Will the Australian economy benefit from President Trump's protectionist policies?

Running Head: ECONOMICS 1
ECONOMICS
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ECONOMICS 2
Will the Australian economy benefit from President Trump's protectionist policies?
Introduction
The economy of Australia comprises of a vast mixed-market economy. It is majorly
dominated by the service sector which accounts for more than 60 percent of the gross domestic
product and employs more than 79 percent of the total labor force of Australia (Bryan &
Rafferty, 2014). Australia is among the richest nations in the region of Asia-Pacific. It highly
embraces freedom in its economic activities. It has almost open up all its industries to foreign
competition and it has also improved its education system. This has enabled the economy of
Australia to improve its efficiency due to foreign competition and readily available highly skilled
labor force. According to the 2018 index, Australia has been positioned number 5 in terms of
economic freedom having a score of 80.9. It has also been doing well in terms of economic
performance currently having a growth rate of 2.5 percent. Its gross domestic product which
measures it economic performance stands at $1.69 trillion. Australia has been ranked position 4
out of the 43 nations in the Asia-Pacific region. Its economic performance score is above the set
target averages both at the regional and world at large. Australia’s better economic performance
is anticipated to persist in future.
Analysis
Globalization is currently evolving at a fast pace in the today’s world of business. Many
nations have realized the benefits associated with international trade and have assisted their
individual businesses to venture into it to foster their economic growth (Giddens, 2018).
However this comes at a cost as some nations may impose trade barriers in their economy under
the claim of protecting their national security as stated by the World Trade Organization.

ECONOMICS 3
Australia embraces international trade and this has seen it improve its exports by a great margin
in the last 5 years. Australian exports contribute more than 15 percent of the total gross domestic
product. This is an estimate of more than $210 billion of the total gross domestic product of
Australia (Brewewer, 2017). Australia exports goods and services which it has comparative
advantage in terms of production compared to its trading partners. Major products traded by
Australia in the international trade include sheep and goat meat, iron core, synthetic corundum,
coal, wool, gold, meslin, petroleum gases and bovine meat. Most of these Australian export
products are agricultural commodities and minerals. Some of the major trading partners of
Australia are shown below and their respective export percentage contribution to Australia:
Country Export Contribution Percentage to Australia
China 31.6%
Japan 13.9%
European Union 7.5%
South Korea 6.7%
United States 4.6%
Others 35.6%
The trade protectionist policies implemented by President Donald Trump will benefit
Australia to a greater extent. The implemented trade protectionist policies resulted to a scenario
which economists view as a trade war between the targeted nations and the United States. Some
of the major targeted nations include China, Canada and the European Union (Ikenberry, 2017).
President Donald Trump implemented a policy which aimed at imposing tariffs amounting to 25
percent and 10 percent on steel and aluminum respectively. This targeted the three major
importers of these products to the United States who include China, Canada and European