The US – China trade war has moved from being a threat to a reality. What’s the impact of this trade war on Australia?
China is Australia’s largest trading partner. It is feared that if China and the United States continue this trade war, and implement multi-billion dollar tariffs against each other, it will be detrimental for Australia.
A Productivity Commission report stated that the current trade war could cause Australia’s living standards to decline. It may end up costing 100,000 Australian jobs, and each Australian household could lose up to $1500 per year.
According to Sydney Morning Herald, Dr Shiro Armstrong, Director of the East Asian Bureau of Economic Research at ANU said, “The expansion of a trade war is bad for Australia if it unravels the global trading rules.
If things get worse, Australia should be anxious about the entire global trading system.”
Australia exports approximately 35% of its trading products to China, the equivalent of around 8% of its GDP. Iron, ore, and education are Australia’s dominant export industries.
Helen Sawcvak, CEO of the Australia China Business Council criticisedthe US tariffs against China, stating that the global trade war will slow economic growth and impact on all trading nations.
“No one wins a trade war, especially not Australia. We rely on access to open markets to sell our goods and services to the world. What is needed here is cool heads and sober judgment,” Jason Clare, Federal Opposition trade spokesman, said.