Hi there, Samantha Selinger. Morris here. Your host of the Morning Edition. American President Donald Trump announced this morning that he would issue a 10% tariff on all Australian exports to the US, and he singled out Australia's main export beef, saying our current trade relationship on the product was unfair. Today we bring you a bonus mini episode with international editor Peter Hartcher on what these tariffs mean for us and what might come next. So, Peter, tell us what has happened. What sort of tariffs has Donald Trump slapped on us?

Hi there, Samantha Selinger. Morris here. Your host of the Morning Edition. American President Donald Trump announced this morning that he would issue a 10% tariff on all Australian exports to the US, and he singled out Australia's main export beef, saying our current trade relationship on the product was unfair. Today we bring you a bonus mini episode with international editor Peter Hartcher on what these tariffs mean for us and what might come next. So, Peter, tell us what has happened. What sort of tariffs has Donald Trump slapped on us?

Well, there's three waves. The first was aluminium and steel tariff then followed by automobiles and automobile parts tariffs. Australia doesn't manufacture any cars, but we do export car parts to the US. And then today is the big one where Trump announced tariffs on every country that sells goods to the US with a baseline, as he put it, minimum tariff of 10% and then ranging up into the into the 50s and 60 percents for other countries. Australia didn't want a 10% tariff put on all its exports to the US, but together with Britain we have the lowest tariff rates applied to us. All other countries have higher tariff rates, uh, even some of America's most intimate allies. Israel, for example, uh, has a 17% tariff applied. Trump calls these reciprocal because he says what we've done is figured out what everybody else does to us, and we calculate that to a single number, and then we halve it just to be kind because we're a kind country. That's direct quote. And then, uh, apply that to all imports from that country. Uh, so that's what's happened. But Australia having managed to get the lowest possible rate of tariff, it's actually improved. Now Albanese, the prime minister, hinted at this this morning without saying it outright. But that means it's actually improved Australia's relative competitiveness into the US, exporting to the US relative to all other countries except for the except for the Poms. And we don't actually compete with the poms in almost any field in exporting to the US. So we've gotten off lightly. In some ways it's even, uh, it's even an advantage that Australia has managed to secure. But that will be a cold comfort to the some of the exporters who will who will suffer some of the exporting companies and industries will suffer because they will have lost 10% competitiveness, uh, measured against American producers in America, which of course don't have a tariff applied to them.

Well, there's three waves. The first was aluminium and steel tariff then followed by automobiles and automobile parts tariffs. Australia doesn't manufacture any cars, but we do export car parts to the US. And then today is the big one where Trump announced tariffs on every country that sells goods to the US with a baseline, as he put it, minimum tariff of 10% and then ranging up into the into the 50s and 60 percents for other countries. Australia didn't want a 10% tariff put on all its exports to the US, but together with Britain we have the lowest tariff rates applied to us. All other countries have higher tariff rates, uh, even some of America's most intimate allies. Israel, for example, uh, has a 17% tariff applied. Trump calls these reciprocal because he says what we've done is figured out what everybody else does to us, and we calculate that to a single number, and then we halve it just to be kind because we're a kind country. That's direct quote. And then, uh, apply that to all imports from that country. Uh, so that's what's happened. But Australia having managed to get the lowest possible rate of tariff, it's actually improved. Now Albanese, the prime minister, hinted at this this morning without saying it outright. But that means it's actually improved Australia's relative competitiveness into the US, exporting to the US relative to all other countries except for the except for the Poms. And we don't actually compete with the poms in almost any field in exporting to the US. So we've gotten off lightly. In some ways it's even, uh, it's even an advantage that Australia has managed to secure. But that will be a cold comfort to the some of the exporters who will who will suffer some of the exporting companies and industries will suffer because they will have lost 10% competitiveness, uh, measured against American producers in America, which of course don't have a tariff applied to them.

Okay. Well, let's get into this. I mean, how much do we actually export to the US and what are our biggest industries?

Okay. Well, let's get into this. I mean, how much do we actually export to the US and what are our biggest industries?

Well, it's just under $40 billion Australian a year. Uh, the last full annual statistics I saw was Australia exported only 8% of its total exports to the US. So it's a small slice, but the Prime Minister used a figure of 5%, uh, this morning. So I'm assuming that's the current year, uh, year to date figure. So it's a relatively small slice. It won't have any measurable direct impact on Australia's economic growth. It will, uh, have some dislocation effects for the biggest exporters. And those industries are, uh. Well, obviously already aluminium and steel have been hit with a tariff, but the new ones, uh, and the biggest is beef and sheep meat. Uh, then gold and precious metals and precious stones. Pharmaceuticals, uh, is another. So? So they're the biggest industries to be hit with this new 10% tariff.

