A leading Australian economist has issued a stark warning that the newly inked trade deal between the United States and the United Kingdom could have dire consequences for Australia's hopes of securing tariff relief on steel and aluminium exports.
The agreement, heralded by US President Donald Trump as a “historic deal,” is being widely criticised as favouring American interests at the expense of its allies. Under the new arrangement, tariffs on British steel, aluminium, and aircraft engine exports to the US will drop to zero, while levies on up to 100,000 British-made cars exported to the US will be slashed from 27.5 per cent to 10 per cent.
Despite the apparent concessions, experts argue the deal is a significant step backward for Britain and serves as a warning to other US trading partners. US Commerce Secretary Howard Lutnick reinforced that perspective, boasting that the remaining 10 per cent tariff on British cars would still generate $6 billion annually for the American economy.
“The US/UK trade deal is a bit of a joke and not a good sign for Australia,” wrote AMP Chief Economist Shane Oliver in a note circulated on Saturday morning. He added that the agreement showed little incentive to capitulate to the Trump administration's trade demands, indicating Australia’s own negotiations could face similar hurdles.
Oliver’s warning comes amid Australia’s ongoing efforts to secure exemptions from steep US tariffs imposed during President Trump’s ‘Liberation Day’ trade campaign, which have weighed heavily on Australian metal exports.
With the US continuing to flex its economic muscle and prioritise domestic revenue, Australia’s hopes for meaningful trade concessions under a Trump-led administration appear increasingly uncertain.
