Ausbiz – What’s the beef behind Trump’s tariffs?
I joined Ausbiz yesterday on ‘Liberation Day’ to the impact of Trump’s tariffs on Australia’s four major exports to the U.S. – beef, gold and precious stones, pharmaceuticals, and medical equipment.
Each year, Australia exports around 400,000 tonnes or 30 per cent of its total beef output to the U.S. But thanks to its high quality, grass-fed Australian beef is in high demand from American fast-food giants (such as McDonalds) so our beef industry shouldn’t feel that hard of a pinch. And while the introduction of a 10 per cent tariff may cause a slight increase in retail prices (for example, Big Macs increasing by a few cents), the overall impact on American consumers should also be minimal.
In terms of gold and precious stones, the U.S. accounts for only 10 per cent of Australia’s total exports in this category and the fact that Australia relies heavily on U.S. imports (such as farming equipment, and software), a retaliatory response would likely be counterproductive.
As for pharmaceuticals and medical equipment the level of impact will largely depend on the specific product and its demand.
What about the impact on markets? U.S. tariffs may raise consumer prices, and we may see a potential global economic slowdown due to retaliation by the European Union – so a 15% market correction is not inconceivable.
Watch the full segment here: What’s the beef behind Trump’s tariffs?
Chief Executive Officer of Montgomery Investment Management, David Buckland has over 30 years of industry experience. David is a deeply knowledgeable and highly experienced financial services executive. Prior to joining Montgomery in 2012, David was CEO and Executive Director of Hunter Hall for 11 years, as well as a Director at JP Morgan in Sydney and London for eight years.
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