In a recent announcement, US President Donald Trump unveiled new tariffs, branding them as “reciprocal” measures against countries including Australia. He cited a chart indicating that Australia imposes a 10% tariff on American goods, despite the existence of a free trade agreement between the two nations. However, this claim is contested as Australia does not currently impose any tariffs on US imports due to the 2005 agreement.
Australian Prime Minister Anthony Albanese responded to Trump’s assertion, clarifying that a genuine reciprocal tariff would mean a 0% rate, not 10%. The Australian government has consistently advocated for free trade and had previously eliminated nearly 500 minor tariffs and opted not to retaliate against US tariffs on steel and aluminium earlier this year.
The term “reciprocal” in Trump’s context appears problematic. According to Monash Business School’s Dr Nicola Charwat, the tariffs are set against perceived unfairness rather than specific economic damages. The White House’s approach implies that trade policy discrepancies could be classified as unfairness, potentially leading to unpredictable tariff applications.
The 10% figure for Australia likely stems from a combination of factors, including accusations of currency manipulation and existing trade barriers. Among the key issues highlighted by Trump is Australia’s strict biosecurity measures, which restrict the import of American beef due to Mad Cow Disease concerns.
Despite these restrictions, Trump noted last year that Australia imported $3 billion worth of US beef. He expressed frustration over Australia’s ban, stating that while they export beef to the US, they do not accept American beef.
Additionally, the US Trade Representative’s recent report included other trade tensions with Australia, such as bans on uncooked pork and poultry and stringent regulations on pharmaceuticals. However, pharmaceutical products were exempted from the latest tariff changes.
The situation is not unique to Australia; other countries have similarly faced higher tariffs than those imposed on the US. New Zealand’s Trade Minister has refuted Trump’s claims regarding its tariffs, asserting a much lower rate, while Israel recently cancelled its tariffs on US goods. Switzerland, too, has argued against being classified with high tariff rates despite having very few customs duties on US imports.
In summary, while Trump portrays these tariffs as reciprocation for perceived imbalances, the responses highlight significant discrepancies in the claims about tariff structures and trade policy between the US and its allies.