Australia’s record gold exports to US set back its case for tariff relief as Trump trade war looms
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Industries across the country are bracing for the impact of the Trump administration’s worldwide tariff regime.

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A run on gold in the US – fanned by fears of a global trade war – has given Australia its first trade surplus with the US in decades, undermining the government’s key argument for exemption from Donald Trump’s impending global tariff regime.

Australia will reportedly be included in a comprehensive global tariff regime of 25% on aluminium and steel imports from Wednesday, which is set to expand to other sectors, such as agriculture and pharmaceuticals, in coming months.

The White House briefed Australian media on Wednesday that Trump had listened to Australian requests for an exemption and .

Steel and aluminium are minor exports to the US for Australia but other sectors Trump has vowed to target, including pharmaceuticals and agriculture, are significantly more exposed.

Australia is continuing to press for exemptions. A government spokesperson said on Wednesday morning it would have “more to say” on the issue.

Industry groups in Australia are preparing to be hit with tariffs, the first of which will be imposed from 12.01am Wednesday, Washington DC time. Still, some analysts have argued, the greatest impact could be beyond the tariffs themselves but rather the potential depressive impact of US tariffs on global trade.

In a note to investors, Shane Oliver, the chief economist at AMP, said it was “hard to see” how Australia could avoid some direct tariffs on exports to the US.

“Even if we avoid the 25% tariff on our steel and aluminium exports – which is looking questionable – we likely face tariffs on our pharmaceutical exports, which are more than double the value of our steel and aluminium exports to the US, or meat, which is our biggest export,” he wrote.

“The main threat to Australia by far comes from Trump’s trade war leading to a hit to global trade and growth leading to less demand for our exports.”

The Australian stock market shed more than $45bn on Tuesday after US markets fell dramatically overnight on fears of a recession.

“The market’s reacting at the moment to a number of factors, but things like concerns of Trump’s tariffs, that this could trigger an economic slowdown,” said a CommSec market analyst, Steven Daghlian.

“The unpredictability of the trade war was something that really weighed on markets last week.”

Trump has argued that his administration needs to introduce tariffs to remedy large US trade deficits with major trading partners including China, the EU, Vietnam, Mexico and Canada. He has argued that unfair trade practices had exploited the US for generations.

On Air Force One this week, he told reporters tariffs would restore US wealth: “We’re going to take in hundreds of billions of dollars in tariffs, and we’re going to become so rich, you’re not going to know where to spend all that money.”

One of Australia’s oft-made arguments to the new US administration in advocating for exemption from the tariff regime is that Australia is one of the few countries which runs a trade deficit with the US (because the US exports more to Australia than it imports from Australia).

“The United States enjoys a trade surplus with Australia, and has done so since the Truman presidency,” Australia’s prime minister, Anthony Albanese, said this week.



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Except in January 2025, the month Trump returned to office, Australia had a surplus of US$2.2bn, sparked largely by a massive increase in the export of Australian gold to the US.

The  that the US exported US$2.4bn worth of goods to Australia but imported US$4.6bn, for a deficit (from the US side) of just under $2.2bn. It is the only deficit in records dating back to 1985.

Australia  in January – worth US$2.9bn – according to Australian Bureau of Statistics figures, the highest figure in records dating back to 1995. Investors in the US, fearful of the impact of an uncertain and potentially punitive tariff regime, have taken refuge in the safe-haven asset, driving  last month.

Historically, Australian imports of expensive manufactured goods – aeroplanes, machinery, vehicles and computers have given the US a dominant surplus over Australia. Those imports are only partially offset by Australian exports, led by meat and pharmaceuticals.

Both agricultural products and pharmaceuticals have been flagged by Trump as targets for a new round of tariffs

In February Trump said pharmaceuticals would attract a tariff “25% or higher … it’ll go very substantially higher over the course of a year” but that he would delay their introduction to give pharmaceutical companies time to move their production operations inside the US to avoid the levy.

Innes Willox, the chief executive of the Australian Industry Group, said while the government should continue to advocate on behalf of Australian exporters, “it is very clear we are dealing with a very different situation to the last time we faced US tariffs”.

“Parts of the administration are emboldened and the geopolitical situation is different so escaping their impact this time is much more difficult.”

Willox said the new US administration was acutely sensitive to criticism: “Any perceived slight or antagonism will not help our cause,” he told Guardian Australia.
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