United States President Donald Trump’s decision to suspend higher tariffs for 90 days and lower reciprocal tariffs to 10 per cent has been welcomed, but it is unlikely to have a major impact on Australia. Source: News.com.au.
Mr Trump’s announcement appeared to single out the higher tariffs for a 90-day suspension.
In the meantime, “a substantially lowered Reciprocal Tariff during this period of 10 per cent” was “effective immediately”. That will apply to all nations, aside China. Mr Trump has upped China’s tariffs to 125 per cent.
Australia’s tariff was at 10 per cent already – the lowest amount and it appears that the 10 per cent tariff will remain in place pending negotiations.
So Australia is not better off now than it was when the tariffs came in overnight. Indeed, Australia’s relative advantage, that it had a lower tariff rate, has now gone.
Economists have warned the real threat with tariffs to Australia was not the tariffs on Aussie products themselves, but the combined effect of a trade war sparking a global recession.
Amid the global sighs of relief, though, there’s one thing worth noting – if the US keeps in place global 10 per cent tariffs, that’s still a high import tax.
On a social media post overnight Mr Trump said the fact 75 countries had contacted the US seeking to negotiate tariffs was the reason behind his volte-face.
FULL STORY
What Donald Trump’s tariff backflip means for Australia (News.com.au)
RELATED COVERAGE
Donald Trump pauses most ‘reciprocal’ tariffs but hikes China rate to 125pc (ABC News)