Well, it's just under $40 billion Australian a year. Uh, the last full annual statistics I saw was Australia exported only 8% of its total exports to the US. So it's a small slice, but the Prime Minister used a figure of 5%, uh, this morning. So I'm assuming that's the current year, uh, year to date figure. So it's a relatively small slice. It won't have any measurable direct impact on Australia's economic growth. It will, uh, have some dislocation effects for the biggest exporters. And those industries are, uh. Well, obviously already aluminium and steel have been hit with a tariff, but the new ones, uh, and the biggest is beef and sheep meat. Uh, then gold and precious metals and precious stones. Pharmaceuticals, uh, is another. So? So they're the biggest industries to be hit with this new 10% tariff.

But overall, is it the case that we can just export our goods to other places so that these tariffs don't actually hurt us?

But overall, is it the case that we can just export our goods to other places so that these tariffs don't actually hurt us?

Absolutely. And that's what everybody will be doing. Uh, all exporters will now be especially ones hit with uh, the larger uh, tariffs, the more punitive tariffs, the EU 20%. China's hit with a tariff of over 30%. Uh, those countries products will lose pretty substantial competitiveness pricing, uh, in the US. And they'll be either looking actively for other markets or their goods will simply end up being dumped in other markets. Uh, so we have that opportunity, of course, to divert redirect trade to other countries, just as Australia did when China applied coercive trade, uh, bans on Australia. And that was a successful, very successful episode where the Australian economy suffered zero measurable impact. Um, I'd make two points about the the effects beyond the immediate effects on those industries, uh, such as beef, pharmaceuticals that are going to be affected by this directly. Uh, Samantha, the larger effects of all the trade dislocations and rearrangements that are going to go on in the world as a result of this, means that we're going to get a pretty good flow, I expect, of cheaper goods from other countries, most notably China, because it's, uh, it's our largest source of imports because they can't sell as much as competitively in the US as they were yesterday. Uh, a lot of their goods, laptop computers, electric vehicles, other consumer goods are going to end up in Australia at cheaper prices because they've been priced out of the US market. So we are actually going to get some consumer benefits across quite a lot of product lines, I expect. And that the second point, the overarching macro global macro economic point out of this is that the price of trade worldwide has just gone up. This is a tax on global trade, which means that the macro macroeconomic effect is that global growth will slow. Uh, there's a pretty good chance you'll end up with a recession in the US and a global growth slowdown everywhere to recession type levels, probably. And that will not be helpful for us or for anybody.

Absolutely. And that's what everybody will be doing. Uh, all exporters will now be especially ones hit with uh, the larger uh, tariffs, the more punitive tariffs, the EU 20%. China's hit with a tariff of over 30%. Uh, those countries products will lose pretty substantial competitiveness pricing, uh, in the US. And they'll be either looking actively for other markets or their goods will simply end up being dumped in other markets. Uh, so we have that opportunity, of course, to divert redirect trade to other countries, just as Australia did when China applied coercive trade, uh, bans on Australia. And that was a successful, very successful episode where the Australian economy suffered zero measurable impact. Um, I'd make two points about the the effects beyond the immediate effects on those industries, uh, such as beef, pharmaceuticals that are going to be affected by this directly. Uh, Samantha, the larger effects of all the trade dislocations and rearrangements that are going to go on in the world as a result of this, means that we're going to get a pretty good flow, I expect, of cheaper goods from other countries, most notably China, because it's, uh, it's our largest source of imports because they can't sell as much as competitively in the US as they were yesterday. Uh, a lot of their goods, laptop computers, electric vehicles, other consumer goods are going to end up in Australia at cheaper prices because they've been priced out of the US market. So we are actually going to get some consumer benefits across quite a lot of product lines, I expect. And that the second point, the overarching macro global macro economic point out of this is that the price of trade worldwide has just gone up. This is a tax on global trade, which means that the macro macroeconomic effect is that global growth will slow. Uh, there's a pretty good chance you'll end up with a recession in the US and a global growth slowdown everywhere to recession type levels, probably. And that will not be helpful for us or for anybody.

Okay. And now we have heard from both Australian Prime Minister Anthony Albanese and opposition leader Peter Dutton. They've both said that these tariffs are unacceptable. What have we heard from them, if anything, about whether Australia would, you know, issue reciprocal tariffs on the US?

Okay. And now we have heard from both Australian Prime Minister Anthony Albanese and opposition leader Peter Dutton. They've both said that these tariffs are unacceptable. What have we heard from them, if anything, about whether Australia would, you know, issue reciprocal tariffs on the US?

The Australian government is one of the few that is not going to respond with any retaliatory tariffs. The Europeans, the Chinese, they've got big retaliatory tariffs poised ready to go up that won't help their consumers. This is a matter of political face and national spirit that these countries are doing this. They're trying to respond to patriotic anger and resentment against the US. But it doesn't help their consumers because all it does is mean that it ratchets up the price of, uh, imports from the US to those countries. So if Australia, if Albanese had stood up this morning and said they're putting a 10% tariff on us, we're going to put a 10% tariff on the Americans. Uh, that simply would have meant that US goods coming into Australia would have been 10% more expensive. How does that help the Australian consumer? How does that help the Australian company that's buying an American input to put into one of its products? It doesn't. That would be, as Albanese said the other day, cutting off our nose to spite our face. It would be self-harm and it would be ridiculous. So the Australian government has kept very cool, very calculated, not applied any reciprocal tariffs, but instead announced some measures to assist Australian companies to adjust. So, for example, he's announced $1 billion worth of loans that will be available to companies that need assistance to, uh, to to readjust their trade and so on, but not to try to punish the US in any, in any retaliatory kind of way.

