Listen: Australia is not a lone victim. Trump’s tariffs mistreat all

Weeks of diplomatic negotiations have, at least for now, failed, and Australia will be whacked with a 25 per cent tariff on steel and aluminium imports to the United States.

But should we really be surprised?

Trump, as international and political editor Peter Hartcher puts it, is a “man from another time” who believes a country’s prosperity is measured by its trade balances.

And Australia, Hartcher says, is not special.

Today, Hartcher speaks to Samantha Selinger-Morris, host of The Morning Edition podcast, on how the tariffs might affect Australia’s economy and its relationship to the United States. And if our government can reverse the decision.

Listen to the conversation by clicking the player above, or read on for an edited extract of the episode.

Selinger-Morris: Peter, tell us what we’ve heard about these tariffs?

Hartcher: We’ve heard that Donald Trump has decided to withdraw all exemptions for countries that have until now enjoyed exemptions on tariffs on their steel and aluminium exports to the US. Australia is one of the dozens of countries. Those countries included Brazil, Argentina, South Korea, all of the EU countries, Japan; they’re now losing those exemptions, and we’re one of them. You wouldn’t know that from the Australian coverage, which seems to suggest that we are a lonely victim here. But we are, in fact, now part of the universal Trump mistreatment of all countries, but most importantly, it’s the mistreatment of his own people. Because these tariffs simply push up the cost of goods, imported goods in the US.

Selinger-Morris: So why has Donald Trump actually introduced tariffs on these industries?

Hartcher: Well, the impulse and the politics of it are one thing, and the economics and the practicalities are another.

Donald Trump has a broadly 19th century mercantilist mindset. He is a man from another time. He believes that the power of a country is measured by its territorial area, hence making claims to annex all of Canada, making claims and reserving the use of force to annex all of Greenland from another NATO ally, Denmark. He’s a man who believes that countries’ prosperity is measured according to their trade balances, whereas, of course, since the 1930s the great, last great disastrous global encounter with tariffs, which contributed to throwing the world into the Great Depression.

Ever since then, we have learnt that, in fact, the best possible trade is the freest possible because it keeps the costs to ultimate consumers lowest, the cost of productions lowest.

But the US has persuaded itself, in recent decades; the American public has persuaded itself, and American policymakers and politicians have allowed it to happen, that trade has been unfair and punitive for American workers and manufacturing jobs in particular.

Selinger-Morris: Let’s turn to Australia. Our steel and aluminium industry; how big is it? And how much do we actually export to the US?

Hartcher: In practical terms, it’s negligible. This is a marginal question for Australia in terms of total Australian exports, these steel and aluminium exports make to the US, make up 0.2 per cent of exports. That’s one fifth of 1 per cent of our exports. And the company most affected, BlueScope Steel – which also has major manufacturing plant in the US, so it can simply crank up its production behind the tariff wall in the US, and its production from Australia can be diverted to other countries – has said it doesn’t expect any major effect.

Selinger-Morris: And you’ve stated on numerous occasions that Trump has a transactional relationship with America’s allies. So, does this change things at all, in a practical way, for us?

Hartcher: I think this is a salutary lesson for Australia because we’ve been thinking that we are very special, and we will always be protected by America. Because remember, you know, we have been freeloading on them for defence purposes for decades. Any illusion we might have now that we are in any way special should be gone, should be completely exploded by this development and wake us up that we need to be self-reliant.

It really should show us that in terms of defences, our reliance on the US for intelligence, vital intelligence flows, plus security guarantees, or at least imagined security guarantees, are completely unreliable. That the US can change its definition of allies and interests overnight, and we need to be prepared, and we are not.