INTHEBLACK September/October 2025 - Magazine - Page 25
tensions more than others, the speed and severity
of tariff policy change have created shocks that may
reverberate across global markets for some time.
How will CFOs navigate the new terrain?
A TAX BY ANOTHER NAME
A feature of the world economy for centuries,
tariffs are essentially taxes designed to protect local
industry by increasing the prices of goods from other
countries. The rise of globalisation following World
War II saw many of these trade barriers dismantled
with the establishment of the General Agreement
on Tariffs and Trade — a precursor to the World Trade
Organisation (WTO) — in 1947. And, while there have
been some ruptures along the way, world trade has
grown at a remarkable rate.
Data from the WTO shows that over the past
75 years, global merchandise exports rose by an
annual average of 6 per cent. Total exports in 2023
were 250 times the level of 1948 — but that may
be set to change.
“Whatever growth countries like Australia
and New Zealand thought we were going
to get this year now looks much weaker,”
says Kiwibank chief economist Jarrod
Kerr. “There are also direct impacts for
countries like Thailand, Vietnam and
Cambodia, which have quite hefty
tariffs imposed. The indirect impact
of the tariffs is hard to calculate,
but China is one of the biggest
buyers of Asian goods and
services, so if China slows
down, Asia slows down.”
While Singapore is subject
to the 10 per cent baseline
tariff, there are exceptions
for products such as
pharmaceuticals,
semiconductors and
certain chemicals
and minerals.
GLOBAL GAME CHANGERS intheblack.cpaaustralia.com.au 25
