As global trade faces disruptions from new U.S. tariffs, Australia has a unique opportunity to boost its trade strategy by reducing its own trade barriers, according to a top Australian economist.

Warwick McKibbin, Director of the Center for Applied Macroeconomic Analysis at the Australian National University, said Monday that Australia is “probably in the best position” globally to navigate the economic impact of President Donald Trump’s latest round of tariffs, expected from August 1.

Speaking at the Australian Conference of Economists, McKibbin urged policymakers to seize the moment to strengthen ties with new trade partners. “We should be doing trade negotiations. We should be lowering barriers which make trade harder,” he said.

Following the first wave of tariffs in April, Australia reopened stalled negotiations with the European Union for a free trade agreement. Talks had broken down in 2023 over EU access for Australian agricultural goods.

Trade Minister Don Farrell echoed the economist’s views last month, expressing hope that like-minded countries would forge new agreements in support of free and fair trade, regardless of the U.S. direction.

Australia’s Productivity Commission, in its annual trade review released Tuesday, estimated that removing remaining tariffs could save businesses 4 billion Australian dollars (US$2.5 billion) annually in compliance costs.

“Removing Australia’s remaining tariffs would maximise the benefits to Australian production from other countries imposing tariffs,” the report stated.

It also projected a 0.37% increase in Australia’s GDP due to shifting trade dynamics but cautioned that long-term gains would be limited by increased global economic uncertainty.