Chart of the Month – US Imports

A key pillar of Donald Trump’s “America First” campaign were tariffs aimed at boosting the domestic job prospects and rejuvenating its manufacturing base. With mooted tariffs of 20% on all goods, and up to 60% on Chinese goods, we look at which countries and industries that are most exposed.??

In the crosshairs are China (13% of imports to the US) and Mexico (16%), both have significant exports to the US and are skewed to the key sectors that Trump is targeting (Machinery, Consumer Goods, Vehicles).? Half of Chinese imports are Machinery and Equipment, comprised of Electric Equipment and TVs, as well as Vehicles and Vehicle Parts.?

Overall, we expect tariffs will have an inflationary effect in the US, as cheaper imports are either made more expensive by the tax or replaced by more expensive domestic products. Forecasters estimate that a 10% tariff could increase US inflation by about 0.8% in 2025, placing doubts on the predicted interest rate cuts by the US Fed.??

To read about the further economic implications of these tariffs and specifically what this means for Australia, please find the full article on our website by clicking here.