Westpac (ASX:WBC, NZX:WBC) said in a note Thursday that falling coal and liquefied natural gas exports alongside rising imports have pushed Australia's goods trade surplus to a five-year low amid ongoing global trade uncertainty.

Ongoing uncertainty over US trade policies is prompting global exporters and importers to adapt as Australia's goods trade surplus plunged to AU$2.2 billion in May from a revised AU$4.9 billion in April, driven by a 2.7% fall in exports led by coal, liquefied natural gas, and agricultural products, while iron ore and metals exports saw modest gains, Westpac said.

Exports to the US tripled early in 2025 before tariff hikes but stabilized by May, while exports to China remained volatile, falling again after a brief rebound.

Goods imports rose 3.8% in May, driven by key Asian partners, China, Europe, and the UK, hinting at a possible shift away from the US, though one month's data is too limited to confirm, Westpac added.

Australia's trade flows are set to stay volatile ahead of the July 9 US tariff pause deadline, with few new agreements and persistent uncertainty weighing on exporters and importers.