The ante was upped recently in the looming trade war between the superpowers. The US administration introduced tariffs on $34 billion worth of Chinese goods being imported into the US. Goods include industrial machinery such as aircraft components, medical devices, vehicles, helicopters, ferries and various other industrial parts. China responded by introducing tariffs on $34 billion worth of US goods being imported into China.
China imports a lot of produce from the US including farm grown goods such as apples, soybeans, avocados, mushrooms, potatoes as well as other goods including alcohol, frozen chicken nuggets, fresh pork, dairy, fish, seafood, pet food and more. Beijing is calling the actions the biggest trade war in economic history. Clearly this means it is going to be more expensive for China to buy produce from the US and similarly it is going to be more expensive for the US to buy certain industrial and medical items from China. The only outcome here is that both countries will start to look towards other countries to source these items at a lower cost.
Australia is considered one of the world’s leading food producers and we also boast an innovative and progressive medical and healthcare industry. We are perfectly positioned to fill many of the gaps being created as a result of this trade war. Australia needs to act as a matter of urgency. Many other countries will be doing the same including some of our Commonwealth colleagues, Canada and New Zealand.
What is important to note here is that doing business with China and the US is no longer the playground of only the large end of town. The internet and simplified trading arrangements now mean that SMEs can export to these markets as well, and the China Australia Free Trade Agreement remains in place to support and grow our export activities.
We are strongly encouraging Australian SMEs interested in doing business with China to act quickly. We are in the midst of a perfect storm. The Chinese already consider authentic Australian products to be of high quality so Australian businesses are already in a very good position to capitialise on the new opportunities being created. There is no better time to look to export to China than now.
David Thomas, Founder and President, The Australia China SME Association
