Trump’s Liberation Day Tariffs: what they mean for the world, Liberation Day: Exporters face tough new tariffs, The Penguins Aren’t Immune – Heard and McDonald Islands are also facing tariffs

If you’re not tuned into the news, you might wonder what these headlines mean and what the implications are for Aussie consumers. Beneath the spin, and the stories about penguins, there’s a story here – of a president looking to use tariffs to transform his nation’s relationship with trade.

What is a Tariff?

A tariff may seem like a complicated term, but in reality, it’s another tax applied to a product before it reaches a consumer. A tariff is a tax that applies to imported products, which is paid by the company that imports the product.

Consider this: a country places a 25% tariff on companies that import a particular product. When importers bring in the product, they’re forced to pay this tariff fee to the government, which can become quite expensive, especially if the tariff is new. This often has implications for those in countries that have imported tariffed items. With importers unable to absorb the cost, they simply pass those costs onto consumers, often pushing up the costs of products.

Tariffs don’t have to be uniform – in fact, governments may choose to be specific about the products they charge tariffs on. Historically, tariffs have been used as a tool to protect domestic production from foreign interests, in an attempt to help manufacturers compete against overseas rivals.

Take, for example, manufacturing industries such as automotive. For a long time, Australia enforced import tariffs on vehicles manufactured overseas to protect the domestic vehicle manufacturing industry, and this was once as high as 60%. Ultimately, these tariffs didn’t work, with Australia’s last car-making facility, operated by Holden, closing down in 2017.

Implications for Aussies

With all the announcements about tariffs and taxes, it can be difficult to understand if these will affect consumers outside the United States. Fortunately, the tariffs announced by U.S. President Donald Trump are unlikely to have a direct impact on the prices Aussies pay at the checkout.

However, these tariffs will substantially impact products exported from Australia to the United States. In 2021, approximately $12.5 billion USD worth of products were exported from Australia to the United States – any substantial tariff could increase the cost of Australian products such as beef to American consumers.

It’s worth noting that the United States is just one of Australia’s trading partners – in fact, relative to the political and military relationships that both nations have had over the past eighty years, their actual trade volumes are quite small.

While tariffs undoubtedly present a challenge for companies that have a trading relationship with the United States, companies have options.

Firstly, may choose to export to other international markets, rather than paying higher tariffs on products in the U.S. This might be beneficial for products that are in high demand globally, although this would come at a direct consequence to the American consumer.

The second, and potentially far more dangerous, outcome is when businesses are forced to stop exporting products and potentially close down facilities as a result of trade tariffs. This can have a devastating impact not only on employers but also on workers in the supply chain – port and warehouse workers, delivery drivers, etc.

Key Industries Facing Tariffs

Australian exports to the United States are quite diverse, and the introduction of tariffs will undoubtedly have complex impacts. Two key industries look to be under the greatest amount of pressure as a result of these tariffs, and these are worth exploring.

The beef industry looks set to face pressure under the tariffs introduced by the Trump Administration. Beef is Australia’s largest export to the US, with approximately one-third of beef exported from Australia finding its way to US consumers.

Beef is big business, and it’s responding to these changes. Industry body Meat & Livestock Australia is just one part of the beef economy that is actively involved in an industry taskforce and liaising with the Australian Government to advocate for change. Fortunately, with Australian beef being exported to more than a hundred global markets, there are a number of opportunities for growth for beef suppliers that offer lower tariffs and less uncertainty.

Australia’s steel and aluminium industries are the second key industry facing pressure from tariffs. Steel and aluminium are key for construction, and each year, more than one billion dollars worth of product is exported to the United States.

Introduced in March 2025, the Trump Administration has enforced a twenty-five percent tariff on all steel and aluminium products imported from Australia, as an attempt to protect the US steelmaking industry from international rivals. While these tariffs have come under fire, including from the Prime Minister of Australia, Anthony Albanese, it’s unclear if these tariffs will have any meaningful impact in the long term.

An Uncertain Time For Trade

The introduction of widespread tariffs across trading partners of the United States has, without a doubt, had an impact. From declines in freight traffic to retaliation by other nations, it’s clear that we are entering an uncertain time for trade.

Tariffs have long been called a protectionist policy—an attempt by lawmakers to protect domestic interests, often at the cost of international trade. In a world that is so tightly integrated, is it even possible for tariffs to cause the outcomes that the Trump Administration hopes for?

The introduction of tariffs will undoubtedly influence some exports for trading partners like Australia. But with a multitude of other potential trading partners around the globe, perhaps it’s time for Australian businesses to explore the potential of other international markets and address uncertainty by embracing global opportunities.

One thing is certain in times of uncertainty – Aussie businesses are resilient. While tariffs present a hurdle, they are not insurmountable – we’ll get through this.