In a notable shift driven by geopolitical tensions and trade disputes, Australian businesses are redirecting their trade focus from China to the United States, according to a report in the Herald Sun, citing a survey conducted by The Australian Chamber of Commerce and Industry (ACCI).
For the first time in the history of the survey, the US has emerged as the leading market for Australian traders.
This shift away from China follows a prolonged period of strained relations between the two nations, marked by heavy tariffs and restrictions imposed by China on various Australian imports, including barley, wine, coal, lobster and beef.
Lesson learned in diversification
The ACCI, in collaboration with the Australian Centre for International Trade and Investment, conducted the survey involving 154 businesses of varying sizes and across diverse sectors from all Australian states and territories.
Geopolitical tensions and the imperative need for market diversification were prominent concerns among Australian respondents.
The survey results revealed that 50% of businesses identified the US as Australia’s primary market, with China and Singapore trailing closely behind.
New Zealand secured the fourth position, while the United Arab Emirates surged to fifth place.
ACCI chief executive officer Andrew McKellar emphasised the importance of diversification in light of recent trade disruptions, saying “China has consistently topped the list in previous ACCI National Trade Surveys.
“However, the recent experiences have underscored the risks of over-reliance on a single market. Diversification of markets is crucial.”
China is still the biggest export market
Despite being the top trading partner in the survey, the US ranks fifth in terms of Australia’s export market, with China continuing to dominate, having purchased $16.5 billion worth of Australian goods in August.
Japan stood as the second-largest market with $6.9 billion in imports, while the US lagged behind at $1.93 billion.
The month of August reported a trade surplus of $9.64 billion, driven by $53.55 billion in exports against $46.23 billion in imports.
Tips to navigate evolving landscape
This pivot towards the US coincides with Prime Minister Anthony Albanese’s upcoming official visit, during which he will engage in discussions with US President Joe Biden on business opportunities, regional security, AUKUS and scientific and technological cooperation.
With seven in ten respondents expressing concerns about the need to diversify markets, ACCI has put forward five recommendations for businesses to navigate the evolving trade landscape.
These recommendations encompass enhancing domestic productivity, modernising trade systems, reducing bureaucracy, fostering government partnerships, addressing trade barriers and seizing emerging opportunities.
Source : ProActive