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The Impact on Australia of Trump's 45 per cent Tariff on Chinese Imports
Author(s) -
Dixon Janine
Publication year - 2017
Publication title -
economic papers: a journal of applied economics and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.245
H-Index - 19
eISSN - 1759-3441
pISSN - 0812-0439
DOI - 10.1111/1759-3441.12180
Subject(s) - tariff , china , recession , international trade , international economics , economics , world trade , gross domestic product , product (mathematics) , global recession , geography , economic growth , macroeconomics , geometry , mathematics , archaeology
Should Australia be concerned about the consequences of a possible outbreak of protection between the US and China, two of Australia's largest trading partners? Using the Global Trade Analysis Project model, this paper describes the impact of a 45 per cent tariff imposed by the US on Chinese imports, as flagged by US president‐elect Donald Trump during the election campaign. Gross Domestic Product (GDP) is reduced in both the US and China, with no appreciable revival of US manufacturing. Terms‐of‐trade effects cause only minor macroeconomic impacts on Australia. In itself, a US ‐China tariff would not cause significant global economic damage but could have important demonstration effects. Worldwide tariff hikes would take many economies into recession and reduce world trade volumes by a third.