The upcoming expiration of a 90-day pause on ‘reciprocal tariffs’ on August 1 will see many trading partners of the United States, Australia included, facing a 10% levy. However, President Trump has signalled his intention to increase these baseline tariffs, potentially doubling them soon after.
At a press conference in Scotland, Trump suggested that the new tariffs could range between 15% and 20%. While he expressed a desire to be accommodating in negotiations, he affirmed that those nations yet to establish trade deals with the U.S. would be most affected. In the interim, the United States has successfully sealed agreements with several key partners, including the United Kingdom, China, and the European Union.
Trump has emphasised that new tariffs will apply broadly to nations failing to secure agreements, stating a commitment to implementing tariffs on “essentially, the rest of the world”. He dismissed the feasibility of negotiating numerous individual deals, insisting a consolidated approach is necessary.
Despite a pre-existing free trade agreement with the U.S., Australia has not negotiated any specific deal regarding these tariffs. The Australian government has openly criticised the U.S. for the imposed tariffs, viewing them as unwarranted and detrimental to economic relations. A spokesperson for Trade Minister Don Farrell reiterated Australia’s stance, labelling all tariffs on Australian goods as unjustified, and committing to advocate for their removal in line with the free trade agreement. As negotiations loom, Australia intends to engage thoroughly with U.S. officials to resolve these issues.