THE “UNPREDICTABLE nature” of US import tariff announcements has caused “significant volatility” in global trade flows, Westpac senior economist Mantas Vanagas says.
Mr Vanagas has just provided an update on Australia’s accounts for June, with higher coal exports and a drop back in total imports supporting a recovery in the goods trade surplus.
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“Following a more stable period in 2024, when the monthly trade surplus hovered around $5-6bn, in 2025 Australia’s goods trade experienced marked fluctuations,” Mr Vanagas wrote.
“The latest two months served as a prime example of this trend. In May, the trade surplus narrowed to just $1.6bn (revised down from the original $2.2bn), marking the lowest level in seven years.”
However, June’s data did show an upside, with “a sharp recovery” to $5.4bn, almost matching the 2024 average.
Exports were described as the primary driver of the improvement in June, rising by 6.0% a month, the steepest since 2022.
Rural goods exports were described as flat, despite a 5.1% a month increase in meat exports, which was offset by a comparable decline in other rural goods.
“Most of the action was in the three major commodity categories. After a couple of weak months, coal exports surged by over 17% a month,” Mr Vanagas wrote.
“Iron ore exports also strengthened, but LNG outflows declined”.
Mr Vanagas reported that the figures for June depicted “a stable goods trade surplus, punctuated by a few weaker months” ahead of the third quarter likely to show the impact of Trumpian tariffs.
“The Q3 data is likely to bring further volatility, especially given the recent sharp changes in US tariffs taking affect today,” he wrote.
“Although Australia remains on the lowest 10% tariff, it is unlikely to be immune to the effect of shifting trade patterns globally.
“But looking beyond that volatility, we anticipate that the goods trade balance trend is more likely to remain downwards, particularly if the AUD continues to strengthen, as we expect.”