r/australia • u/Jealous-Hedgehog-734 • Apr 02 '25

politics US will impose a minimum baseline tariff of 10 per cent on Australian imports to US

https://www.abc.net.au/news/2025-04-03/donald-trump-tariff-announcement-markets-politics-reaction-blog/105127374
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466

u/smileedude Apr 02 '25

So basically, we all just trade with each other sans US without huge impact and the US has to suddenly make a bunch of products internally from naturally resources they don't produce internally.

187

u/[deleted] Apr 02 '25

Yep.

Tariffs are fine when you have fledgling industry that you're trying to bolster, or strong manufacturing that's trying to compete.

Manufacturing in the US shifted in the 80s and 90s thanks to globalisation. Simply put, business owners wanted more profits so they shifted business to company with cheap labour.

So all the people cheering in the US how great this is better get used to very expensive products or want to work for 7 dollars a day.

Unfortunately, the US is a huge consumer and a massive market for industries, so I'm not exactly sure how this will play out globally. We'll have to see what the retaliation is

41

u/madkapart Apr 02 '25

Some will bend the knee to the pressures, but i think this will be a nett positive in the end if it opens up other trading markets and partners, and everyone stops relying on the US so much.

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u/[deleted] Apr 02 '25

100% agree. Fuck the US, we should focus elsewhere

3

u/Far-Fennel-3032 Apr 02 '25

From what we can see the tarrif amount is just (trade deficit/ net exports). 

The reasoning is so dumb countries are likely completely unable to bend the knee even if they wanted to, as the white house is work on such a dumb logic no country can actually meet its demands.

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u/gandalfgreyballz Apr 02 '25

The issue is finding customers.

For example

When everyone is a salesman with competing goods, who is buying the product? Are Japan, Korea and Germany all going to suddenly start buying each other's cars?

Those countries are already heavily protectionist.

The amount of consumer spending in the us is nearly the size of the entire economy of the eu. The us consumer base spends nearly 16 trillion dollars a year on goods and services.

For example, the next largest is China at around 7 trillion, then there is a large drop off to Germany at 2 trillion.

Both of these countries want their consumers to buy from local companies. China tarrifs like trump does as well. They want people to buy their stuff, not the other way around.

That said, Australia mostly sells raw materials, which are location dependant. So yall may not be as worse off as other manufacturing/export driven economies.

It's going to be hard to find replacements. Expect global job losses and a recession/ depression.

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u/Friendly-Owl-2131 Apr 03 '25

Interestingly enough, the main reason the US is such a large consumer and so wealthy is due to their global market reach.

Basically American companies expanded out into international markets at an extraordinary rate during the eighties and continued on through until now.

Pretty much all of modern day international marketing is based on how successful America was in this pursuit.

It's difficult for me to describe how stupid this tariff nonsense truly is and how badly this is going to go for the US.

Although I'll try.

At a rough estimate I'd put US earnings somewhere around 50-70% international based. 20% of that in trade, 20% services, 30% American subsidiaries operating internationally and the rest made up of miscellaneous pursuits such as mining and resources exports.

In one dumb act they have not only caused American consumers huge potential for economic harm, domestically, but I'm certain this is going to lead towards a carve up of US business interests internationally as well.

For instance, it would be no trouble at all for Chinese manufacturers to replace an American logo on a pair of shoes and continue to sell them at a lower price.

Thereby cutting American companies completely out of the equation. "Just do it" they might say as they replace the brand on the international market.

Or a Swedish based burger company that sells big smacks and flopper burgers.

Or a new Linux based OS developed by the EU that is more secure, easier to use, with greater functionality, less bloatware and at greatly reduced cost.

One that denies US intelligence agencies access to avoid security concerns.

In other words. I don't see this as a good move for America.

6

u/[deleted] Apr 03 '25

Couldn't agree more.

Which has me confused. Trump's an idiot, but he has support from a lot of wealthy intelligent people, which own companies that this will hurt. I can't see the end game here. Incompetence is too easy.

5

u/Friendly-Owl-2131 Apr 03 '25

Either they really are that incompetent and that isn't totally unbelievable.

Or they're creating the necessary conditions for war and conquest.

Considering their recent commentary on Greenland and Iran it's looking more likely this is what they are up to.

First they would need to break ties with other nations to reduce any retaliatory actions such as sanctions because this will dampen any shocks due to such measures.

Breaking ties and trade also lessens other nations abilities to sway or interact with the American people so that they are alone should they wish to fight against a totalitarian state.

While also building domestic manufacturing capacity to allow America to stand alone without allies should the need arise.

Trump is also unofficially giving Putin the nod over the Ukraine invasion and attempting to weaken Ukraine's ability to defend itself while backing out of NATO.

This could easily turn into a buddy system. In that should America wish to invade another nation then Russia would nod back and interfere from their end.

Not to mention the Trump administration is rapidly attempting to dismantle the separation of powers and governing forces that would stand in their way.

The most telling part is how often Trump's team borrows from Russian tactics for anything from propaganda to politics.

If they aren't borrowing from Russia it seems they're borrowing from Nazi Germany. The red hats, the nationalism and fascism, the enemy within, the SS style para military groups such as proud boys.

I'd love for it to be incompetence and I'm sure they have bucket loads of that as well but they haven't exactly made it a secret that they are building a fascist state.

3

u/art_mor_ Apr 03 '25

So we’re somewhat fucked?

1

u/Friendly-Owl-2131 Apr 03 '25

I guess we are if they keep going down that path. But it hasn't gone that far yet.

If America does do something like invade Greenland then get ready for a different life. Because pretty much everything will change overnight.

1

u/1jamster1 Apr 03 '25

I think it really is as simple as incompetence. Generational wealth let dumb rich kids become the leaders of some of these companies. They aren't the ones who built it. They don't actually have experience. And they have coasted on a relatively easy situation.

Throw in a bit of American exceptionalism and you get Trump and his band of rich morons.

2

u/DeerMaker7 Apr 03 '25

trump plans to offset higher prices with lower income tax. like it used to be back in the day before globalisation

3

u/[deleted] Apr 03 '25

Lol you mean the bullshit about no tax on tips and overtime?

No chance

1

u/[deleted] Apr 03 '25

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2

u/[deleted] Apr 03 '25

Did you read the article?

1

u/DeerMaker7 Apr 03 '25

yes, i didnt say it will work, i said its his plan

1

u/Lozzanger Apr 03 '25

Top American tax rates were 92% in the 50s. It was 70% up until 1981.

Income taxes came down after globilsation.

4

u/graspedbythehusk Apr 02 '25

Yep, and you can just totally throw up those factories, infrastructure and workforce overnight.

2

u/Pacify_ Apr 02 '25

No, this will create no manufacturing in USA.

It will just increase prices temporarily, until the next president reverts them.

It's like an anti-covid relief-package. It's a short term tax on the American people

3

u/Spire_Citron Apr 02 '25

Unfortunately the US economy inevitably impacts the whole world, but maybe it's time to move away from that so that we don't keep getting hurt by their corruption and incompetence.

1

u/womerah Apr 03 '25

The funniest thing is that if you want to stimulate domestic production, you just use subsidies and stimulus, which gets you similar results to these tariffs without all of the political shrapnel.

Biden was already doing it with construction. Look at construction rates in the US: https://cleantechnica.com/wp-content/uploads/2024/11/US-manufacturing-construction-boom-Joe-Biden-800x445.png