Trump tariff hikes will hit his most ardent supporters

The Donald Trump march to chaos continues unimpeded in Washington DC. Hard on the heels of blaming a plane crash on diversity hiring policies, shirt-fronting the US Constitution by stockpiling authority and marginalising anyone who can challenge him, he has introduced a tariff regime that threatens to escalate into a trade war with far-ranging implications at home and abroad.

The US tariff war will affect Australia.

The US president hit both Canada and Mexico with a 25 per cent tariff on imports, and China with a 10 per cent hike. He had been spruiking the changes against America’s largest trading partners for months. Canada’s oil and energy products face a relatively less punitive 10 per cent rise, but both Canada and Mexico have threatened retaliation and may be forgiven for asking that with a friend like the US, who needs enemies?

The move has already been described by The Wall Street Journal as “the dumbest trade war in history” and it predicted a declining trend in US trade and manufacturing capability. We mentioned this because the publication is part of the media empire of Trump’s leading cheerleader, Rupert Murdoch.

Trump returned fire, describing the newspaper as “globalist” and “always wrong” but also admitted consumers – including presumably many of his most ardent supporters – could face higher prices as a result of an escalating trade war. “This will be the golden age of America,” he posted on his Truth Social account. “Will there be some pain? Yes, maybe (and maybe not!) But we will make America great again, and it will all be worth the price that must be paid.”

Trump’s strategic unpredictability is his strength and weakness. His rationale for tariffs is changeable – one minute he is trying to foster diplomatic change, the next he is attempting to raise revenue; then he runs off to deal with trade imbalances. But his tariff move has caused shock waves at home and across the world as nations wonder where Trump’s disruptive presidency may alight next and worry if he will jeopardise trade agreements that have taken years to negotiate in good faith.

During Trump’s first term as president, Australia sidestepped his 2018 imposition of hefty steel and aluminium tariffs against the European Union, Canada and Mexico after aggressive lobbying led by then prime minister Malcolm Turnbull and his foreign affairs minister Julie Bishop.

Should Trump’s tariff war broaden across the globe, Australia will depend again on our diplomatic skills to ensure exemptions. We can only assume Canberra is already war-gaming what other arrangements between Australia and the US could be suddenly thrown on the table.

A year before Australia’s federation, an American academic noted the principal cause of all wars has been economic. That aphorism hangs heavy in the air as Trump picks his fight over tariffs with friends and foe and the world waits to see what happens.

But Trump’s willingness to visit economic catastrophe on his most faithful supporters, who dared dream he would bring a better world, is proving a brutal reality check.

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