One year into Donald Trump's second term, Australia has defied dire predictions of economic damage from US tariffs. While experts initially forecast up to $27bn in losses, the reality has been more nuanced, with Australian exports to the US actually doubling in some sectors.
The Commonwealth Bank's chief economist, Luke Yeaman, described a 'new economic era' with different rules, moving away from globalisation towards protectionism and self-sufficiency. However, he noted that the world economy has not collapsed as feared, calling it 'a bit of a puzzle' why tariffs have not hit harder.
Australian goods exports to the US surged from $16.8bn in the first 10 months of 2024 to $33.2bn in the same period of 2025, driven by beef and gold sales. Beef exports rose from under $3bn to $4.2bn, aided by US drought and Trump's eventual removal of tariffs on agricultural products in November. Gold exports skyrocketed from $1.2bn to $14.6bn as geopolitical fears boosted prices.
Richard Yetsenga, chief economist at ANZ, argued that the key analytical failure was not recognising that tariffs redistributed trade rather than destroyed demand. Countries like Europe and Japan avoided full retaliation, preventing a global trade war. Despite ongoing risks such as an AI investment bubble and tensions in the South China Sea, Australia has so far emerged as a relative winner in this new economic landscape.
