Chances are, most of us remember the bru-ha-ha that occurred back on 2 April. That was when US President Donald Trump's long-touted tariff 'Liberation Day' rolled around, and we finally got to see what his administration had planned for America's new trade policy.
Most experts were expecting a small but wide-ranging tariff on all imports entering the United States. Perhaps it would be 10%, or maybe 20% on the more severe end.
What Trump unveiled shocked the markets and led to a near-financial meltdown.
Liberation Day and TACOs
All countries, including Australia, did get a 10% across-the-board baseline tariff placed on their exports. But most weren't lucky enough to avoid additional, 'reciprocal' tariffs.
Trump's reciprocal tariffs, levied on countries with a trade surplus with the United States, included a 20% tax on imports from Europe, 24% for Japan, 25% for South Korea, 26% for India, and 32% for Taiwan.
China was initially slapped with a 34% tax rate. But when the Chinese government retaliated, the tariffs were steadily and comically ratcheted up to more than 100% before both sides came to an agreement to get them back down to 30%.
Over the next week, financial markets, both for stocks and for bonds, went into meltdown.
After all, these tariffs would send the overall US tariff rate to levels not seen since the 1930s. And we all know what happened back then.
It only took a week or so for Trump to TACO and back down. Tariffs were put in the freezer for 90 days, and investors were back to the races.
Well, that sleepy peace is almost up. Next Wednesday marks 90 days since Trump's tariff pause. Trump has since come out and once again extended that deadline to 1 August. However, aside from tentative deals with a handful of countries, it still seems Trump is ready to once again play with the tariff fire.
So what's the likely outcome for Australia?
Tariff deal? Australia to be taxed on 1 August
It seems as though Australia is destined to get slapped with that 10% baseline tariff. Prime Minister Anthony Albanese has yet to formally meet with Trump despite several attempts. However, attempted negotiations that involved potential access for the US to our stockpile of critical minerals didn't seem to get us anywhere.
No countries, including those such as the United Kingdom, who have already inked individual deals, have managed to get an exemption from the baseline tariffs. It's hard to see that Trump would treat Australia any differently.
The best we can arguably hope for is an exemption to the additional 25% tariff Trump has placed on steel and aluminium imports into the United States. Perhaps in exchange for some privileged access to those critical minerals. But Trump has expressed reluctance about exempting any countries from those either.
So it seems that Australia will end up paying that 10% baseline tariff from next month. Unless Trump chickens out again, of course.
