The U.S. has announced a new round of tariffs, following delays for countries to negotiate trade deals.
Some countries have now been hit with higher tariffs that will come into effect on 7 August.
Australian products are still subject to a “baseline” tariff of 10%, which has been in place since earlier this year.
Tariffs
A tariff is a tax placed on imports. It’s applied to foreign-made goods brought into another country and paid by the importer.
For example, an Australian company charges a U.S. business $10 for a product it exports.
The American importer pays a 10% tariff to U.S. customs officials, meaning it ends up paying $11 for the Australian product.
If no tariff applied, the U.S. business would pay $10.
'Liberation Day'
Trump’s tariffs can be sorted into two central categories: countries and goods.
On 1 April, he announced tariffs on almost every country in the world. He imposed a flat 10% tariff on all products, which has been in effect since 5 April.
Some countries had additional rates imposed on them. Australia wasn’t included in the higher rates of tariffs.
Since then, Trump has placed tariffs on specific goods, such as steel, aluminium, and copper.
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Higher tariff rates were due to come into effect last month.
Trump announced a pause to allow more countries to negotiate trade deals.
The UK struck a deal to reduce its initial tariff rate from 25% to 10%.
The European Union, Japan, and South Korea all negotiated deals to get a 15% rate. All were originally subject to higher tariffs.
Today's rates
The White House has now confirmed the new tariff rates for a range of different countries.
Cambodia’s rate has dropped from 49% to 19%, while New Zealand increased from 10% to 15%.
The U.S. has hit Canada with an increase of 25% to 35%, citing “continued inaction and retaliation” of its northern neighbour.
Trump said Canada’s plans to recognise the state of Palestine at a United Nations vote in September would make trade talks “very hard”.
Australia
Australia has not received a higher tariff, unlike many other countries.
A spokesperson for Trade Minister Don Farrell said: “We will continue to advocate for the removal of all tariffs in line with our free trade agreement.”
The U.S. and Australia signed a free trade agreement in 2005, which means until this year most products exchanged between the countries did not have tariffs.
