As the United States implements its new protectionist trade policies and China races to offset export pain with internal stimulus, the global trade map is shifting fast – and businesses are bracing for the impacts on Australia.
But an expert on the markets says “it’s not as doom and gloom as the papers make out” when it comes to the tariffs. Peter Dragicevich, Currency Strategist (APAC) at Corpay, notes that, while “there are headwinds, there are offsets, too.”
Peter acknowledges uncertainty still looms large, but notes conditions on the home front are gradually improving, with interest rates easing and targeted federal support available for trade-exposed sectors.
For businesses navigating international trade, these shifts in decades-long norms may require new approaches. But they also present opportunities – for those willing to grab them.
Tariffs on Australian exports: The pros and cons
While the imposition of a 10% tariff on Australian exports does add pressure for some sectors – notably beef, gold, and pharmaceuticals – the broader picture is more muted. Even for affected sectors, it’s likely exporters will be able to find new markets, says Peter.
“If there’s less demand in the US because of high prices, those products could be redirected into other countries where the supply would be absorbed,” notes Peter.
At the same time, China – Australia’s largest trading partner, making up 32% of our total exports – is investing in its own economy, ramping up construction and infrastructure development. Peter says that could be a boon for Australian commodities like iron ore, Liquefied Natural Gas (LNG) and coal.
“If the Chinese authorities are trying to stimulate their domestic economy to offset the tariff pain, that’s actually a net offset for Australia,” Peter says.
Australian dollar forecast 2025: Will the AUD strengthen?
Few areas of the economy reflect global uncertainty more directly than the dollar. In 2025, the Australian Dollar (AUD) has already swung widely in response to global disruption – including its largest single-day drop in 15 years.
“The Aussie’s traded in a very wide range this year, and that’s a function of what’s happening offshore, not domestically” says Peter. He notes the volatility is unlikely to fade in the short term, with markets continuing to react sharply to trade deal announcements and political rhetoric.
“We will see more bursts of volatility coming through over the next couple of quarters, particularly before more definitive trade deals are struck,” Peter explains. “You’re one tweet away from things just kind of unwinding very sharply.”
Still, the broader trajectory could work in Australia’s favour. As China and Europe look to stimulate growth internally and the US economy slows, the Australian dollar may strengthen. Peter expects the AUD to trend upwards towards the high 60s or even low 70s against the US dollar over the next 12–24 months.
He also points out that, historically, the AUD is still below its long-term norm. “The average for the Aussie since it floated in the 1980s is 75c. Right now we’re still below where purchasing power parity suggests it should be,” says Peter. “From a business perspective, it’s about hedging your risk and hedging your exposure.”
Risk, resilience and preparing for global trade uncertainty
For Australian exporters, the next year won’t be without challenges – but those that act decisively will be best placed to thrive.
“There’s a lot of push-pull factors people need to consider, but overall, the main economic hit to Australia won’t be overly large,” Peter concludes.
Combined with lower interest rates and zero-interest government loan facilities for affected exporters, there’s growing potential for cautious optimism. But seizing that opportunity requires more than waiting for conditions to improve – it means taking action now to manage exposure and maintain control.
In this environment, Trade Finance isn’t just a safeguard – it’s a smart strategy. It empowers businesses to reduce uncertainty, unlock working capital, and move forward with confidence.
Whether it’s Trade Finance, cross-border payments in collaboration with Corpay, or our market-leading supply chain technology, Octet gives Australian businesses the tools and support to trade smarter – whatever the economic outlook. Talk to us today about how we can help your business.
Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.
