👉 Background: During Donald Trump’s presidential campaign, he committed to an 'America First' policy. As a result, he announced plans for a 25% tariff on Canadian and Mexican goods (which was temporarily paused), and a 10% tariff on Chinese goods, which has already started a trade war.

‍👉 What happened: Now, Donald Trump has warned of a new 25% tariff on any steel and aluminium that comes into the US. It's all part of his plan to grow the mining economy in the US and make mining imports more expensive from foreign countries, including Australia.

‍👉 What else: In the past, Australia got a get-out-of-tariff-jail-free card from the US. But this time, Trump’s saying no exceptions. So, Albo gave Trump a call and begged for an exemption which is supposedly ‘under consideration’.

What's the key learning?

💡There is an age-old debate between whether free trade or protectionism are better for a country's prosperity. Free trade means countries remove barriers like tariffs, which makes it easier to buy and sell goods across borders. Protectionism, on the other hand, is when a country places trade barriers on imports to protect its local industries from foreign competition.

💡Countries over the past 20 years that consistently created free trade policies grew faster and improved their productivity more than those that didn't participate in free trade.

💡 But if the world was to turn back to protectionism - Australia would be vulnerable. We exported $1 billion in aluminium, iron and steel to the US in 2023. So if tariffs are introduced in the US, the Australian government will be hoping this doesn't create a precedent for other countries as well.