ALP waves white flag over Donald Trump’s 10pc tariffs

There is a sense of resignation within the Albanese government that Australia will be unable to ­obtain an exemption to the 10 per cent baseline tariff, with the government reluctant to offer the White House any concessions.

Foreign Minister Penny Wong and US Secretary of State Marco Rubio at the Quad meeting in Washington on Wednesday (AEST). Picture: AFP

You can now listen to The Australian's articles. Give us your feedback.

You can now listen to The Australian's articles.

Labor is growing increasingly pessimistic there is any chance Donald Trump will exempt Australia from his 10 per cent universal tariff, with the government reluctant to offer the White House any concessions unless the US fully restores the nation’s prior decades-long open access to American markets.

Penny Wong dismissed the prospect of a new trade deal after a meeting with US Secretary of State Marco Rubio in Washington where she attended the Quad foreign ministers’ meeting, declaring that “we have a free-trade agreement and we would like that to continue to be honoured”.

In addition to her bilateral meeting with Mr Rubio, Senator Wong sat down with Japan’s Takeshi Iwaya and India’s Subrahmanyan. She said it had never been more important for all for Quad nations to “harness our collective strength, peace and stability for prosperity in the Indo-Pacific and for all our peoples”.

Senator Wong – who dodged questions on whether the US was as reliable under the current ­administration – acknowledged that Mr Trump was changing America. “President Trump has made very clear to the world that he envisages a different role for America,” she said. “We understand that, and we respect that.”

Mr Rubio sketched out his ­ambition to transform the Quadrilateral Security Dialogue into a “vehicle for action” rather than a forum for discussing “ideas and concepts”, with foreign ministers agreeing to launch initiatives to secure and diversify critical mineral supply chains and bolster maritime security.

“I think there are many global problems but also problems that we face in our respective countries that can be solved by us co-­operating together,” he said.

Arriving in Washington with Anthony Albanese still yet to line up a meeting with Mr Trump and Australia facing US demands to lift defence spending to 3.5 per cent of GDP, Senator Wong said Mr Rubio did not raise the defence budget nor issue a specific request for greater spending.

She could not provide a firm assurance that the AUKUS partnership – aimed at providing Australia with nuclear powered US Virginia-class submarines from the early 2030s – would continue in its current form following a snap-30 day review being conducted by the Pentagon.

In remarks that raise questions over the level of Australian input, Senator Wong said the Albanese government would “provide information to that review as and when requested”. The Pentagon’s investigation into AUKUS will be handed down about the time Mr Trump’s July 9 deadline will mark the end of a 90-day pause on additional country-specific reciprocal tariffs, with the administration inviting “best offers” from impacted nations hoping to avoid re­instated or increased tariff rates.

There is a sense of resignation within the Albanese government that Australia will be unable to ­obtain an exemption to the 10 per cent baseline tariff. The Australian understands that the government strongly feels that any suggestions the nation has been left in the shade by the recent UK-US trade deal are unreasonable.

While the UK was able to win an agreement for reduced 10 per cent tariffs on cars as well as a 25 per cent rate on steel and aluminium instead of 50 per cent, it did not previously have a comprehensive free trade agreement with the US. And it remains ­captured by the 10 per cent general tariff.

Labor sources believe Australia made concessions two decades ago to achieve reciprocal tariff-free market access with the US, and there is growing consensus within government that further concessions should not be made now to achieve a lesser outcome.

Senator Wong made clear that Australia had no plans to abandon the News Media Bargaining Code opposed by US tech giants after Canada dropped its own plans for a digital services tax to salvage its own trading relationship with Washington.

“This government will always act in our national interests,” she said. “And you would know this is not a revenue-raising ­measure. This is a measure to try and ensure access, reasonable access to news content.”

Former deputy Treasury secretary Luke Yeaman, now CBA chief economist, said the only area Australia would be able to leverage the US on tariffs was critical minerals but conceded there was not “a lot of room to move”. “The key areas where there are trade-offs and where the US is pushing Australia is bio­security on beef, defence spending going north, and the PBS,” he said.

“ But I don’t think that the government will want to be seen to be trading those away. Where there is room for partnership is this issue of critical minerals. In the longer term, both the US and Australia have joined up interests in critical minerals.”

The official statement issued from the Quad foreign ministers said a new “critical minerals ­initiative” would be launched to “strengthen economic security and collective resilience by collaborating to secure and diversify critical minerals supply chains.”

It also revealed a plan for the first “Quad Indo-Pacific ­logistics network field training ­exercise” to be held this year to “strengthen shared airlift capacity and leverage our collective ­logistics strengths to respond to natural disasters more rapidly and efficiently.”

While China was not directly singled out, Quad foreign ministers said they were “seriously concerned” about the situation in the East China Sea and South China Sea. “We reiterate our strong opposition to any unilateral actions that seek to change the status quo by force or coercion,” they said.

“We express our serious ­concerns regarding dangerous and provocative actions, including interference with offshore ­resource development, the ­repeated obstruction of the freedoms of navigation and overflight, and the dangerous manoeuvres by military aircraft and coast guard and maritime militia vessels, especially the unsafe use of water cannons and ramming or blocking actions in the South China Sea.”

Asked later if China was a threat to Australia, Senator Wong declined to answer directly. She said China was a “great power … asserting its influence using all ­aspects of national power”.

“The challenge for Australia and for other countries is that … one can see where those interests differ from Australia’s interests,” she said.

Opposition acting foreign affairs spokesman Angus Taylor said Senator Wong was “coming home empty-handed” from Washington with no reprieve from tariffs. He said it was “absolutely crucial” that Mr Albanese met Mr Trump soon. “This government and this Prime Minister is better able to and more interested in getting a meeting with the President of China than the President of the United States,” Mr Taylor said. “It’s time to get serious about this.”