Protectionism in America: Effects on Australian Businesses

Running Head: PROTECTIONSIM IN AMERICA
PROTECTIONSIM IN AMERICA
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PROTECTIONSIM IN AMERICA 2
The president of the United States of America, President Donald Trump in the recent past
gave a proposal that he will implement a 25% rate of tariffs on the importation of steel and also a
ten per cent on the transportation of aluminium in response to the recommendations on the
matters of the national security. Steel and aluminium that are exported to the USA from Australia
will be exempted from this proposed tariff. The main factor in this decision was the strategic
alliance made by Australia to the USA. This proposal gives a direct signal that if any additional
taxes are initiated soon on other industries, the measures will have a lesser impact on the
Australian exports to the United States.
The tariffs, on the other hand, reveal a higher vitality on the economies as far as the
global trade policy is concerned. The multinational companies in Australia have the right to
assess their chains of supply and hence come up with the developing strategies for them to be
sure that they will be perfect in creating or even reacting to the actions of US adding to the
retaliatory measures that are meant for the non-exempted countries (Schott, 2014).
This protectionist action was the first taken by the USA after her withdrawal from the
transpacific partnership. There will be the yielding of short-term benefits to the economy of the
United States, but the protectionist trading system will have a negative impact on the economic
growth and trade around the globe. To respond to the protectionist move, Canada and Europe
decided to hit back with the same measures on the significant imports to the USA. Canada has
however been excepted from these measures till the next negotiations on NAFTA agreements
take place (Jackson, 2015).

PROTECTIONSIM IN AMERICA 3
The European Commission declared that it would respond firmly and join the other
countries and unions in a challenge at the world trade organization. There has been a 25% tariff
already put by the European Union on goods worth USD 3.5 billion that would come from the
USA. Australia has however said that it will not get involved in taking action against the WTO
(Nye , 2016).
Effects to the Australian businesses
As the concerns about the Australian industry go on, the USA president Donald Trump
insisted that the defense allies will be exempt from these measures. Thus, behind Mexico and
Canada’s stand, the Australia steel and the aluminium exports are likely to be excluded from the
proposed tariffs (Nye , 2016). The latter decision comes after the consideration of the longstanding
relationship between the countries. The move recommended by the USA president prosed that if
additional tariffs would be imposed on other industries, then such measures will have no impact
to the Australian exports to the USA, with the major commodities that come from Australia
being beef, aircraft and spacecraft parts and pharmaceutical products.