Monash experts: Trump’s tariffs, the global trade fallout and impact on Australia’s economy

Monash University Media Release

As of Saturday the United States will be imposing tariffs of at least 10 per cent on almost all foreign imports. What will be the impacts on global trade and the Australian economy?

Dr Nicola Charwat, Senior Lecturer, Business Law and Taxation, Monash Business School says:

“The ‘liberation day’ tariffs represent the culmination of the abandonment of multilateralism and the turn to mercantile, power-based trade relations. I find these tariffs are particularly significant because they target essentially all trading partners simultaneously, regardless of alliance status or existing agreements. In contrast to the usual and occasional bilateral trade disputes, this approach suggests a systemic rejection of the post-war trading order.

“The framing is also problematic – they are reciprocal in the face of perceived ‘unfairness’ to the US rather than specific economic harms. It appears that Trump or the United States can redefine any trade policy difference as unfairness and reach for tariffs. This gives rise to a high level of uncertainty.

“Australia finds itself in a particularly difficult position despite seemingly favorable circumstances: the US maintains a trade surplus with Australia (something Trump typically values), Australia imposes no direct tariffs on US goods, and has been a steadfast security ally. Yet even these advantages may not secure an exemption.

“The tariff threat exposes the limits of traditional diplomacy in Trump’s transactional worldview. Despite Australian negotiators making logical arguments about the trade relationship, the US administration appears unmoved without concessions of ‘great value’.”

Read more of Dr Charwat’s commentary on Trump’s tariffs here: Monash Lens  

• International trade law
• Global trade fluctuations
• History of international trade

Professor Robert Brooks, Professor of Econometrics and Business Statistics, Monash Business School says:

“The direct impact of Trump’s tariffs on Australia’s economy will probably be minimal. However, the indirect effects could be more significant – particularly if Australia chooses to engage in a tit-for-tat trade war, which would ultimately dampen global economic growth.

“What happens to growth in China will be critical. Any slowdown there, particularly as a result of escalating trade tensions, could have ripple effects for the Australian economy.

“Even though we’ve been called ‘wonderful people,’ Australia’s beef exports are facing tariffs as a result of a biosecurity measure. Regardless, our beef industry will need to look for alternative markets to stay viable.

“I do see the government is preparing to offer financial support, but this is really about more than subsidies. The key will be opening up new market access and negotiating better trade routes for our agribusinesses.”

Read more of Professor Brooks’ commentary here: Monash Lens  

• Economic impact of tariffs
• Impact on agribusiness

See also: U.S.A tariffs to hit Victorian businesses

 

Dear reader, we need your support

Independent sites such as The AIMN provide a platform for public interest journalists. From its humble beginning in January 2013, The AIMN has grown into one of the most trusted and popular independent media organisations.

One of the reasons we have succeeded has been due to the support we receive from our readers through their financial contributions.

With increasing costs to maintain The AIMN, we need this continued support.

Your donation – large or small – to help with the running costs of this site will be greatly appreciated.

You can donate through PayPal or credit card via the button below, or donate via bank transfer: BSB: 062500; A/c no: 10495969