Thu 3 Apr
This blog is now closed.
We are waiting to hear from the prime minister who will be responding to this announcement very soon.
No doubt Peter Dutton will also have a bit to say.
But the issue is – right now, it is not entirely clear what applies to Australia. So we imagine there are some very urgent phone calls happening right now in the diplomatic corps.
So after all that hyperbole, the main take aways you need to know are:
Trump is applying a 10% minimum baseline tariff to all imported goods to America
This is what will apply to Australia (there could be more – this is all that was mentioned)
Australian beef was singled out when Trump was going through his list of grievances, but he attempted to soften the blow by claiming Australians were “wonderful people”
A 25% tariff will apply to all automotive imports from tomorrow
Trump and his administration have then made up numbers to apply to individual countries he has particular issue is.
He has claimed this number has been by adding up the ‘tariffs and non-monetary trade barriers’ and then halving it.
This doesn’t seem to be based in reality, as Trump is including things like good and services taxes which apply to all goods in certain countries as well as biosecurity measures as ‘barriers to trade’
China is at the top of that list with a 34% tariff. Taiwan has a 25% tariff on all goods and the EU a 20% tariff
AAP has some fast response to the tariff announced on Australian beef:
Australian Meat Industry Council chief executive Tim Ryan said Australian beef producers play a critical role in feeding American consumers as there is a shortfall of meat which won’t change overnight.
“The global demand for high-quality Australian red meat continues to grow, and our supply chain is well-positioned to respond to shifts in the international trade landscape,” he said.
The shortfall Ryan is talking about is because the US has been in drought, which means there own beef production has been down.
Again, here is a quick history lesson on what the Hawley-Smoot tariffs did to the US in 1930. It WORSENED the Great Depression
Trump:
We’re going to be an entirely different country and it will be fantastic for the workers, fantastic for everyone. They will never have been a transformation of a country like the transformation that’s already happening in the United States of America.
Well he is half right – America will be a very different country, but it won’t be fantastic for workers, or for everyone outside of the very wealthy.
None of these numbers Trump is talking about are real. They are not reciprocal tariffs because he is coming up with any reason he wants to put a tariff on – “non-tariff barriers” for example in his head is a GST or our biosecurity measures that stop diseases coming into Australia that apply to every country we trade with not just the USA.
He’s decided to just come up with a number that he thinks represents that and then halved that nonsensical number to make it look like he is being good – and probably because maybe someone close to him told him maybe it is best to just partially destroy the US economy not completely destroy it”
Trump continues:
At the same time we’ll establish a minimum baseline tariff of 10%. That will be on other countries to help rebuild our economy and to prevent cheating.
So, we’re going to have a minimum of cheating and we’ll be very severe on the people that at the gate that watch the tariffs and watch the product coming in.
Because there’s been a lot of – a lot of bad things happening at the gate because the money is so enormous, you’re talking about. There’s never been anything like it, in terms of the enormity and there’s a lot of bad things happen, the people that do the checking.
They are looking at 10-year jail sentences – we’re going to treat them so good, but if they cheat, the repercussions are going to be extremely strong.
Foreign nations will finally be asked to pay for the privilege of access to our market, the biggest market in the world, we’re right now the biggest market in the world.
The US is the biggest consumer market. But foreign nations will not be paying these tariffs
Trump is also treating this as if it were a business deal – which is how he treats everything.
I mean, if anything, we are finally seeing what happens when you run a country like a business (spoiler: it is not going to be good)
We’re going to have to go through a little tough love, maybe but they all understand. They’re ripping us off and they understood it.
He has announced that the US has added up every tariff and non-monetary trade barrier to US imports in each country, and then halved it. So if Japan is considered to have put a 46% tariff on US imports (which would be paid by the Japanese importer and then consumer) then the US will put on a 23% tariff on all Japanese goods (this is an example, not actual figures)
Trump has just gone through the history of tariffs in America and is implying (without directly saying it) that it was other countries which paid these taxes, which made America rich.
That is not how a trade tariff works – a tariff is an import tax on a good. So the importer pays it, and then factors it in to their cost to the consumer.
Trump:
Starting tomorrow, the United States will implement reciprocal tariffs on other nations. It’s been a long time since we even thought of that. We used to think about it a lot, we didn’t think about it for many decades and you see what’s happened.
For nations that treat us badly, we will calculate the combined rate of all their tariffs, non-monetary barriers and other forms of cheating, and because we are being very kind, we’re kind people, very kind, you’re not so kind when you got ripped off salaries my auto worker friends and teamsters friends and all of the unions that were voting Democrat, they’re not voting Democrat anyone, because worker, whether union or not worker, they’re for the Republicans now.
That’s what happened. But we will charge them approximately half of what they are and have been charging us.
So the tariffs will be not a full reciprocal, I could have done that, I guess, but it would have been tough for a lot of countries. We didn’t want to do.
Again, Trump is implying that other countries will pay these tariffs, which is not true. Americans will pay them
Trump moves on to agriculture, where he says American farmers and ranchers have been “brutualised”. This is where Australia gets its first mention:
…with countries like Canada, you know, we subsidise a lot of countries and keep them going and keep them in business. In the case of Mexico, it’s $300 billion a year, in the case of Canada it’s close to $200 billion a year. And they say why are we doing this, why are we doing this?
At what point do we say, “You got to work for yourselves and you got – this is why we have the big deficits, this is why we have that amount of debt that’s been placed on our heads over the last number of years. We’re really not taking it anymore.”
Through non-tariff barriers, the European Union bans imports of most American poultry. You understand, they say we want to send your our cars an everything, but we’re not going to take anything that you have.
Australia bans and they’re wonderful people, and wonderful everything, but they ban American beef. Yet we imported $3 billion of Australian beef from them just last year alone. They won’t take any of our beef. They don’t want it because they don’t want it to affect their farmers and you know, I don’t blame them but they’re doing the same thing right now starting at midnight tonight, I would say.