The decision to not exempt Australia from American tariffs on steel and aluminium was disappointing, unnecessary, senseless and wrong, Treasurer Jim Chalmers said at the
Queensland Media Club yesterday.
“We deserve better as a long-term partner and ally," he said.
“Our producers make amazing, sought-after, high quality aluminium and steel, and they will diversify, but they shouldn't have to.
“Tariffs and escalating trade tensions are a form of economic self-harm.
“They are self-defeating, and they are self-sabotaging, because more trade restrictions mean less growth and more inflation.
“The impacts of what we’re seeing will not be confined to one industry, one community or one quarter in our economy."
The risk of recession in the world's largest economy is rising as well, Dr Chalmers said.
"All of this has consequences for us."
Dr Chalmers, who will deliver the 2025-26 Budget next Tuesday, March 25, said Treasury estimates that the direct hit to GDP from steel and aluminium tariffs would be less than the .02% by 2030 — undermining the individual impact on Australian Industry Group members who will be affected by the derivative rules.
“So, the direct overall impacts on Australia should be manageable, but when you add in the indirect effects, the hit to GDP could be more like 0.1% by 2030," the Treasurer said.
“In fact, over a whole range of scenarios, Treasury found the indirect GDP impacts of a trade war could be up to four times larger than the direct impacts of tariffs on our own economy.
“In a world of retaliation and escalation, the impacts of tariffs are amplified.
“They linger for longer, resulting in a bigger reduction in GDP and bigger increases in prices.
“Our response, as the Australian Government, will be to go for more resilience, not for more retaliation — because more and higher tariffs would harm, not help, our workers, our businesses, our industries and our economy.”
