Australia might face further challenges from United States tariffs beyond the broad 10 per cent rate implemented across the globe, the Ambassador to the United States, Kevin Rudd, has flagged.
The US is currently investigating whether to expand tariffs to sectors of national security concern under Section 232 of the Trade Expansion Act of 1962, Rudd said in a webinar organised by Austrade last week.
The Trump administration has already expanded the tariffs on steel and aluminium from 25 per cent to 50 per cent under this section as of 4 June this year. Only the United Kingdom has been able to negotiate a 25 per cent tariff rate. The US is now considering expanding the tariff hike to other sectors.
“These are investigations into another list of industry sectors conducted by the Commerce Department on the national security implications for the United States in support of either existing or changed tariff circumstances,” Rudd said in the webinar organised by Austrade.
I cannot say to you that the President has decided that that's the end of his list of Section 232 investigations. That's the list that we're dealing with as of now
“In addition to steel and aluminium, there’s auto and auto parts, as well as copper, timber, pharmaceuticals, critical minerals, semiconductors, truck parts, commercial aircraft, unmanned aircraft and polysilicon.
“There are about 10 of these underway at the embassy level. We are deeply engaged with the Commerce Department in each of these reviews [and] we are deeply mindful of the Australian export interest in each of these categories.”
He pointed out the list isn’t necessarily exhaustive and there might be further additions down the track.
“I cannot say to you that the President has decided that that’s the end of his list of Section 232 investigations. That’s the list that we’re dealing with as of now,” he said.
Environment for Tariffs is Rapidly Changing
Rudd emphasised the embassy is fully engaged in negotiations with the US at various government levels, including with senior executives in the White House.
But he also pointed out that although Australia is subject to a 10 per cent tariff, there are many countries far worse off.
“Nobody, I repeat nobody has managed to produce an outcome, so far, less than the 10 per cent baseline tariff. In fact, when we look at our friends in the rest of the region where they currently stand, the three Southeast Asian [countries] you just mentioned (Indonesia, the Philippines and China) are standing at 20 or 19 per cent,” he said.
Nobody, I repeat nobody has managed to produce an outcome, so far, less than the 10 per cent baseline tariff.
The environment around the US tariffs has changed substantially from its initial phase and is characterised by an acceleration of the pace of new tariffs coming out, he said.
“Don’t be surprised if there are generic letters issued to a number of countries with whom negotiations have not been concluded,” he said.
He also warned that it is unlikely any country will be able to negotiate a tariff rate below the broad 10 per cent rate the Trump administration implemented globally.
“Don’t hold your breath for anything south of 10 per cent,” he said.
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