Australian exporters are awaiting news regarding potential increases in tariffs from the United States as the deadline set by Donald Trump approaches. By midnight on August 1, US Eastern Time, nations that have yet to secure trade agreements with the US may be informed about the imposition of new “reciprocal tariffs.” Although Australia has not faced direct increases in these tariffs, it did incur a baseline tariff of 10 per cent starting April 5.
Concerns linger among exporters that this initial 10 per cent could rise to as much as 15 or even 20 per cent. Although there is a free trade agreement in place between Australia and the US, no new deal has been established. The Australian government is keeping a close watch on the situation; however, there has been no direct communication between Prime Minister Anthony Albanese and Trump regarding these tariffs.
The Trump administration has reported that nearly 200 countries are seeking trade agreements. White House press secretary Karoline Leavitt indicated that Trump would sign an order to implement new rates shortly after the deadline, effective from 12:01 am the following day. Countries without prior communication from Trump or an established framework would receive notification about their likely tariff rates soon.
In a related development, Trump recently announced a 90-day negotiation period with Mexico while maintaining current tariff rates on imports from that country. This plan, he asserted, would keep the existing 25 per cent tariffs in place, a reduction from a previously threatened 30 per cent.
The uncertainty surrounding this tariff scenario has created a dramatic backdrop, reflecting the tumultuous nature of Trump’s tariff policies. These tariffs, intended to protect American interests, are widely expected by economists to have repercussions on US consumers and businesses, ultimately impacting pricing and availability.
This new round of tariffs follows Trump’s earlier “Liberation Day” measures implemented in April, which caused significant volatility in the stock market and heightened recession fears. After failing to achieve numerous trade agreements within the set timeframe, Trump extended negotiations and sent letters to world leaders outlining prospective tariff rates, leading to frantic deal-making.
Recently, agreements have been reached with various nations, including South Korea, the European Union, Japan, Indonesia, and the Philippines, as part of Trump’s ongoing efforts to reshape international trade dynamics.