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The art of the trade war
9 April 2025
As the fallout from President Trump’s “Liberation Day” continues, some global markets have shown signs of stabilisation while other areas of competition heat up. Japan’s Nikkei market index rose sharply yesterday after it was announced that Japan would have trade negotiations with US Treasury Secretary Scott Bessent. However, China and the United States have both escalated their tariff threats, with China announcing a 34% tariff on US goods after they were hit with an additional 34% in tariffs last week (bringing their total tariffs from the United States to 54%). In response to China, President Trump said the United States would impose an additional 50% tariff if China did not back down. China vows not to. Last week China announced an antitrust investigation into DuPont and has threatened to do the same to Google and other major US firms.
Australia has not yet secured any exemptions to the new tariffs, in spite of its long-standing trade deficit with the United States and existing free trade agreement (though Australia has recorded a shock trade surplus with the United States in the first months of this year). However, while Prime Minister Anthony Albanese said the tariffs were “not the act of a friend,” he also announced that Australia would not retaliate. After a sharp drop following the tariff announcement, Australian markets were up slightly yesterday and the value of the Australian dollar has recovered some of its value. So far, it appears that US trading partners who are willing to negotiate are being rewarded with more stable markets.
As major US businesses have railed against the Trump tariffs, some Republican members of Congress are testing the waters of trying to wrest control of tariffs from the executive branch back to the legislative branch. Republicans in both the House and the Senate have put forward bills that would give Congress more power in relation to tariffs, but the White House said Trump would veto any such bill.
Mari Koeck
Director, Engagement and Impact
Image: Traders work on the floor of the New York Stock Exchange on 7 April 2025
(Photo by Timothy A. Clary/AFP via Getty Images)
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President Donald Trump on X | 8 April 2025
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Upcoming event
WEBINAR
Information session | Visiting fellowships for the JADE program—Japan-Australia Dialogue and Exchange for the Next Generation
The Japan Foundation and United States Studies Centre run two parallel, interrelated Australia-Japan fellowship programs to strengthen ties between Australian and Japanese policy experts and research institutes—known as the Japan-Australia Dialogue and Exchange for the Next Generation (JADE).
The fellowships are designed to cultivate the next generation of policy-savvy Japan experts based in Australia and Australia experts based in Japan, fostering deeper mutual understanding and collaboration.
To learn more about the opportunity and ask any questions, please join us for this upcoming information session.
24 April 2025
4:00-5:00pm AESTZoom
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