Despite negotiations earlier in the year delaying expected tariffs, the US Trump Administration has followed through on its threats to impose additional import taxes on Canada, Mexico, and China – due to take effect in March.
China was already subject to a 10% tariff, which will be increased to 20%, while Mexico and Canada will be hit with 25% import taxes, although energy resources from Canada are partially exempt with a 10% levy.
Thus far, Australia has avoided threats of tariffs on its imports to the US, with many analysts pointing to our trade surplus with America as the core reason we’ve avoided extra taxes so far.
Low risk of future tariffs
A new report from Australian bank Rabobank’s research division has identified Australia as one of the US trade partners with the lowest risk of being affected by future tariffs, due to the balance between the two countries being in the US’s favour.
The report identifies nine ‘waves’ of trade policies and tariffs likely to be (or have already been) imposed under the new US administration, which could effect industries ranging from coffee and cut flower imports to steel and aluminium.
Their effects are already starting to be felt on “foreign shores”, according to report co-author, RaboResearch general manager Australia & New Zealand Stefan Vogel, and their potential impacts on global food and agribusiness range from minor ripple effects to heavy disruptions.
“It has been a stormy start to the year with many waves and more to be expected later in 2025,” Vogel said.
“President Trump has stated many times that he is especially targeting countries with whom the US holds a heavy trade deficit.
“China and Mexico are top on that list, but Canada also makes the list of the top 10 countries with whom the US has a trade deficit.
“EU countries also make up a large share as do various Asian economies.”
Nine waves of tariffs
The report details the ‘nine waves’ of potential tariffs as such:
- Colombia – significant impacts for US imports of cut flowers and coffee;
- Mexico and Canada – 25 per cent tariffs on most goods, along with a 10 per cent tariff on Canadian energy imports. Could heavily impact energy sector and agricultural supply in North America, increasing costs;
- China – a 10 per cent tariff imposed on Chinese goods. Retaliatory measures from China have been put in place, but do not yet affect major US agricultural exports like soybeans;
- Ukraine – to ensure continued financial and military support, a US-Ukraine deal that would give the US access to Ukraine’s vast supplies of rare earths including lithium is in the final stages;
- Houthis (Red Sea/Suez Canal) – recent US pressure on the Houthi rebels and the Hamas-Israel ceasefire agreement have seen the Houthis announce they would cease attacks on most vessels in the canal;
- Panama Canal – President Trump has expressed a desire to take back control of the canal, a crucial shipping route for US trade. This could have significant implications for global maritime agricultural trade;
- Europe – the EU may face US tariffs on products, including machinery and pharmaceuticals as well as spirits, wine and agricultural goods;
- US Agency for Development (USAID) – funding cuts have impacts for agriculture, with the agency, which administers foreign aid and development assistance, having purchased USD 2 billion in US-grown crops in 2024 and
- Steel and aluminium tariffs – increased US tariffs on steel and aluminium may disrupt supply and increase packaging costs for food and beverage manufacturers.