The US's trade surplus with Australia has so far helped keep Australian food and agri exports off the 'wheel of misfortune' when it comes to the new wave of US tariffs, Rabobank says in a newly-released global report. And this may hold Australia in good stead when it comes to any future US tariff announcements.
In the report – The impact of US tariffs on global food and agribusiness – the bank's RaboResearch division identifies Australia as one of the United States' trade partners likely to be at the lowest risk of future direct tariffs, due to the balance of trade between the two countries being in the US's favour.
The report – which explores the new series of trade policies and tariffs from the newly-re-elected President Trump and their potential global impacts on food and agriculture – identifies nine waves of economic and geopolitical measures that have been imposed, are underway or likely under the new US administration.
These range from the 'first wave' announced by the new administration against Colombia – a major supplier of US coffee and cut flower imports – to the most recently-announced 'ninth wave' of tariffs on steel and aluminium imports into the US, which may disrupt supply or increase costs for beverage and food packaging.
Their effects are already starting to be felt on "foreign shores", according to report co-author, RaboResearch general manager Australia & New Zealand Stefan Vogel, and their potential impacts on global food and agribusiness range from minor ripple effects to heavy disruptions.
"It has been a stormy start to the year with many waves and more to be expected later in 2025," Mr Vogel said.
'Wheel of misfortune'
The report says countries which have significant trade surpluses with the United States (ie. export more to the US than they import from there) – such as China, Mexico and Canada – are at higher risk of facing further tariffs. And this could lead to increased costs and disruptions in global trade.
"President Trump has stated many times that he is especially targeting countries with whom the US holds a heavy trade deficit," Mr Vogel said. "China and Mexico are top on that list, but Canada also makes the list of the top 10 countries with whom the US has a trade deficit. EU countries also make up a large share as do various Asian economies."
Wheel of misfortune – US top 10 trade deficits by country (billion USD), Jan-Nov 2024
Source: US Census Bureau, RaboResearch 2025
Australia
While Australia is in a more favourable position in terms of its overall balance of trade with the United States when it comes to potential tariff risks, the US is a significant market for some Australian agricultural exports, including beef, lamb and wine, the report says.
"Australia's beef sector has seen the US emerge as its largest buyer in recent months," Mr Vogel said. "US tariffs would hurt this trade flow, which accounted for approximately 30 per cent of all Australian beef exports in 2024 – the equivalent of 23 per cent of Australia's beef production – while 23 per cent of US beef imports were supplied by Australia. This made Australia, together with Canada the largest beef exporters to the US, well ahead of Mexico, Brazil and New Zealand."
Besides beef, Mr Vogel said, almost 25 per cent of Australian sheepmeat exports in 2024 went to the US, making it Australia's largest sheepmeat trade partner, ahead of China. While the US is also an important destination for Australian wine exports.
Nine waves
The report says current US policy is using tools of "statecraft", such as tariffs, to achieve wider political goals and, in doing so, creating "waves that are hitting shores abroad". Food and agribusiness sectors will likely see wide-ranging impacts across the globe and along the entire supply chain, it says.
The nine waves and some potential impacts on global food and agriculture include:
- Colombia – significant impacts for US imports of cut flowers and coffee;
- Mexico and Canada – 25 per cent tariffs on most goods, along with a 10 per cent tariff on Canadian energy imports. Could heavily impact energy sector and agricultural supply in North America, increasing costs;
- China – a 10 per cent tariff imposed on Chinese goods. Retaliatory measures from China have been put in place, but do not yet affect major US agricultural exports like soybeans;
- Ukraine – to ensure continued financial and military support, a US-Ukraine deal that would give the US access to Ukraine's vast supplies of rare earths including lithium is in the final stages;
- Houthis (Red Sea/Suez Canal) – recent US pressure on the Houthi rebels and the Hamas-Israel ceasefire agreement have seen the Houthis announce they would cease attacks on most vessels in the canal;
- Panama Canal – President Trump has expressed a desire to take back control of the canal, a crucial shipping route for US trade. This could have significant implications for global maritime agricultural trade;
- Europe – the EU may face US tariffs on products, including machinery and pharmaceuticals as well as spirits, wine and agricultural goods;
- US Agency for Development (USAID) – funding cuts have impacts for agriculture, with the agency, which administers foreign aid and development assistance, having purchased USD 2 billion in US-grown crops in 2024 and
- Steel and aluminium tariffs – increased US tariffs on steel and aluminium may disrupt supply and increase packaging costs for food and beverage manufacturers.
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