The Trump administration’s foreshadowed plans for a new tax on imports would hit a range of Australian companies including those selling wine, medical supplies, software and clothing, according to analysis by Citi.
The border tax, said to be 20%, would cause major changes in trade flows across the world, especially for those countries where the US is a key market.
However, Australia buys more from the US than it sells back. In 2015, Australia’s exports were $14.2 billion, while imports from the US were $33 billion.
According to analysis at Citi, many of the larger Australian companies which have expanded to the US have significant local production which would cushion them from any new border tax.
“With significant production in the US, a border tax should be less impactful, and earnings could also benefit from any lowering of US corporate tax rates in general, a stronger US economy, and a stronger US dollar increasing the AUD value of their earnings,” says Citi analyst Tony Brennan.
Some of these bigger companies include Amcor, Orora, James Hardie , Fletcher Building, Incitec Pivot, Orica, BHP Billiton, Rio Tinto, Bluescope Steel, Sims Metal, Sonic Healthcare, Computershare, QBE Insurance, Macquarie Group, Westfield, LendLease, Brambles, ALS, Transurban, WorleyParsons, News Corporation, Aristocrat Leisure and Ardent Leisure.
And those which get most of their US sales sending goods to the US include medtechs CSL, ResMed, Ansell, Cochlear, plus home appliance group Fisher & Paykel, Treasury Wine Estates, agricultural chemical company Nufarm, construction software supplier Aconex, four-wheel drive accessory maker ARB and surf clothing retailer Billabong.
Most mining companies sell to China, Australia’s biggest export destination, or other Asia countries such as Japan and Korea. The goods created from these raw materials are then exported to the US.
Here are the Australian sectors exposed to the US: