Australian wool industry faces tariff turbulence as global demand weakens

Australia’s wool industry is grappling with rising uncertainty as US tariffs on Chinese goods cast a shadow over global trade. With 86 per cent of Australian wool exported to China half for domestic use and half re-exported post-processing industry leaders fear a significant downturn if tariffs persist.

The 145 per cent US tariff on Chinese products threatens to disrupt wool flows, especially as major sports and outdoor apparel brands rely on Merino wool processed in China. Textile consultants warn of rapid impact, noting some wool shipments have already been redirected. Compounding to the issue, China’s domestic demand remains weak due to economic slowdown and consumer hesitation.

Josh Lamb of the Australian Council of Wool Exporters said while China is still buying, the true impact may lie ahead, particularly as currency volatility adds pricing unpredictability. Meanwhile, Australian Wool Innovation’s Jock Laurie emphasized the broader dent in economic confidence, which could suppress demand globally.

WoolProducers Australia's Jo Hall echoed the cautious tone, highlighting that the full effect will only become clear as market responses unfold. Although tight supply may offer price support, industry stakeholders agree the market is in flux, with potential long-term effects hinging on global economic stability and US-China trade decisions.