"Today's announcement that Australia will be subject to a minimum baseline 10% tariff is disappointing, but not unexpected, as we deal with an American administration hellbent on remaking the international economic order," Innes Willox, Chief Executive of the Australian Industry Group, said.
"It also sends an ominous signal about what comes next. This will undoubtedly spark retaliation, imposing barriers on well-known trading relationships and driving up costs for businesses and consumers. As more details emerge, particularly how these different tariffs interact with each other, companies will need to make individual assessments on the impact to their businesses, and we still start to feel the consequences in the economy.
"It is particularly bad news for our nation, because we rely on trade for our economic prosperity more than any other economy on earth, with one in four jobs dependent on trade.
"Australia exports around $22billion of goods and products to the US annually, and the US market accounts for 4.1% of our exports. The value of our affected exports is equivalent to 0.8% of GDP. The suggested ban on Australian beef is unjustified and we encourage the Government to continue its advocacy.
"Of particular concern is our advanced manufacturing sector, which has very deep ties to the US. 22% of our elaborately-transformed manufactured exports go to the US, with much higher rates for advanced metals, chemicals and engineering products.
"Global supply chains in these high-value, high-productivity industries cannot be quickly rejigged in the same way that commodities can. Our advanced manufacturers will face profound disruption as global supply chains adjust around the new US tariff wall.
"At least 50 per cent of goods moving around the world are intermediate goods – not finished products, but their components. This means the impacts will be far reaching and go much further than just the products subject to the tariffs.
"Goods destined for the US may likely need to find a new home, raising the prospect of an influx of displaced goods coming to Australia. More than ever, we need a transparent and robust anti-dumping system to work in the legitimate interests of Australian Industry.
"This also reinforces the need to get our policy house in order on issues like tax, deregulation and energy. We cannot hope to thrive in a trade war with policy settings that are internationally uncompetitive, overly-complicated and not fit for purpose," Mr Willox said.
