The value of the Australian dollar could be hit as increased US tariffs on goods from Australia's trading partners impact local exporters.
US President Donald Trump has announced 25 per cent tariffs on items from Japan and Korea, which are Australia's second and third-biggest export markets, and its third and fourth-largest two-way trading partners.
Though Australia has been spared for now, it is vulnerable to flow-on effects, Monash University economics lecturer Isaac Gross said.
One of Australia's main exports to Japan and South Korea is iron ore, which is used to make vehicles that are one of their biggest exports to the US.
But if cars are unable to be sold in the American market, that will mean less demand for Australian iron ore, lowering prices.
That could and meaning mining giants like BHP and Rio Tinto will make less money and pay less corporate tax.
"The principal way that affects the Australian economy is through a lower Australian dollar and less tax revenue," Dr Gross told AAP.
"That would affect Australians as a whole ... it would definitely hurt the government's budget line and reduce economic activity, in especially the mining states."
There could be some upsides for Australian consumers as South Korean or Japanese goods that would normally have been exported to the US might be sent to Australia at a discounted price.
For now, uncertainty has engulfed the tariffs because of the erratic way Mr Trump wields the measures.
"A lot of countries that are trying to do deals with the United States are very frustrated," University of Sydney associate professor David Smith told AAP.
"They think that negotiations are going in one direction and then Trump makes a sudden announcement that takes it in another direction."
Prime Minister Anthony Albanese has faced increasing pressure to schedule a face-to-face meeting with the US president and push for a total tariff exemption.
However, it's unclear if that would work.
Japanese Prime Minister Shigeru Ishiba met Mr Trump in February, but by July the US president revealed his increased tariffs on the Asian nation and appeared to skip over its leader's name, calling him "Mr Japan" in a recent interview.
"I can see why the (Australian) prime minister would be seeking a face-to-face meeting, but it doesn't have the same kind of certainty that it had in the past," Assoc Prof Smith said.
"Now we're in a situation where the US is trying to negotiate 100 trade deals at once - it's clearly beyond the capacity of American negotiators.
"Trump is getting very frustrated, Trump's blaming other countries for the slowness of the negotiations and now he's lashing out."
