Australia records rare US trade surplus on tariff day

Australia has recorded a rare trade surplus with the United States for the second consecutive month, on the same day as President Donald Trump announced 10 per cent tariffs on Australian exports.

The federal government had pointed to the nation's historic trade deficit with the US as a reason why it should be spared from Mr Trump's trade sanctions.

But February's $1.1 billion surplus reported by the Australian Bureau of Statistics on Thursday, following a $1.7 billion surplus in January, undermines those claims.

It is unlikely a continuation to Australia's historical deficit would have made a difference, given no countries were spared a minimum 10 per cent tariff, trade deficit or no.

The surplus was driven by a surge in non-monetary gold exports, as importers looked to stockpile gold holdings ahead of the tariffs, said AMP economist My Bui.

Australia has recorded consistent trade deficits with the US since records began in the 1980s and that is expected to resume to resume as the temporary export jump unwinds.

"It's nothing structural in terms of trade with the US," Ms Bui told AAP.

"In terms of the overall trade balance, the surplus has narrowed from a peak of about $15 billion per month in 2022 to about $5 billion per month."

Ms Bui expects it to keep narrowing as geopolitical risks increase and Australian consumer demand picks up, lifting imports.

Tariffs were singled out as a risk to Australia's financial stability by the Reserve Bank in its bi-annual review of Australia's financial health, but not because of their direct impact to Australian industry.

Ongoing uncertainty surrounding the tariffs could have a "chilling effect" on business investment and household spending, suppressing economic growth.

That could lead to share price volatility, given already high risk premiums.

Australia is also vulnerable to turbulence in China's financial system, the RBA found, given the further 34 per cent tariffs imposed by Mr Trump on Australia's largest trading partner.

Treasurer Jim Chalmers ordered Treasury to conduct new modelling on the impact of the tariffs on Australia and promised to release it publicly once complete.

"We know that we won't be immune from these tariffs, even though the US is only about five per cent of our export markets," he told reporters in Adelaide.

Ms Bui estimated the direct hit to the Australian economy from the tariffs would be about 0.2 per cent of GDP, although certain industries like steel, pharmaceuticals and beef would feel the pain more acutely.

Following the tariffs announcement, the rates market slashed the odds for a rate cut at the RBA's next meeting in May, now predicting an 85 per cent chance of a 25-basis point cut.

The reason: the tariffs went far beyond what the market had been expecting, said IG market analyst Tony Sycamore.

"Inflation is rapidly becoming yesterday's problem," he said.

"The RBA are expected to shift their attention to shoring up growth."

A further 50 basis points of cuts are priced in by November, which would leave the cash rate at 3.35 per cent by year's end.