US tariffs in context: Australia’s wood & wood products tradeThursday 17 Apr 2025
The situation is shifting, changing, and remains very fluid, which makes providing analysis at a point in time a little tricky. By the time a paragraph is written, the US President has changed his mind. This analysis seeks to address the ‘timeliness’ problem by providing an understanding of Australia’s wood products trade with the USA and focussing on what appears to be the underlying motivation of the US administration, and the risks they might pose for global trade. What we know. Something of a timeline On 2nd April, the US President imposed ‘base’ 10% tariffs on Australia’s imports to the USA. President Trump also announced much higher ‘reciprocal tariffs’ on many countries, with the largest tariffs imposed on Asian nations, including China, and some uninhabited, non-trading islands. A full list is available here. As the world quickly learned, the rationale for the tariffs was a mix of misunderstanding, economic voodoo and a failure to check whether some locations were even countries or inhabited by anything other than penguins. Laughable, certainly, but not a joke. Global capital and stock markets immediately faltered, with losses recorded on the US exchanges equivalent to those of the global financial crisis and the more-recent pandemic panic. Investors recalculated risks and devalued assets worldwide. Major institutions reported analysis that a global recession in 2025 was a 50/50 bet, and a US recession was pretty much assured. Some countries responded with retaliatory tariffs, most notably China, and the European Union chimed in similarly. Other countries, less able to withstand pressures, reportedly queued up to, as President Trump himself said: “…negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non-Monetary Tariffs,… ” In an overnight backflip on 9th April, the US President used these apparent concessions and their impact on stock and capital markets to reverse the retaliatory tariffs, pausing them for 90 days. Nearly all countries are on a diet of 10% tariffs for their imports to the USA, while they negotiate with their bully. We discuss this further toward the conclusion of this analysis. The notable exception to the 10% tariffs is China, of course. China has reciprocated with tariffs on imports from the USA, such that (at the time of writing), the two countries have 125% (China into USA) and 84% (USA into China) tariffs. These ridiculous tariff levels essentially stall trade between the two great powers. We also discuss this at the conclusion of this analysis. More >> Source: FWPA | ||
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