A surge in demand for gold in the United States, driven by concerns over a potential global trade war, has led Australia to achieve its first trade surplus with the US in decades. This development undermines the Australian government’s main argument for an exemption from Donald Trump’s upcoming global tariffs.
Australia is expected to be included in a broad tariff regime of 25% on aluminum and steel imports starting Wednesday, which is set to expand to agriculture and pharmaceuticals in the coming months according to reports. The White House briefed Australian media that Trump had considered an exemption for Australia but ultimately decided against it.
Steel and aluminum exports from Australia to the US are relatively minor, but other sectors targeted by Trump, including pharmaceuticals and agriculture, are more exposed. Shane Oliver, the chief economist at AMP, suggests it is unlikely that Australia can avoid direct tariffs on exports to the US, emphasizing that even if steel and aluminum exports are not subject to a 25% tariff, pharmaceutical exports – which are double the value of steel and aluminum exports – might face tariffs.
The main threat to Australia, Oliver argues, comes from Trump’s trade war impacting global trade and growth, leading to reduced demand for Australian exports. The Australian stock market lost over $45bn on Tuesday after US markets plummets overnight on fears of a recession.
This situation highlights Australia’s ongoing efforts to secure exemptions from the tariffs, a government spokesperson indicated more would be said on the matter. The dispute also stresses that while Australia maintains a trade deficit with the US, the US exports more to Australia than it imports, a point often cited by Australia in its negotiations for exemption. Australia’s exports of gold to the US, which reached a record amount in January, have exacerbated the trade surplus, reflecting investors’ move towards safe-haven assets.
Source: https://www.theguardian.com/australia-news/2025/mar/12/australias-record-gold-exports-to-us-set-back-its-case-for-tariff-relief-as-trump-trade-war-looms
