Trump Predictably Stabs Australia in the Back

During Donald Trump’s previous term as president, Australia was granted exemptions to a range of trade sanctions, in recognition of our nation’s close allegiance with the United States – which has included surrendering control of the military facility at Pine Gap in the Northern Territory, entering the AUKUS pact, paying billions for military weapons, committing hundreds of billions for further military arsenal and seemingly unquestioningly entering nine armed conflicts – some of which other US allies refused to take part in.

But despite all of this – and our nation recently making a downpayment of $800 million towards AUKUS, committing $357 billion over 30 years for a submarine purchase which is unlikely to ever reach fruition and incrementally surrendering military control to the US – Donald Trump has made clear our nation will not be getting any exemptions.

And perhaps to make things worse, our prime minister says that – unlike other nations such as Canada, Mexico and China – we will not be imposing reciprocal tariffs on the US.

Having supported and given so much to the United States for so long, only to be brushed aside by the current president, many believe it may be time to rethink our relationship with the world’s greatest superpower, and seek alternative trade relationships as well as diplomatic alliances.

Australia Fights to Push for Exemption

Australia was not pardoned when it came to the latest tariff imposition on the global economy—in fact, our country was the most affected by the global tariff regime, which saw a whopping 25% on all aluminium and steel imports. Australia pleaded for an exemption to the tariffs, but Trump—as per usual—only wanted to suit his selfish needs. Reportedly, he “considered it” but of course didn’t think of any other person besides himself.

Australia will continue to ask for exemptions, as the tariffs on aluminium and steel are on a long list of concerns. The changes in the trade routes will negatively impact the pharmaceutical industry and the stock market, which fell an unbelievable $45 billion on Tuesday. 

Despite running a trade deficit with the United States, Australia has not been exempted from the new tariffs. This imbalance, where the US exports more to Australia than it imports, should theoretically support Australia’s case for an exemption. Australia’s imports of expensive manufactured goods have significantly contributed to the US economy, while the US imports Australian meat and pharmaceuticals. 

The new tariffs on pharmaceuticals and meat, two of Australia’s major exports, will directly harm our economy and strain our relationship with the United States. A 25% tariff on these goods will lead to a significant reduction in their demand, further exacerbating the economic impact.

Australia — and the World — Heavily Reliant on US Trade

The impact of the President of the United States’ new tariffs, which will wreak havoc domestically and internationally, is already widespread. Trump’s new 25% tariffs on all US steel and aluminium imports will be a huge detriment to global trade and the economy. 

Despite companies being able to make short-term accommodations to work around the changes in the economic system, there are more effective steps that government officials and policymakers can take to mitigate the long-term economic impacts. 

In addition, Australia and the rest of the world need to understand the effect that the new tariffs on Australia, China, Mexico, and Canada have on the rest of the world. The International Emergency Economic Powers Act has even gone so far as to label the current situation an ’emergency’, with the astronomical tariffs disrupting supply chains, political stability, and economic trade. 

For Australia specifically, the new tariffs will harm the country’s miners, raw materials, aluminium, and steel. Although 15% of Australian exports go to the US, the widespread effects of the US’ high tariffs could make Australia’s exports less desirable in other countries — thus, the tariffs will reduce widespread demand for raw materials, which is a massive part of Australia’s economy. 

Australia Faces Even Bigger Problems 

In addition to the global economic downturn and tariffs that make the exportation of raw materials less in demand, one of the most glaring red flags is the US trying to block the sale of iron ore to China. 

The relationship and trade dependence between Australia and China cannot be understated. The importance of the Chinese reliance on mining in the 2000s significantly changed the country’s economy. Now, Australia and China are engrossed in an iron ore relationship that accounts for nearly 85% of Australia’s exports. 

Thus, Australia cannot afford to decouple from China regarding political relationships or trade relations. China supplies upwards of 60% of most of the world’s exports, such as new technology and smartphones, and is a leading player in the political world, affecting the stability of organisations such as AUKUS.

Given the potential changes in the US-China relationship, Australia must focus on building strong relationships with other Asian Pacific countries. By diversifying its trade partners, Australia can reduce its economic reliance on the US and China, thereby mitigating the impact of their trade disputes on our economy. 

Australia Needs To Do Something — But Can They?

Retaliation to the tariffs would increase the price local consumers pay for goods and lead to long-term consequences for the country’s economy. Although it can seem appropriate and ethical to fight back against a tyrannical dictator who is making the economy falter, taking drastic steps to combat Trump’s insane tariffs would only decrease the nation’s exports and imports—something that Australia simply can’t afford. 

Instead, short-term strategies, temporary measures, and targeted support are the key to helping Australia navigate the trade changes.

Policymakers can devise measurable and temporary changes to the economy similar to those during a national disaster, such as COVID-19 measures. The main concern should be ensuring people remain employed and get through this tough time by keeping companies open.

Furthermore, just because one trading route has been compromised with the US doesn’t mean that global and Indo-Pacific trade has to be completely altered. Instead, Australia can retain its current trade agreements with its Indo-Pacific trading partners to create a trade diversion, leading to an increase in trade between Australia and these countries out of necessity. This shift towards alternative trade relationships offers a glimmer of hope in these challenging times. 

The best solution for Australia, and other nations, instead of retaliation is to work together with the WTO to isolate the United States, reduce the possibility of the United States being able to negotiate special deals on resources and taxes, and come up with new global strategies that do not require a reliance on the United States. 

Should Australia Leave the AUKUS?

One other solution that Australia can take in retaliation to the exorbitant tariffs is leaving the AUKUS agreement. Greens leader Adam Bandt has urged the nation’s government to leave the AUKUS relationship, describing the newly set tariffs on some of Australia’s biggest exports, such as steel, aluminium, and pharmaceuticals, as a ‘wake-up call’ for the country to focus on self-preservation. 

The Greens party has historically opposed the agreement between the US and Australia due to its focus on costly projects, like the nuclear submarine project, the importance placed on new American technology, and Donald Trump’s volatile nature. 

Although the government has fought hard for an exemption, it seems a futile attempt—Trump has never listened to anyone else, but those who directly serve him, and this is no different. Albanese deemed the new tariffs ‘not a friendly act’ after he was unable to secure an exemption, leading the Trade Minister and foreign relations officials to scramble to find out what exactly the US wants with this new relationship.

Other measures that the Greens call for within Australia to help mitigate the adverse effects of the new tariffs include backing Labor measures, such as cutting student debt, increasing the bulk billing incentive, boosting climate activism, and taking immediate action on providing affordable housing. 

The Future Of Australia And The Us

The US has abandoned all previous positive relationships with foreign countries and has decided on a blanketed ‘no exceptions’ policy for their tariffs — something that is divisive, isolating, and — honestly — very selfish and stupid from the POTUS. 

Despite blasphemous and harmful claims from Trump’s trade adviser, Peter Navarro, that Australia was harming the US’ aluminium market, and Trump falsely promising Albanese the possibility of an exception, government officials don’t believe the end product was a result of bad faith. 

However, the US’ clear lack of insight and care regarding Australia and the global economy says otherwise. Australia has never imposed tariffs on US goods into Australia and simply doesn’t have the power to take more intense retaliatory measures, like countries like Canada and China. 

Therefore, Australia must create trustworthy and honest relationships with other Indo-Pacific countries to avoid an economic meltdown. And the future of the US and Australia’s relationship? This could signal the beginning of the end.