US Treasury Secretary Scott Bessent has provided one of the most comprehensive intellectual justifications for Donald Trump’s imposition of tariffs – a sign that any Australian exemption from imminent steel and aluminium tariffs will be hard fought.
In his keynote address to the Australian Super Summit at the embassy in Washington, Bessent defended the role of tariffs and sketched out the Trump administration’s economic blueprint – including its plan to lift productivity, lower taxes, slash red tape, unleash cheaper energy and drive private sector jobs growth.
The irony is that much of this agenda is at odds with the economic plan being pursued by the Labor government back home. Anthony Albanese has re-regulated the labour market, broken his promise to accept the stage-three flattening of the personal income tax scales, failed to bring down energy prices and drawn criticism for not sufficiently tackling a long-term decline in productivity. Bessent’s speech was a reminder that the differences between Australia and America do not end with Trump’s introduction of sweeping tariffs.
Yet it was also a positive sign that the relationship remains close and that high-level engagement is taking place with the Trump administration.
At a period of historic uncertainty about the direction of US economic and strategic policy, this cannot be taken for granted.
The Super Summit – nine months in the making – has created a fresh opportunity for the Albanese government. It leverages the investment power of Australia’s $US2.6 trillion pool of retirement towards the diplomatic campaign to win an exemption from America’s planned 25 per cent steel and aluminium tariffs due to commence on March 12.
Albanese will be hoping to win a carve-out and prevent the tariffs and his management of the US relationship – including his personal engagement with Trump himself – from becoming an issue during the election campaign.
However, rather than providing hope that an Australian exemption was in the pipeline, the speech from Bessent served as a reminder about the strength of the commitment of the new US administration to an aggressive new trade agenda.
Bessent promoted tariffs as central to achieving three goals. First, rebuilding America’s industrial capacity and lifting up the working class by creating and protecting manufacturing jobs.
Second, generating more government revenue which could help fund investments beneficial to American families, workers and companies.
Third, correcting “imbalances” in other economies by adjusting the US consumer accommodation of their excess supply.
He suggested the use of tariffs would help reclaim American economic security following the supply chain crisis triggered by the Covid-19 pandemic and Ukraine war.
While Bessent acknowledged that, on trade issues, there was “very little friction between the US and Australia”, there was no acknowledgment this could result in a tariff exemption.
While no one in government will say it, the imposition of tariffs would widely be seen as a negative development in the alliance relationship and a downgrading of ties with Canberra.
Asked in Washington whether the US was as reliable as in the past, Jim Chalmers was careful in his response. “I’ve got no reason to believe otherwise,” he said.
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