The Trump Administration has proposed a 10% tariff on all imports, a whopping 60% on Chinese imports, and 25% on Canada and Mexico.
Our adjunct, Dr David Vanzetti, has crunched the numbers using the GTAP CGE data model to analyse the implications of the Trump Administration's proposed tariffs, and the best response to them. Essentially, while Trump’s tariff plans would disrupt trade, retaliating would make all countries worse off. Australia should not retaliate.
The key findings from the analysis include:
✅ U.S. annual GDP would decline by only 0.6% despite major trade shifts.
✅ Retaliatory tariffs would make everyone worse off, but with minimal additional harm to the U.S. (GDP loss rise to 0.8%).
✅ Australian grain and livestock producers may benefit from a collapse in US-China bilateral trade.
Want to hear more? Dr. Vanzetti was interviewed about these findings by the ABC's Queensland County Hour radio show: Crunching the numbers on Trump's tariffs finds retaliation is a bad idea - ABC listen
His paper was presented at the 69th Australasian Agricultural and Resource Economics Society Conference in Brisbane (11-14th Feb, 2025). For full details, download a copy here:
The Australasian Agricultural and Resource Economics Society published this Media Release in response to the presentation:
More information
David Vanzetti at david.vanzetti@uwa.edu.au
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