Australian business leaders raised concerns over the Trump administration’s tariffs, but experts said that the levies will not have a direct significant impact on the land down under.
Beatrice Toh, founder and director of silicone playmats retailer HeyDoodle, said that her company is now facing uncertainty and is now reassessing the next steps for the business.
While HeyDoodle produces some of its products in Australia, most of its items are primarily manufactured in China.
“We were making good progress in HeyDoodle’s quest to expand across the US, and for a while, it was a glimmer of positivity for my business amid very difficult economic conditions with such high operating expenses and other pressures of operating right now,” Toh said.
“After investing heavily in establishing a US base – including extensive research, certifications, logistics, trademarks, and stock – my team now faces an uncertain future.”
HeyDoodle is not considering increasing its prices as it would affect the marketability of its products.
“To be blunt, [the] news of the new Trump tariffs is devastating. It’s really disheartening as a small business owner who has put so much effort, expense and other resources to crack into the US market,” Toh said.
“We’re now hesitant to send more stock to the US, fearing unpredictable costs, yet we will struggle to fulfill orders without it.”
Toh is not alone in her sentiments, with the Business Council of Australia (BCA) also expressing disappointment and fears over how the tariffs would negatively affect the economy.
“The United States is a long-standing friend and ally and we’ve historically stood together through thick and thin, and so every Australian should be disappointed by these tariffs,” Bran Black, BCA CEO, said.
“As a trading nation, free and open access to global markets is critical for Australia, especially as one in every four of our nation’s jobs relies on trade.”
Black noted that the BCA does not support retaliatory tariffs and the council will continue to engage with businesses and its contacts and counterparts in Washington with hopes that Australia will be exempted from the tariffs.
“There are so many reasons why Australia should be exempt from any tariffs, including that the US has a trade surplus with us and the existence of long-standing cultural and military ties between our countries, especially now with the AUKUS agreement.”
While the US suspended the higher “reciprocal tariffs” it imposed to several countries for 90 days, Trump’s 10 per cent “baseline” tariff on imports from Australia and other nations have begun.
And for Chinese imports into the US, a tariff of 145 per cent has taken effect.
What do experts say?
Amid the uncertainty, experts said that the tariffs do not have a direct significant impact to Australia.
“The direct effect on the Australian economy is not strong and we may even benefit from lower prices of imported goods,” Vladimir Tyazhelnikov, senior lecturer at The University of Sydney’s School of Economics.
“However, a major risk for Australia is the potential slowdown in East and Southeast Asia, which are key destinations for Australian exports.”
Luke Hartigan, a lecturer also from The University of Sydney’s School of Economics, said that Australians should not be alarmed as the country is well-positioned to adjust.
“While Australians are rightly worried, they should not be alarmed. The direct effect of the ‘Liberation Day’ tariffs on Australia is going to be relatively small,” Hartigan said.
“The bigger concern is how Australia’s major trade partners — especially China — respond to newly imposed tariffs by the US. If those economies go into recession, that could have an impact on us via our trade linkages.”
“However, we are well placed to weather the coming global storm clouds. First, the Australian dollar is very flexible and it’s likely to fall significantly. This will provide a cushion to the Australian economy.”