Trump’s tariffs will hurt the world and the ones who love him most

US President Donald Trump’s imposition of tariffs punishes foreign friend and foes but confoundingly damages those he claims to help: American consumers and industry.

Trump has enjoyed a good run among partisan fans since his inauguration but his polarising tariff gambit will undoubtedly be his first test with his own supporters. They are the ones who will be forced to pay the price for such a wrecking-ball policy, with no guarantees the US economy will recover previous robustness.

Donald Trump holds up a chart of “reciprocal tariffs” while speaking during a Make America Wealthy Again trade announcement event in Washington.Credit: Getty

Trump had already announced tariffs on Canada, Mexico and China, as well as 25 per cent duties on steel and aluminium exports. But, his so-called tariff “Liberation Day” is a watershed moment for world trade. Stock markets crashed – the ASX200 dropped 1.9 per cent, wiping $48 billion off its value. The price of gold soared and uncertainty lies ahead as nations digest an economic policy that is counter to economic policies widely accepted for decades.

A universal 10 per cent tariff on all imports will go into effect on April 5. Most Asian nations will be hit with steeper tariffs beginning on April 9, including massive 49 per cent and 46 per cent charges for Cambodia and Vietnam respectively.

Under the new regime, Australian exports to the US will be hit with a 10 per cent tariff, with Trump singling out our continuing mad cow disease ban on US beef as a problem.

The changes have far-reaching consequences on the global system and economies of our region, especially South East Asia. Prime Minister Anthony Albanese stayed clear of retaliation, instead calmly announcing Australia’s response, which included strengthening anti-dumping provisions, $50 million in funding for industry to seek new customers, a $1 billion interest-free loans scheme for firms to expand into new export markets, prioritising Australian firms for government procurement and new a critical minerals strategic reserve.

Opposition Leader Peter Dutton criticised the Albanese approach as “weak” and said he would be prepared to fight with the US administration over tariffs. Surprisingly perhaps, he even took a personal swipe at Trump: “We have a special relationship with the United States and it hasn’t been treated with respect by the administration or by the president and the question now is what do we do to resolve this matter and to do it quickly?” Dutton also slammed Albanese as a leader of a bad government who could not get a phone call with Trump to discuss tariffs.

But what he did not say was that prime ministers and presidents from across the world have phoned the White House seeking special consideration and fared no better than Australia.

Trump has a predilection for chaos and a tendency to retreat when the whip comes down. But his protectionism has opened the door to a world trade war.

The true cost of Trump’s tariffs will take time to emerge but it threatens to inundate the federal election and Albanese and Dutton would be wise to adopt the first thing required of leaders in wartime: a united front.

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