Meanwhile, the Australian Treasury Ministry said China’s impact would be “significant.”
Treasurer Jim Chalmers has released an analysis predicting Trump’s tariffs on the Australian economy are “slack.”
Australia is subject to 10% tariff on all imports, but steel, aluminum and automotive products receive 25% tariff.
This analysis occurred when the Australian market hit on April 7th, sliding the benchmark S&P/ASX 200 index by more than 4%. However, in previous transactions, the ASX 200 slid 6% over 6% before bounced. The Australian dollar also fell to 60 cents
“While the impact on the Australian economy is expected to be modest, some of the agriculture, energy, mining and durable manufacturing sectors will be more negatively affected than other regions,” the Epoch Times state.
Modeling points out that Australia’s macroeconomic policy setting, including flexible exchange rates and a reliable inflation targeting framework, can help mitigate the impact on the economy.
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“However, this modelling does not fully capture the negative impact of trade hostilities, and does not capture the effects of uncertainty, financial and economic market volatility, or the possibility of additional trade disruptions,” the Treasury added.
On April 3, 2025, an aerial view of the Cosco transport vessel ship, China’s largest transport line, equipped with a shipping container at the port of Long Beach, California. Mario Tama/Getty Images
Australia is hit by baseline tariffs, but several countries, including China, Europe, Taiwan and Switzerland, face far higher import tariffs.
China is subject to 34% mutual tariffs plus the current 20% tariff, with a total hit of 54%.
Australian financial analysis predicts that tariff changes will have a “significant impact” on the global economy.
“U.S. GDP is expected to be significantly reduced as a result of changes to tariff policy, primarily as a result of imports becoming more expensive,” Treasury said.
“By 2027, actual levels of US GDP are estimated to be about 0.8% lower than the tariff-free baseline scenario, while inflation is estimated to increase by about 1.4 percentage points.”
“Oil prices fell 15% over two days. This will affect Americans who work more than the stock market. As interest rates drop annually, we expect mortgage interest rates to be recovered.”
Meanwhile, the Australian Treasury Ministry said the impact on gross domestic product in China and other countries, which have high tariffs, will also be “important.”
“Retaliation measures further amplify the impact. China’s GDP is estimated to be about 0.6% lower than the tariff-free scenario, almost completely reflecting changes in US tariffs,” the analysis states.
However, the Treasury reiterated that it is expected to have a “more modest” impact on the Australian economy.
“The impact of changes in US tariff policy and measures by China is expected to slightly reduce Australia’s production and additional prices, particularly in the short term.”
The Ministry of Finance predicts an inflation bump of 0.1%, with 0.2% in GDP
The Treasury has affected Australia’s true GDP fell 0.1% in 2025 and 0.2% inflation in 2025 compared to a tariff-free situation.
“In the media, the impact on inflation is temporary, but the impact is unevenly distributed as trade-exposed industries, including agriculture, energy, mining and durable manufacturing, are most affected.”
Treasurer Jim Chalmers, speaking to Sydney reporters on July 7, stressed that recent market volatility is being driven by global fallout from tariff decisions.
“We are currently seeing a huge volatility in the global stock market and its own market. Today, Australia lost around 4% on Friday, and the US lost around 6%,” Chalmers said.
“What we’re looking at here is the impact of a series of bad decisions about tariffs, and the whole world is trying to get our heads into their own economy and the impact on the world economy.
Patterson claims that a 10% tariff claims “a massive blow” to exporters
Meanwhile, James Patterson, a spokesman for the Union Campaign, said he “crysed Prime Minister Anthony Albanese of trying to underestimate the seriousness of these tariffs” against Australian exporters.
“I don’t agree, and I don’t think exporters would agree,” Patterson said.
“I think the 10% challenge to exports to the US is a really big blow to their business. What we owe on them is our best efforts to ensure the best deal possible and hopefully exemptions from these. CustomsHe said on Sky News Weekend Live.
Patterson said the prime minister had done a “winning lap” but claims Australia has gotten a lot.We actually only have the same deals that the Islamic Republic of Iran has obtained from the United States. It is an authoritarian government that threatened to assassinate President Trump. ”
“They only got as good deals as Yemen has. It is a country currently run by the foot terrorist organization that President Trump ordered the bombing weeks ago. Therefore, you need to ensure a better deal. ”
