CHINESE goods are increasingly being exported to Australia and other economies this year even as they have been deterred from the US market by higher tariffs.
That was the verdict of an economic update from one of Australia’s ‘Big Four’ banks Westpac notes.
According to the update, US tariffs have “not significantly altered global imbalances”, but Chinese exports to the US had dropped as the Asian giant redirected trade to other economies, such as other Asian countries, the European Union and Australia.
“Recent US–China negotiations have eased tariff tensions, but the effective US tariff on Chinese goods remains close to 50%, up from around 20% at the start of the year,” Westpac stated.
“Tariffs are supporting inflationary pressures in the US and limiting the Federal Reserve’s ability to ease policy.”
AI investment was noted as helping drive growth in the US economy, offsetting weak consumer confidence.
For Australia, the 2025 third quarter was reported to have delivered “a significant upside surprise” in terms of CPI, but inflation was expected to ease from mid-2026.
“We expect that the RBA will delay rate cuts until May 2026,” the bank stated.
“Australia’s economic momentum is shifting from public to private sector growth, with household spending recovery looking more assured, though labour market conditions are gradually softening.”
As has been widely reported, including in DCN, Australian exports to the US have increased following new tariffs, but overall exports continue to face “structural headwinds”.
Gold and rural goods exports are reported to be rising, while non-rural goods continue to decline.
“Notably, Australian beef exports reached record highs due to tariff advantages, but this edge is fading as US and Chinese policies shift and supply constraints begin to take effect,” Westpac stated.
Tariffs have been a key theme of 2025, notably in early April when US President Donald Trump announced the so-called 'Liberation Day' import duties.