Australia unmoved by 20pc Donald Trump tariff threat

Australia will assume a 10 per cent tariff until it is advised differently by Donald Trump, Trade Minister Don Farrell says, after the US President lifted his baseline duty to 15-20 per cent.

US President Donald Trump waves as he and British Prime Minister Keir Starmer board Air Force One at Prestwick Airport ahead of a flight to northeast Scotland. Picture: Andrew Harnik / Getty Images

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Australia will assume a 10 per cent tariff at the US border until it is advised differently by Donald Trump, Trade Minister Don Farrell says, after the US President’s surprise announcement of a new baseline duty of up to 20 per cent.

The government had adopted a “watch and wait” strategy on the US President’s tariffs, believing no country would do better than his previously announced 10 per cent minimum.

Mr Trump moved the goalposts on Tuesday AEST, saying countries that did not negotiate special deals would face 15 to 20 per cent tariffs on their exports.

“We are going to be setting a tariff, for essentially the rest of the world, and that’s what they’re going to pay if you want to do business in the US,” he said at a press conference at his luxury golf course in Turnberry, Scotland.

Asked what the rate would be, he replied: “I would say in the range of 15 to 20 per cent. Probably one of those two numbers.”

Senator Farrell said the Trump administration had not notified the government of any change in Australia’s tariff rates. “As far as we know, we are still on 10 per cent,” Mr Farrell said.

“Remember on ‘Liberation Day’, he had a chart and Australia was on 10 per cent. Until we hear to the contrary, as far as we know we are on 10 per cent.”

Trade Minister Don Farrell in question time in the Senate. Picture: NewsWire / Martin Ollman

The government had opted against negotiating a new trade deal with the US, believing the strategy was vindicated by unfavourable agreements for countries that had gone through the process.

His deal with the EU on Sunday included a 15 per cent tariff on most EU goods, $600bn of investments in the US by European firms, and a European pledge to buy $750bn worth of US energy over the next three years.

It followed a deal with Japan last week, imposing a 15 per cent tariff on Japanese goods.

Britain clinched a deal with a 10 per cent tariff, but other countries have done far worse.

Indonesia was slapped with a 19 per cent tariff while Vietnamese exporters will face duties of 20 per cent.

Australian business groups are already concerned the nation’s exporters will face a higher baseline tariff than the original 10 per cent. “The longer it goes, the more likely that scenario becomes,” Australian Industry Group chief executive Innes Willox told The Australian.

“I think there’s real concern we’ll get lumped in with a range of others and get hit with 15 to 20 per cent across-the-board tariffs and whatever happens to specific sectors under section 232 (sector-specific) tariffs.”

Mr Willox said while a 10 per cent tariff would be an “irritant”, tariffs of 15 to 20 per cent would start to have a “real impact.”

“The trend line is definitely towards a larger tariff, plus whatever happens in different sectors – pharmaceuticals, steel and car parts.”

Mr Willox said businesses feared the higher rates would become “the new normal … History has told us that whoever becomes president in 2029 is unlikely to change that stance”.

European Commission president Ursula von der Leyen with Mr Trump at the Trump Turnberry Golf Club to announce a new US-EU trade deal. Picture: Getty Images

Opposition trade spokesman Kevin Hogan said Anthony Albanese’s failure to get a first face-to-face meeting with Mr Trump was undermining Australia’s ability to argue for a better deal.

“He needs to go over there and prosecute the case, to argue Australia’s case, but also to stand up for free trade across the globe, because of the importance of it for us as a trading nation, as Australia,” Mr Hogan told Sky News.

“(Mr Trump) went to the election saying he believed in this policy and he’s got some advisers around him that believe in tariffs.

“But that doesn’t and shouldn’t stop our Prime Minister from going and having a physical meeting with Trump, putting the case that this isn’t OK.”

The government moved to address a longstanding US complaint over Australia’s trade policy in recent days, overturning quarantine restrictions on the import of American beef following a long-term review. It denied bio­security laws had been compromised to appease the Trump administration.

Nationals leader David Littleproud called for a Senate inquiry into the decision, saying its timing and risks to the nation’s beef industry needed to be investigated.