Australia has escaped a tariff hike to the baseline rate of 10 per cent amid fears that President Trump could double the levy to 20 per cent.
President Trump issued an executive order on Thursday night confirming new tariff rates for countries under special deals with world leaders and revised tariffs for other countries.
Australia was not on the list of changes, and the executive order states that countries not on the new list would remain at 10 per cent.
Australia is one of only a handful of countries in the world that will secure the lowest possible tariff rate of 10 per cent including Britain and Brazil.
By contrast, even New Zealand was hit with a surprise increase in the executive order on Friday morning.
The White House has revised its list of tariffs for particular countries and New Zealand has been put on a 15 per cent base rate, up from the original 10 per cent announced earlier.
Australia has escaped a tariff hike to the baseline rate of 10 per cent. Picture: NewsWire / Martin Ollman
Trade Minister hails tariff outcome
Trade Minister Don Farrell celebrated the White House’s decision as a win for Australia but confirmed the government would continue to fight for the removal of all tariffs.
“The White House has confirmed that no country has reciprocal tariffs lower than Australia,” a spokesman said.
“While we remain in the best possible position under the United States’ new tariff regime, we will continue to advocate for the removal of all tariffs in line with our free trade agreement.”
Speaking at a press conference in Adelaide, Mr Farrell said the outcome was “a vindication.”
“What this decision means, in conjunction with all of the other changes to other countries, is that Australian products are now more competitive into the American market,’’ he said.
“This means products like wine, beef, lamb, wheat in a relative sense are cheaper into the United States.
“I think this is a vindication for the Albanese government and particularly the Prime Minister in the call – cool and calm way we have conducted diplomacy with the United States.”
Why Trump spared Australia
In a fact sheet released by the White House outlining the decision, officials confirmed that Mr Trump had signed an Executive Order modifying the reciprocal tariff rates for “certain countries to further address our exploding, annual U.S. goods trade deficits.”
“This decisive action reflects the President’s continued efforts to protect the United States against foreign threats to the national security and economy of the United States by securing fair, balanced, and reciprocal trade relationships to benefit American workers, farmers, and manufacturers and to strengthen the United States’ defence industrial base,’’ the statement says.
“On April 2, President Trump announced an additional 10% tariff on all countries, and for countries with which the United States has large trade deficits, he announced higher additional tariffs individualised to each country, effective April 9. A lot has happened since then. For example:
“Several countries have agreed to, or are on the verge of agreeing to, meaningful trade deals and security agreements with the United States.
Some countries, through negotiations, have offered terms that, in the President’s judgment, do not sufficiently address the national emergency he declared on April 2.
“Some countries have not negotiated at all with the United States. Based on this additional information and recommendations from senior officials, among other things, the President has determined that it is necessary and appropriate to modify the reciprocal tariff rates for certain countries.”
President Trump issued an executive order on Thursday night. Picture: AP Photo/Mark Schiefelbein
Crucially however, the statement includes the following information with regard to Australia:
“Countries not listed in Annex I will be subject to a 10% tariff.”
Australia is not in the Annex I list and as such will retain a 10 per cent tariff – the lowest possible under the new regime.
“President Trump has reset decades of failed trade policy,’’ the White House said.
“Today’s Order underscores President Trump’s commitment to take back America’s economic sovereignty by addressing the many non-reciprocal trade relationships that impact foreign relations, threaten our economic and national security, and disadvantage American workers.
“President Trump’s bold trade strategy has yielded historic agreements with major trading partners, unlocking unprecedented investments in the United States and expanding market access for American goods. These deals strengthen America’s economic and security positions and create opportunities for American workers, farmers, and businesses.
“In a massive deal with the European Union, the EU has agreed to purchase $750 billion in U.S. energy and make new investments of $600 billion in the United States, all by 2028, while accepting a 15% tariff rate.
“Japan has agreed to invest $550 billion in the United States to rebuild and expand core American industries, as well as to further open its own market to U.S. exports, all while paying a baseline 15% tariff rate.
The US has struck deals with nations around the world.
“The United States-United Kingdom trade deal includes billions of dollars of increased market access for American exports.
