Begging for concessions legitimises Trump’s illegal tariffs

America does not become greater through making allies into supplicants.

Australia should not negotiate with Donald Trump. We should just ignore him. No gratuitous comments. No supplicant phone calls. No offer of concessions. No response to his illegal tariffs. We are a sovereign nation not to be bullied and intimidated.

Trump is desperate for a cringing phone call, an opportunity to glory in his power, a reason to claim that our offer on concessions confirms the legitimacy of his actions. We mustn’t play his pathetic game.

How can Trump plead “unfairness, currency manipulation and trade barriers” when the US has the highest living standards in the world; sure, there are serious inequities in the US, but it is a problem of its own making, not ours. The response in Australia to date has focused on our across-the-board 10 per cent illegal tariff. Yet, the biggest impact on Australia will come from our neighbours in the Asian region.

Our biggest trading partner is China and, taken as a bloc, the ASEAN countries are our second-biggest trading partner. The tariffs imposed by Trump on all these countries range from 35 per cent to 65 per cent. There will be a deep recession in Asia, and it will profoundly impact on growth, jobs and investment in Australia. It is cruel to poorer countries such as Cambodia and Vietnam; punished for being key to US supply chains.

Australians have been a loyal ally of the US for over 70 years. We have supported every US-initiated war around the globe, and in doing so we have lost so many young Australian lives and condemned thousands more to lifelong post-traumatic stress disorder, with so many ending in suicide.

We have a significant trade deficit with the US – last year we imported over $60bn of US exports, and the US imported just over $30bn of Australian products and services. As well, we host, free of tax, US tech giants. Furthermore, we also have an investment deficit with the US – we invest more of our savings in the US than the US invests in Australia. And, more importantly, more than 20 years ago we signed a legally binding free-trade agreement that committed both countries to imposing zero tariffs on one another’s exports. It is why Trump’s 10 per cent tariffs on everything we export to the US are illegal and in total violation of this legally binding FTA.

Now we get told that unless we respond with “phenomenal” concessions, we are stuck with the 10 per cent tariffs on everything we export, with potentially more to come if we don’t “bend the knee” to this hapless President. America does not become greater through making allies supplicants.

Why should we meekly negotiate concessions with the US? It won’t be a negotiation; the US will expect unilateral concessions. A concession implies we have wronged the US. Yet, there is nothing to negotiate because the tariffs are illegal, totally unwarranted and deeply offensive given the loyalty and friendship Australia has extended to the relationship with the US for more than 70 years. We have not wronged the US in any way.

Andrew Robb. Picture: News Corp

We should just get on with finalising an FTA with the European Union, and consider initiating a process to combine two existing Asia-Pacific agreements: the 12-country Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the 15-country Regional Comprehensive Economic Partnership – to deliver a comprehensive Asia-Pacific free-trade zone, open to the current 27 member countries, which include China, Japan and South Korea, and with an invitation for India and the US to join when they see fit. This would be an unequivocal statement of where we stand. This should be our response to President Trump.

It would also recognise the reality that while the West is closing up its economies, Southeast Asian countries, and India, have been opening up by dismantling so many of their former protectionist positions, with the result that billions of dollars are being invested, and tens of millions of people are joining the middle class – a clear demonstration, once again, that freer trade works.

Sadly, this Southeast Asian progress will be smashed by Trump’s 35-65 per cent tariffs in Asia. Retaliating to US tariffs by imposing our own tariffs will only increase Australia’s inflation and hurt our own people, as we saw in the 1930s global recession.

We must resist the Trump mantra, which involves throwing the law of comparative advantage out the window. We must not give credence to his demands and expectations. We cannot negotiate with this man.

Andrew Robb was minister for trade, investment and tourism, 2014-16.