Optics better than detail for PM in Trump hook-up

There was no firm result but Anthony Albanese put on a brave face following his telephone hook-up with Donald Trump to discuss getting an exemption to the punitive tariffs put on steel and aluminium exports to the US. There will always be an element of unpredictability in dealings with Mr Trump but we have been assured the numbers are very much on Australia’s side.

Mr Trump took note of the fact Australia was one of the few countries with which the US had a trade surplus, which undermined one of his key arguments for tariffs – that the US was being ripped off by its allies and trading partners. The Prime Minister pointed Mr Trump towards Australia’s abundance of critical minerals and multi-trillion-dollar pool of investment funds through superannuation, some of which could find its way into the US. A summit on this is being held at the Australian embassy in Washington later this month.

After the call Mr Trump said Mr Albanese was a “very fine man” and he would consider an exemption. But, as always, the devil is in the detail. As we report on Wednesday, the executive order specifically mentions Australia and singles us out for breaking a 2018 agreement to limit exports of aluminium to the US. We must now argue the sum of the trading relationship outweighs the misdeeds of particular parts.

According to the US Studies Centre, Australia consistently ranks in the top five countries with trade surpluses with the US. The latest figures from the Office of the US Trade Representative show the US goods and services trade surplus with Australia was $US27.1bn in 2022. Total trade was worth an estimated $US77.1bn in 2022. Exports to Australia were $US52.1bn and imports from Australia to the US were $US25bn. Mr Trump made particular mention of Australia’s purchase of aeroplanes. In 2021, the major US exports were machinery and mechanical appliances, transportation equipment and chemicals, plastics, rubber and leather goods. Australia’s exports to the US were mainly agricultural products, stone, glass, metals and pearls, along with chemicals, plastics, rubber and leather goods.

Given the scorecard, there is reason for optimism. But given the wording of the executive order it will not be easy. Mr Albanese has one month to get Mr Trump’s verbal agreement for consideration across the line into an exemption. But even if we are given an exemption to the latest round of tariffs on metals, as seems possible, we can still expect to experience collateral damage from Mr Trump’s determination to up-end the world trading order. This will come about through the general inflationary impact of tariffs in the US and the potential for dumping of goods into Australia that otherwise would go to the US. That Australia is not the only country Mr Trump may be willing to make special arrangements with only clouds the picture.

The big takeaway from Tuesday’s telephone conversation is that Mr Trump is at least willing to take a call from Mr Albanese, who must hasten his plans for a face-to-face meeting with the President. Waiting until the Quad meeting later this year is not sufficient. There was no suggestion in Mr Trump’s flattery of Mr Albanese that the US leader intends to play domestic politics on trade given the proximity of an election. Mr Albanese must put domestic politics on this issue aside as well and reach out to whoever can help reinforce Mr Trump’s understanding of the genuine beneficial nature of the US-Australia relationship for both sides.