Can’t Escape Trade War – “Deputy Sheriff” Australia Fears Trump Would Slap Tariffs On Beef & Other Agricultural Products

Can’t Escape Trade War – “Deputy Sheriff” Australia Fears Trump Would Slap Tariffs On Beef & Other Agricultural Products


March 25th, 2025 by financetwitter



Known as the United States’ “deputy sheriff” in the Asia-Pacific region, Australia is arguably one of the most vulnerable allies in the second Trump tariffs. While Canada dares to claim it could win the ongoing trade war with the U.S., the same cannot be said about Australia. In fact, the Aussie is so weak it dares not even condemn Trump like what the Canadians did.

After Donald Trump performed a few rounds of spectacular flip-flopping on tariffs, Canada is waiting for the coming April 2 deadline – declared as “Liberation Day” by the U.S. president – to see if Washington will indeed put in place what is called “reciprocal tariffs that seek to equalize U.S. tariffs” with the duties charged by trading partners. Don’t be surprised if Trump makes another U-turn again.

The U.S. is now focusing on imposing tariffs to about 15% of nations with stubborn trade imbalances – called the “dirty 15” – which included nations such as Australia, Brazil, China, Canada, the European Union, India, Japan, South Korea, Russia, Mexico, Vietnam and others. The plan for April 2 could raise tariffs on the U.S.’ most significant trading partners to levels not seen in decades.


For the time being, U.S. allies are praying and hoping that there could be tariff exemptions, or more flip-flopping. They hope Trump would be spooked by the stock market meltdown, a possibility of a recession, or a potential slowdown in American economic growth. However, Trump told oil executives last week during a meeting at the White House that he didn’t want to grant exceptions on tariffs.

To be fair, Mr Trump has tried to be nice and gave automakers a temporary reprieve from tariffs on Canada and Mexico, before suspending those levies more broadly for all products that comply with the USMCA trade agreement. But right after he did that, people had started criticizing him for backing down, and mocked that his approach to tariffs could shift in the coming days and weeks.

Even if he flip-flops (again), only American corporations in the Fortune 500 may get exemptions. Still, they have to pay top dollars to lobbyists to find loopholes or to create paths to achieve that. They have to flatter the president or to cook up some good stories to get exemptions, not to mention the capitalists have to be in the Trump’s circle of buddies to enjoy such privilege.


Therefore, countries like Australia may not get exceptions or exemptions. When Trump announced the first round of 25% tariffs on steel and aluminium, including from Australia, Canberra was mostly silent. Prime Minister Anthony Albanese only said Trump’s actions were “entirely unjustified” and an act of “economic self-harm” on the part of the U.S. But he said Australia would not take any reciprocal measures.

During Trump’s first term, Canberra under then-Prime Minister Malcolm Turnbull undertook nine months of painstaking negotiations with Washington to secure an exemption. This time, Turnbull said it would be “a lot harder” for Australia to get a similar deal struck in 2018. But as expected, there are already speculations that Trump may “back off” from some of his sweeping tariffs.

But even if Australia gets some exemptions on tariffs on its steel and aluminium, it will be largely due to local industries in the U.S. putting pressure on the Oval Office. The weak Albanese government had already tried – and failed – to bribe the U.S. with a deal which guarantee supply of critical minerals in return for an exemption on the steel tariffs.


The April 2 deadline could see tariffs targeting pharmaceuticals, agricultural and other sectors. Australian farmers are anxiously waiting to hear whether meat exports will be hit, especially because the United States is Australia’s number one international market for beef, lamb and goat meat. Aussie producers sold A$6.2 billion in beef and meat to the U.S. in 2024 – nearly 30% of the A$39 billion total export that year.

Again, Canberra said it would not consider retaliatory tariffs on America. Instead, trade minister, Don Farrell, tries to “educate” Trump that it could raise the price of American burgers. Farrell said since most of Australia’s beef exported to the U.S. went to fast food giant McDonald’s, any new tariffs would inevitably increase the price Americans pay for their cheeseburgers or Big Macs.

While Australia is on better footing than most countries when it comes to trade with the U.S., Australia also consistently ranks in the top five countries with trade surpluses with the U.S. after China, European Union, Canada, and Mexico, just to name a few. The Albanese government has been criticized for still haven’t travelled to the U.S. to lobby Trump personally for Australian exemptions.


Still, even if Australia could miraculously lobby for special exemptions, which it can’t because other American allies would cry double standards or discrimination, the Aussie won’t escape entirely the chaos created by Trump’s “Trade War 2.0”. About 40% of Australia’s exports goes to China, making it the biggest destination by far. Most of this is Australian iron ore and other minerals that are used in China’s construction and manufacturing sectors.

And because the already sluggish Chinese economy would be further weakened by Trump’s tariffs, especially China’s property sector, it will only hurt the Australian mining sector. The reduced demand for Australian goods means less demand for the Aussie dollar, causing the value of the currency to fall and makes the things Australians buy from abroad more expensive.

However, depending on the currency exchange and the damage done to other economies like Canada, Australia could benefit from the U.S. tariff war. Known as “trade diversion”, the tariffs on Canadian aluminium could shift American demand toward Australian aluminium as Aussie exports become more competitive. The Australian dollar has dropped to a 5-year low after the tariffs.


Crucially, because North American production networks are so highly integrated, the effect of tariffs on Canada and Mexico will be much more disruptive. For Australians, this could mean higher prices and supply disruptions, not just for the products the Aussies buy from the U.S., but for anything that depends on a North American supplier at any stage in the production process.

Making matters worse, Aussies are still feeling the effects of the supply chain disruptions caused by Covid-19, including the skyrocketing inflation in 2021 and 2022 and the subsequent high interest rates. In 2024, Australia’s economy experienced a modest growth of merely 1.3% – its slowest annual growth in 32 years (excluding 2020).

Besides, who can guarantee the U.S. President – still fresh in his 4-year term – will not escalate the current tariff war with everyone, both friends and foes? Trump, who says free trade has allowed other countries to take American jobs and industries (and previously claimed that trade war is easy to win), is poised to take his trade fight to a whole new level, risking a much bigger retaliation.


But Trump is not Australia’s only enemy. America’s tech sector is lobbying the Oval Office to open a new battlefield with the Australian government – over its rules governing social media and streaming services. Silicon Valley, whose top executives have developed close relationships with Donald Trump, is now pushing the new president to pressure Australia to relax its regulations or risk retaliation.

The capitalists such as Facebook and Google are not happy after Canberra forced them to sign deals to pay the ABC and commercial media outlets A$250 million annually to compensate for using their content. In retaliation, President Trump could impose new tariffs on Australia as part of his mission to create more favourable trade conditions for U.S. companies.