Australia’s Exports to Dramatically Fall

Australia’s resource-rich economy is running into a new problem: Washington’s unpredictable tariffs. Fresh projections from the Department of Industry, Science and Resources show export earnings sliding from last year’s AU$415 billion to just AU$352 billion by 2026-27. The report mentions softer commodity prices and rising global supply, but it also notes that companies have been pausing orders while they wait for the next tariff announcements.

Iron ore is forecast to give up nearly one-sixth of its earnings (AU$116 billion this financial year to AU$97 billion within two years). Liquefied natural gas may suffer a similar fall. Just these two exports account for half of the projected revenue shortfall.

The department’s economists point to a sharp pickup in order cancellations immediately after Washington’s latest array of trade measures. Since April, the United States has made blanket levies as high as 50% on imports of steel, aluminium, and manufactured goods from Australia and other allies.

Financial markets have been a record keeper of these announcements. In late February the Australian dollar had its steepest one-day fall of the year at roughly 0.9% after President Trump confirmed the first wave of tariffs. Further back-and-forth tariff announcements could worsen the pain.

Gold Exports Prevail

Not every sector is shrinking. Gold is set to become the nation’s third-largest export in 2025-26 (hopefully we are keeping as much as we can), with sales expected to hit AU$56 billion as investors stock up on safe-haven assets amid tariff shocks.

Treasury officials say they will press the US for carve-outs like the exemptions negotiated in 2018 when Australia dodged Section 232 steel and aluminium tariffs. Yet Australia’s diplomatic leverage is weaker this time around, with relations still cooling after a series of defence-spending disagreements. Meanwhile, industry groups are urging miners to diversify customer bases and hedge currency exposure before the next tariff headline.