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Trump “Truths” tariff terms
9 July 2025
Like students awaiting their test scores to be posted, countries around the world are waiting for their letter from the Trump administration stating their tariff rates, subject to further negotiations. So far, the Trump administration has sent tariff letters to 14 countries and posted copies of them on Truth Social. The administration has also moved the start date for tariffs back to 1 August, but when questioned, President Trump said the deadline was, “firm, but not 100% firm.”
While Australia fared better than almost all other countries in the initial wave of “Liberation Day” tariffs, Trump has now threatened a 200% tariff on pharmaceutical imports, one of Australia’s largest exports to the United States. Australia’s Pharmaceutical Benefits Scheme has long been a point of contention in trade negotiations.
But, as USSC Senior Economics Adviser noted in a recent podcast episode, “the US accounts for only around 5% of our [Australia’s] exports.” And yesterday, modelling from the Productivity Commission found the US tariffs may give a small economic boost overall as they expand trade with other countries.
Economists agree that pursuing a new trade deal, rather than imposing retaliatory tariffs, is the better response to new tariffs from the United States. However, in the midst of the AUKUS review and debates about increasing defence spending, Kelly Magsamen, former Chief of Staff to US Secretary of Defense Lloyd Austin, recommended taking a broader approach and linking these US-Australia discussion points on our podcast this week.
Follow the latest tariff and trade developments in USSC’s Economic Security Tracker.
Mari Koeck
Director, Engagement and Impact
Lead image: White House press secretary Karoline Leavitt holds up a copy of a letter to Japan, signed by President Trump, announcing 25% tariffs beginning on 1 August during the daily press briefing.
(Photo by Andrew Harnik for Getty Images)
"It is a Great Honor for me to send you this letter in that it demonstrates the strength and commitment of our Trading Relationship."
President Donald Trump in letters to US trading partners | 7 July 2025
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By the numbers
Stock of two-way Australian and US investment
2001-2024
This is an adapted excerpt of AUSFTA at 20: The past, present and future of the US–Australia trade and investment relationship by Senior Research Associate Tom Barrett.
The Australia–United States Free Trade Agreement (AUSFTA) turns 20 this year. When it came into force in 2005, the world was in the midst of a quite different era of trade policy. The United States was Australia’s third-largest trading partner, globalisation was in its heyday and the appetite for free trade agreements (FTAs) was high.
Today, the world’s two largest economies, the United States and China, have turned away from trade liberalisation. Trade policy has shifted from reducing trade barriers and increasing consumer choice and capital flows to more protectionist policies that preference domestic workers and industry in the name of national security. Under President Donald Trump, the United States is increasingly viewing trade as a zero-sum game of winners and losers, seen primarily through the lens of trade balances, while policy and regulation of trade offer a suite of negotiating tactics.
In the US–Australian economic relationship, investment is a key and growing component. Since 1998, the United States has been the largest source of foreign investment into Australia and is also the largest destination of investment from Australia. In the last two years, for the first time, Australia had more invested in the United States than vice-versa — sitting at A$1.55 trillion versus A$1.35 trillion in 2024.
Future trade cooperation between Australia and the United States is likely to focus on supply chain integration and technology regulation. Increasingly, trade policy is focused on the advanced technology and energy industries and issues like supply chain disruptions – with such cooperation potentially taking the form of sector-specific agreements.
Tom Barrett
Senior Research Associate
Upcoming events
CONFERENCE
Sydney International Strategy Forum 2025: Navigating Disruption
From tariffs to artificial intelligence, one word best sums up 2025: disruption. President Donald Trump’s first 100 days featured norm-breaking policies at breakneck pace, often to be overturned days or weeks later. At the same time, the wars in Ukraine and Gaza have entered new eras with high-level negotiations, on-again off-again fighting and a new world order forming in real time to adapt to a changing strategic landscape. The 2024 trend of turfing incumbents has given way to foreign elections that many perceive to be a referendum on US politics.
What is the future of the United States’ role in the world? How can governments and businesses plan in the midst of constant change? How should allies and partners approach security challenges in 2025 and beyond?
International experts across government, business and research will share their insider insights on the discussions happening in Washington, Tokyo and Canberra and what this means for US allies and partners around the world.
Confirmed speakers include:
- Dr Mira Rapp-Hooper, Former Special Assistant to the US President and former National Security Council Senior Director for East Asia and Oceania
- General David Berger (retired), Former Marine Corps Commandant
- Kori Schake, American Enterprise Institute Director of Foreign and Defence Policy and former National Security Council Director for Defence Strategy
- Lisa Curtis, Center for a New American Security Director of Indo-Pacific Security and former National Security Council Senior Director for South and Central Asia
- Clay Lowery, Institute of International Finance Executive Vice President and former US Treasury Department Assistant Secretary and National Security Council Director for International Finance
- Professor Nobukatsu Kanehara, Sasakawa Peace Foundation Executive Director and former Assistant Chief Cabinet Secretary
17 September 2025
The Four Seasons Hotel, Sydney, Australia
Full price ticket $875
Student ticket $475
PUBLIC FORUM
Can Ukraine survive?
Please join us for a panel discussion featuring USSC Senior Lecturer Dr Gorana Grgić, University of Sydney Senior Lecturer Dr Olga Boichak, and Griffith Asia Institute Associate Professor (Adjunct) Dr Matthew Sussex, moderated by USSC Director of Research Jared Mondschein about the future for Ukraine.
The event will begin with a virtual address by Ukrainian Ambassador to Australia His Excellency Vasyl Myroshnychenko.
7 July 2025
6.00-7.00pmLevel 5 Refectory, Belinda Hutchinson Building (H70), corner of Darlington Ln & Abercrombie St, Darlington, The University of Sydney NSW 2006
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United States Studies Centre
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