The Australian government is one of the few that is not going to respond with any retaliatory tariffs. The Europeans, the Chinese, they've got big retaliatory tariffs poised ready to go up that won't help their consumers. This is a matter of political face and national spirit that these countries are doing this. They're trying to respond to patriotic anger and resentment against the US. But it doesn't help their consumers because all it does is mean that it ratchets up the price of, uh, imports from the US to those countries. So if Australia, if Albanese had stood up this morning and said they're putting a 10% tariff on us, we're going to put a 10% tariff on the Americans. Uh, that simply would have meant that US goods coming into Australia would have been 10% more expensive. How does that help the Australian consumer? How does that help the Australian company that's buying an American input to put into one of its products? It doesn't. That would be, as Albanese said the other day, cutting off our nose to spite our face. It would be self-harm and it would be ridiculous. So the Australian government has kept very cool, very calculated, not applied any reciprocal tariffs, but instead announced some measures to assist Australian companies to adjust. So, for example, he's announced $1 billion worth of loans that will be available to companies that need assistance to, uh, to to readjust their trade and so on, but not to try to punish the US in any, in any retaliatory kind of way.

Okay. And just to wrap up, Peter, just wondering where to from here because there's some news out about China joining forces with North Korea and South Korea to create quite extraordinarily new trade paths with the EU. So does this provide a way out of this for us, too?

Okay. And just to wrap up, Peter, just wondering where to from here because there's some news out about China joining forces with North Korea and South Korea to create quite extraordinarily new trade paths with the EU. So does this provide a way out of this for us, too?

Well, there will be. Australia already is a.

Well, there will be. Australia already is a.

Participant in a web of international agreements, uh, bilateral as well as multilateral. And there will be more of that everywhere around the world. Australia is one of the freest and most active trading nations in the world, and Australia will be a part of that. No, no doubt about that. And by the way, this has handed a huge political advantage and geostrategic advantage, notably to China, which can now say to the world, look, those those horrible Americans are doing terrible things to you. Uh, we're stable. We're buying. Come, come and sell to us. So it's a it's a big political favor that Donald Trump has done to China. And, uh, the final and overarching point I'd make about this, Samantha. Beyond the tariffs and beyond the trade, is the greater question about the role of the US in the world and as an ally to Australia and to all US allies. This it wouldn't matter if the tariff were 1% or 500%. The principle that's been breached here is that Australia has a free trade agreement with the US. Donald Trump has breached that, as well as breaching the US's WTO Uto obligations. The World Trade Organization, which the US actually created after World War two. So he's walked away from that. He's torn up effectively the free trade agreement with Australia. So the lesson from that is this is a man now a country that will not pay heed to any treaty, agreement, commitment or obligation. And that cuts to defence relationships. It cuts to all relationships. This is a country on which we have long relied, is no longer reliable, and we have to stand ready for it to break any agreement or treaty, no matter how solemn we might think it is, is nothing to him, and we need to brace for that.

Participant in a web of international agreements, uh, bilateral as well as multilateral. And there will be more of that everywhere around the world. Australia is one of the freest and most active trading nations in the world, and Australia will be a part of that. No, no doubt about that. And by the way, this has handed a huge political advantage and geostrategic advantage, notably to China, which can now say to the world, look, those those horrible Americans are doing terrible things to you. Uh, we're stable. We're buying. Come, come and sell to us. So it's a it's a big political favor that Donald Trump has done to China. And, uh, the final and overarching point I'd make about this, Samantha. Beyond the tariffs and beyond the trade, is the greater question about the role of the US in the world and as an ally to Australia and to all US allies. This it wouldn't matter if the tariff were 1% or 500%. The principle that's been breached here is that Australia has a free trade agreement with the US. Donald Trump has breached that, as well as breaching the US's WTO Uto obligations. The World Trade Organization, which the US actually created after World War two. So he's walked away from that. He's torn up effectively the free trade agreement with Australia. So the lesson from that is this is a man now a country that will not pay heed to any treaty, agreement, commitment or obligation. And that cuts to defence relationships. It cuts to all relationships. This is a country on which we have long relied, is no longer reliable, and we have to stand ready for it to break any agreement or treaty, no matter how solemn we might think it is, is nothing to him, and we need to brace for that.

Honestly, it's just extraordinary. A thank you, as always, Peter, for your time.

Honestly, it's just extraordinary. A thank you, as always, Peter, for your time.

Always a pleasure, Samantha.

Always a pleasure, Samantha.

For the full interview with Peter Hartcher covering how our leaders must respond to Donald Trump, check in your Morning Edition feed for today's episode. Thanks for listening.

For the full interview with Peter Hartcher covering how our leaders must respond to Donald Trump, check in your Morning Edition feed for today's episode. Thanks for listening.