Ongoing trade tensions between China and the US could have adverse effects on Australia’s agricultural exports market.
As Australia partners with both the US and China in trade, numbers around agricultural exports such as beef and wheat are up as a result of Trump’s tariff.
Peter Draper from the Institute for International Trade says while Australia is reaping the benefits of increased exports now, exporters down under may suffer if and when the tariffs are lifted.
“The US have expanded their range of agricultural commodities and most of those have the potential to directly compete with Australian exports,” he said.
“They [the US and China] haven’t been cooperating for some time, but everyone expects that at some point those tariffs will be lifted and exports will resume.
“When this happens it’s likely to put Australians at a disadvantage,” Mr. Draper said.
Evidence of this is already showing with the Australian dollar dipping below the 70-cent level for only the third time ever.
Any breakdown in trading between the China and the US would put Aussie sheep producers on the back foot, 5,000 of whom reside in Western Australia.
Donald Trump took to Twitter earlier this week to fuel the trade-war fire, warning China not to retaliate against the tariffs he introduced.
..There will be nobody left in China to do business with. Very bad for China, very good for USA! But China has taken so advantage of the U.S. for so many years, that they are way ahead (Our Presidents did not do the job). Therefore, China should not retaliate-will only get worse!
— Donald J. Trump (@realDonaldTrump) May 13, 2019
Trump doubled down on these sentiments the next day, calling for Americans to neglect buying from China to avoid tariffs altogether.
China buys MUCH less from us than we buy from them, by almost 500 Billion Dollars, so we are in a fantastic position. Make your product at home in the USA and there is no Tariff. You can also buy from a non-Tariffed country instead of China. Many companies are leaving China…..
— Donald J. Trump (@realDonaldTrump) May 14, 2019
Miles Barritt from Australian Wool Innovation says positive Australia-China relationships are essential in maintaining economic growth.
“Wool contributed $3.27 billion to the economy in the last financial year, Australia exported approximately 335 kilograms [of wool],” he said.
“Around 76% of that was exported to China, so roughly 260 million kilograms.
“Australia is the largest producer of wool in the world and China is the largest buyer, maintaining this relationship is positive for both parties,” Mr. Barritt said.