Additional trade deals with Indonesia, the Philippines, South Korea, Vietnam, and others will protect our industries, open foreign markets, and encourage foreign investment in American industries.
“President Trump is using tariffs as a necessary and powerful tool to put America First after many years of unsustainable trade deficits that threaten our economy and national security.”
Nations strike deals
White House spokeswoman Karoline Leavitt earlier on Friday confirmed that some countries may yet strike a trade agreement before the US deadline.
“We promised that the president would negotiate with countries all around the world to cut tailor-made trade deals depending on those countries’ challenges, how badly they’ve ripped off the United States of America and our manufacturing industry and our workforce in the past,’’ Ms Leavitt said.
“And he has done that. Of our 18 major trading partners, two-thirds of those trading partners have a deal.
“I do know foreign leaders are ringing his phone, realising this deadline is a real thing for them tomorrow and they’re bringing offers to the table.”
Official US data shows that in June 2025 tariff revenues were $US28 billion. That’s $43 billion in US dollars and triple the monthly revenues seen in 2024.
“Those revenues will skyrocket even further starting tomorrow when new reciprocal tariff rates take effect,’’ Ms Leavitt said.
White House press secretary Karoline Leavitt. Picture: AP Photo/Mark Schiefelbein
But Australia doesn’t pay any of the tariffs. Instead, the new levy is paid by US importers when buying Australian exports.
In theory, the tariffs could hurt Australian exports by increasing the price although in practice the trade of beef and aluminium remains strong for now. That could change if the tariff was doubled.
“What we are watching is President Trump rebuilding the greatest economy in the history of the world and turning it – and simultaneously proving the so-called economic experts wrong at every turn,’’ White House spokeswoman Karoline Leavitt said.
US President slams ‘lunatics’
Earlier, Mr Trump defended his use of tariffs during his first term in office lauding the tariffs as bringing in significant revenue for the United States.
“In my first term I was fighting lunatics like you who were trying to do things incorrectly. We did do tariffs in the first term and took in billions of dollars but when Covid came, the last thing I was going to do was hit France and Spain and other countries with tariffs,” Mr Trump said.
When the tariffs were first announced in April, Australia only received the baseline 10 per cent rate, largely because it buys more from the US than it sells.
Some US officials even privately told Australian political leaders that given it was such a good deal that the Prime Minister may not wish to rush a meeting with the US President that could prove volatile and deliver a worse outcome.
But while Australian officials had taken solace from the fact Australia was on the lowest possible tariff, Mr Trump then flagged plans to lift the base rate to “somewhere in the 15 to 20 per cent range”.
Mr Trump spruiked the radical trade policy shift on social media, maintaining the huge new taxes on US importers was making the country “rich.”
“Tariffs are making America GREAT & RICH Again,’’ he wrote.
“They were successfully used against the USA for decades and, coupled with really dumb, pathetic, and crooked politicians, we’re having a devastating impact on the future, and even the survival, of our country.
“Now the tide has completely turned, and America has successfully countered this onslaught of Tariffs used against it.
“ONE YEAR AGO, AMERICA WAS A DEAD COUNTRY, NOW IT IS THE “HOTTEST “COUNTRY ANYWHERE IN THE WORLD. CONGRATULATIONS TO ALL!
Japan, EU and Thailand strike last minute deals
The Trump administration has struck trade agreements with Japan, the European Union, South Korea, Thailand, Pakistan and Cambodia over the last week.
Mr Trump set a 10 per cent universal tariff on all countries on April 2. But he’s also signalled he’s considering a baseline tariff between 15 per cent and 20 per cent for roughly 150 countries, suggesting the initial universal tariff may increase for some or all of those nations.
The new retaliatory tariff regime will come into play on August 1. Australia itself does not apply any tariffs on US imports.
Tariffs an act of economic self-harm
Treasurer Jim Chalmers said the Albanese government had not “heard differently from the 10 per cent baseline that’s been levied on Australia”.
“Obviously, we continue to engage with the Americans on this,” he said.
“These tariff announcements are a moving feast, but our understanding, our expectation is we get the baseline,” Mr Chalmers said.
“We think that the best outcome is zero because these tariffs are an act of economic self-harm.
“We see inflation is going up in the US.”
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