Since the beginning of US President Donald Trump’s administration, the media has been flooded with updates about his tariff policies. We understand that the saturation of updates besides news of impending fascism in the country can be overwhelming, and economics is boring. So, here is Farrago’s breakdown of Trump’s tariffs on Australia.

So Firstly, What Are Tariffs?

Tariffs are a tax placed by the government on imported goods into the country. This means the revenue of the tax goes to the domestic government—in this case, the US. Thus, importers pay the increased tariffs to the government, but often also raise prices whose costs are passed to the consumer. By making foreign goods more expensive, tariffs can fulfill multiple purposes, including: making domestically produced goods more competitive, increasing government revenue and reducing unfair trade by sparking trade negotiations. 

For example, if a country A were to place 10 per cent tariffs on country B’s steel. An importer would have to pay the price of the original cost plus the tariffs and then often sell it at an increased price to place the burden on the consumer instead. This means if local steel were $11 per unit and foreign steel were $10, the 10 per cent tariffs would raise it to $11 as well, encouraging consumers to buy domestic instead.

A Breakdown of Trump’s Second Term Tariffs

On 12 March, Donald Trump officially placed 25 per cent tariffs on all steel and aluminium exports, Australia was not afforded an exemption. This decision was made despite Trump’s previous claims that he would exempt Australia from his tariff spree. 

“Government will continue to put forward a very strong case for an exemption noting that the last time this occurred it took months for that exemption to be granted,” Prime Minister Anthony Albanese noted in a press conference held on the same day. 

Unlike other recipients of these tariffs, Albanese decided not to retaliate economically, calling  tariffs to be a form of “economic self harm and a recipe for slower growth and higher inflation.” He instead advised Australians to buy local.

This first round of tariffs disrupted a mostly stable relationship between Australia and the US. “This is against the spirit of our two nations’ enduring friendship, and fundamentally at odds with the benefits that our economic partnership has delivered over more than 70 years,’ said Albanese. 

Two days later, the federal government offered the US access to critical minerals in an attempt to achieve exemption from these tariffs. 

“We would very much like to have a partnership with the US, but if they don’t want to do that, then that’s up to them and we’ll continue to work with other nations as well,” said Resource Minister Madeleine King, justifying their offer of critical minerals to the US. “The truth is these minerals and rare earths are in high demand,” she told the ABC to make this offer more appealing.

On 2 April, the US announced that it would be imposing a 10 per cent baseline tariff on all countries. Unlike the previous steel and aluminium levies, this tariff would impact all exporters in Australia. Perceiving the US to have been economically shortchanged by its trading partners, Trump purported this broad package of tariffs  to be “reciprocal.” He dubbed 5 April, the day of their implementation, “Liberation Day.”  

“President Trump referred to reciprocal tariffs. A reciprocal tariff would be zero, not 10 per cent,” Albanese responded. 

Despite similar outrage from international trading partners, the tariffs came into effect on 5 April. This outrage would persist following the tariffs’ enactment. 

The President of Australia’s National Farmers’ Federation (NFF), David Jochinke, expressed his disappointment. “The NFF has long championed free and fair trade, not just for agriculture but all industries, recognising its role in global economic growth and stability. Australian agriculture is unwavering in its commitment to this.” 

“It is insulting to the Australians, undermines our national security and frankly makes us not a good partner, ” said Senator Mark Warner during a US Senate finance committee hearing on 9 April.

At the end of July, Trump unveiled further “reciprocal” tariffs on multiple countries. Despite threats that he would raise Australia’s baseline tariffs to 15-25 per cent, the country was spared—its exports continuing to be taxed at 10 per cent. 

Where previously all low-value imports to the US were exempt from these tariffs, Trump unexempted the items on 29 August, placing country-specific tariff rates on all goods valued at $US800 USD or less.

A US federal appeals court ruled that many of Trump’s “Liberation Day” tariffs were illegal, finding that the  International Emergency Economic Powers Act (IEEPA), which he used to legally justify the broad tariffs, did not apply. 

Background and Implications of the Tariffs

This rift between Australia and the US in economic policy is not unique to Trump’s second administration. Trump previously placed tariffs on Australia in 2018, however Australia managed to reach a deal after months of talks.

The US and Australia previously diverted on foreign policy during Trump’s first administration. This revolved around the Trans Pacific Partnership (TTP), a trade partnership with Europe, where Trump withdrew after eight years of negotiations. Meanwhile, Australia remained interested in pursuing trade agreements with Europe, later agreeing to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in 2025. 

Australian public opinion on the US has also plummeted under the first and second Trump administrations. In 2016, a poll found that 45 per cent  of Australian adults thought Australia should distance itself from the US if Trump were to be elected. Now, shown in a poll published in  March 2025, 44 per cent of Australians preferred  an independent foreign policy over a closer alliance with the US.

This change in public opinion has strong implications on AUKUS—a trilateral security partnership between Australia, the United Kingdom and the United States. 

In the same 2025 poll, 48 per cent of Australians expressed that they believed the US would not defend Australian interests. 

Lack of confidence in his ability to handle AUKUS was exacerbated when, in response to an inquiry about the partnership, Trump responded, “What does that mean?”

Albanese, however, is unconcerned, he told reporters the next day, “a lot of acronyms in this business and we all get thrown at them from time to time.”

With Trump seeming disinterested in placing additional tariffs on Australia, and Albanese’s tame reactions, an extreme rift between the US and Australia seems unlikely.