Trump’s tariff flip gives little reason for Aussies to be relieved

In Australia, there’s little reason to breathe a sigh of relief over the latest volley in Trump tariff tennis, says Vanessa Marsh in the US.

In the latest instalment of Donald Trump’s tariff whiplash, China has been thumped with punishing 125 per cent tariffs while the rest of the world has been given a modest break – for now anyway.

It might have been somewhat comforting if the leader of the most powerful country in the world stuck with the story first circulated by his aides who claimed this had been his plan all along.

That the President always intended to make an example of detractors like China with a formula of incite, retaliate and escalate on one hand while using the other to shake hands at the negotiation table with spooked leaders of the countries that didn’t strike back.

US Treasury Secretary Scott Bessent (2nd R) and Commerce Secretary Howard Lutnick look on as President Donald Trump signs an executive order as in the Oval Office of the White House. Picture: AFP

It might not have been the most popular strategy but it would have been of some consolation that the leader of the free world was executing a meticulous game of financial chess with a winning end game in sight.

The alternative motive for the President’s capitulation was that after days of global market meltdowns, predictions of a near-certain recession if he stayed the course and a barrage of criticism from even his closest allies, he decided to retreat and regroup.

Hours after announcing the tariff pause on social media, Mr Trump confirmed the latter of those two theories while talking to reporters alongside NASCAR Cup Series winners at the White House.

“I thought people were jumping a little bit out of line, they were getting yippy,” he said.

“They were getting a little bit yippy, a little bit afraid, unlike these champions.”

The President was also caught boasting on a hot mic about the massive charge in the markets after the announcement, saying it’s “gotta be a record”.

While the President celebrated the bounce back, KPMG chief economist Diane Swonk didn’t mince words, warning the damage was already done.

“Uncertainty is its own tax on the economy,” she told the New York Times.

“This is nuts. Damage done. Market relief is a head fake, unless the administration makes a major course correction.”

In Australia, there’s little reason to breathe a sigh of relief over the latest volley in Trump tariff tennis.

We were already facing a 10 per cent levy and that base rate will remain for all countries during the 90-day pause on higher reciprocal tariffs.

The increased hit to China of 125 per cent tariffs, our largest trading partner, will also have serious ramifications for our own economy.

And the pain is likely just beginning with the President warning he still intends to introduce tariffs on pharmaceuticals – one of our biggest exports to the US.

Originally published as Trump’s tariff flip gives little reason for Aussies to be relieved