just in 2024, Australia exported $4 billion— almost 400,000 tonnes —of meat into the United States. Australias most important red meat export market hit by new tariffs. These tariffs now threaten to put a huge economic target on our farmers and exporters.
“We will charge them approximately half of what they are and have been charging us,” – Donald Trump
President Trump was clear from the beginning that these tariffs were to be a tool to promote fair trade practices. That’s why his administration thinks that countries such as Australia should be slapped with tariffs. Their trading posture grounds chiefly on their “non-tariff trade barriers,” including bio-security barriers that are decimating American food product entry. The ramifications of these tariffs will be extensive, impacting meat exports and much more all around this country.
Australia’s Dependence on US Imports
Beyond beef, Australia is dangerously dependent on imports for its medical supplies. In 2023, the United States made up roughly 21 percent of India’s imported medicines, which constitute about 90 percent of the country’s total drug production. These tariffs are expected to trigger a massive increase in expenses. This increase is concerning, particularly from the perspective of making sure Australians have access to affordable essential healthcare products.
The aviation sector is another area that likely would face major fallout. Our US market today imports over $2 billion of aircraft, spacecraft and related parts. This impressive number serves to underscore the country’s monumental commitment to aviation and space exploration. Higher tariffs will lead to increased costs for Australian firms. These businesses rely on deep American technology and American parts to succeed.
“They won’t take any of our beef. They don’t want it because they don’t want it to affect their farmers.” – Donald Trump
As both countries continue to implement these unprecedented tariffs, the brewing unpredictability of the global economic landscape could heighten already steep economic headwinds.
Responses from Leaders
Australian Prime Minister Anthony Albanese has been vocal about their effect on Australian households. He stated that “Today’s uncertainty in the global economy will push up costs for American households,” suggesting that both nations could face economic repercussions as a result of these new trade policies.
The increasingly complex state of US-Australia trade relations highlights the difficult line administrations have to walk between protecting domestic interests and building international partnerships. As of now, both countries are still preparing to move forward with these tariffs on April 9. At the same time, stakeholders across all sectors are raising alarms about the disastrous consequences that could result.
