Trump's New Tariff Plan:
Impact on Australia and Global Trade

President Donald Trump announced sweeping new tariffs on global imports to the United States, affecting approximately 60 countries worldwide.

While many nations face country-specific tariffs of up to 49 percent, Australian exporters will be subject to a more moderate 10 percent "minimum baseline tariff" applied globally.

The announcement is particularly significant for Australia, which exported approximately $23 billion worth of goods to the US last year.

The Announcement and Global Impacts

Speaking from the White House Rose Garden on Wednesday (Thursday AEDT), Trump revealed his "Liberation Day" tariffs, claiming they would help rebuild the American economy and prevent "cheating."

He displayed a chart showing significantly higher tariffs for major trading partners:

• 34 percent for China (which could reach 54 percent when combined with existing duties)

• 20 percent for the European Union

• 25 percent for South Korea

• 24 percent for Japan

• 32 percent for Taiwan.

Trump framed the move as standing up for American workers, saying, "For years, hard-working American citizens were forced to sit on the sidelines as other nations got rich and powerful, much of it at our expense. But now it's our turn to prosper." The president emphasised strong enforcement, warning of potential 10-year jail sentences for those caught avoiding tariffs.

Fee margins have gradually declined despite growing FUA, with Hub24's revenue margin falling from ~0.57% in 2018 to ~0.32% by 2023. Both companies have passed scale benefits to clients through lower fees, limiting pricing power but maintaining consistent profit growth due to the expanding market—comprising $3.5 trillion in Australian household assets and approximately $4 trillion in superannuation pools.

The Impact on Australia

Australia has avoided the higher country-specific tariffs imposed on other nations but will still face the global baseline 10 percent tariff. During his announcement, Trump specifically mentioned Australian beef imports, claiming that Australia "bans American beef" while the US imported $3 billion of Australian beef last year. Though this characterisation is disputed, Australian beef farmers may face challenges from these new tariffs.

However, analysts from ANZ suggest Australian beef exports could weather the storm relatively well, noting that the 10 percent tariff is less than initially feared and applies equally to competitors like Brazil. Michael Whitehead, ANZ's director of agribusiness, indicated that American consumers view Australian beef as the safest and highest quality option, which may help maintain demand despite price increases. Additionally, with US cattle availability at a 60-year low, America will likely continue needing imported beef for years to come.

When Does it Take Effect?

The implementation of Trump's new tariff plan will occur in two phases. The baseline 10 percent import taxes affecting Australia and other nations not facing country-specific duties will take effect after midnight on Saturday, April 5.

The higher "reciprocal" duties targeting specific countries with large trade imbalances with the US will commence at 12:01 am on April 9. Canada and Mexico, the United States' two largest trading partners, are exempt from this new tariff regime as long as separate 25 percent tariffs related to drug trafficking and illegal migration remain in place. Exemptions on goods covered by the USMCA North American trade agreement will also continue.

DISCLAIMER: Please note that the information provided in this newsletter is for educational purposes only and should not be considered financial advice. It is not intended to encourage you to buy/sell assets or make economic decisions. We strongly recommend conducting your own research before making any investment.