Today’s decision by the US Trump Administration to impose a 10% tariff on Australian goods is deeply disappointing and is a breach of the Australia-US Free Trade Agreement.
Prime Minister Anthony Albanese has expressed disappointment in the decision describing it as “not the act of a friend”. The Australian Government has chosen not to impose retaliatory tariffs given the negative effect they would have on our domestic economy.
As ACCI CEO Andrew McKellar said today, “The Administration’s decision will reduce trade and increase costs for businesses and consumers. This is an act of self-harm which has the potential to create a trade war and inflict significant damage to the global economy.”
The effects of these tariffs will be felt not just in Australia but across the globe, influencing both direct trade relationships and broader market confidence. Australia’s key trading partners are also affected – including our top 3 being hit with very high tariffs: China (34%), Vietnam (46%) and Japan (24%). Flow-on effects could also impact supply chains and shipping routes, leading to increased business costs and potential pressure on consumer prices in Australia.
South Australia has a strong history of exporting premium goods to the United States, including wine, advanced manufacturing, and agricultural products. The US currently accounts for approximately 5% of Australia’s exports and while businesses explore broader market opportunities, longstanding trade partnerships take years to develop, and these changes create uncertainty.
Both state and federal governments have a crucial role to play in supporting businesses through this period of uncertainty. Creating a policy environment that fosters resilience and new opportunities will be key.
Although currently in caretaker mode ahead of the election, the Albanese Government announced a range of measures to support affected industries should they return to government. This includes a $50 million investment to assist impacted sectors in securing and expanding into new markets, supported through peak industry bodies. Additionally, five new business and investment missions launched within the first 100 days of their second term, targeting priority export markets. A new Economic Resilience Program to be established through the National Reconstruction Fund, providing $1 billion in zero-interest loans to help businesses capitalise on emerging export opportunities. A reinforced commitment to prioritising Australian businesses in procurement and contracts, ensuring local firms remain competitive. And lastly, establishment of a Critical Minerals Strategic Reserve to strengthen Australia’s position in global supply chains.
The US tariff situation highlights the need for strong, forward-thinking policies from both major parties leading into the upcoming election, ensuring that Australian businesses are supported through these uncertain times. The South Australian Business Chamber will continue working closely with ACCI, government, and our business community to advocate for fair trade policies and support to affected industries.
