By Nick GourleyThe price of diapers has gone up by $200 since July, but that’s hardly enough to make up for the loss of Australian dollars in trade.
It has, however, made a significant dent in the trade deficit with the US, where the trade surplus widened by $16 billion last year.
The US was already the biggest source of Australian exports, but a trade war with the world’s second-largest economy has made the trade gap more than $2 trillion, with exports to the US in the past 12 months up by almost $4 billion.
This month, the US imposed new tariffs on $US1 billion worth of Australian imports, including diapers, and imposed new taxes on $1.8 billion worth, including milk and dairy products.
Australia is now also facing a $US4.6 billion trade deficit due to the new tariffs, with the biggest burden falling on products that were previously imported.
Australian exports to Canada and Mexico have also risen, while trade between the two countries has increased by about $US500 million since June.
In the US market, Australian producers have been hit hardest.
They have been forced to cut costs, while the US has been forced into an unprecedented bout of tax cuts to encourage exports to other countries.
On Tuesday, US President Donald Trump signed a bill that, if passed, would extend the US’s trade deficit in goods to $US10 billion in 2022, and $US7.5 billion in 2025.
However, the trade agreement will not include a number of important measures, including a tax on foreign companies that move their operations to the United States.
Mr Trump has been accused of “selling out” the US economy by signing the trade deal without the agreement’s passage.
His critics say the deal will hurt American workers, which are expected to lose their jobs as a result of the trade war.
Some economists have warned that the trade imbalance could cause a “hard landing” for the US financial system, which is already reeling from the loss in value of the dollar.
“The trade gap is going to be a problem for the rest of the world in the future,” Mr Gourly said.
More: “This is a massive and significant trade imbalance that is going into the future, because the US is going out of business in the US and is going away from the dollar as a reserve currency.”
The trade deficit is now a huge burden for Australia.
It is also a huge liability for the American economy.
Despite the trade battle with the rest, the Australian dollar has strengthened against other major currencies, rising more than 3 per cent since June, according to Reuters data.
And while the trade balance is a problem, the country is also dealing with a trade deficit of about $3 billion.
The US has also reduced imports of products from Australia, including some items that are sold to the rest.
For example, US beef imports fell by more than half in the year to June, to $3.3 billion, from $3 million in the same period last year, according the US Department of Agriculture.
But, as with many other countries, Australia is trying to avoid a trade crash by reducing imports and reducing tariffs.
What does this trade deficit mean for Australians?
It may make sense to eat your rice with a spoon.
Topics:economics-and-finance,business-economics,federal-government,government-and/or-politics,government—politics,united-statesFirst posted October 09, 2019 21:58:47Contact Nick GournleyMore stories from New South Wales