Inside Labor’s plan to fight tariffs

From Schwartz Media. I'm Daniel James. This is seven AM. Australia is a small player in global trade compared with giants like the US and China, so when the world's two biggest economies embark on a trade war, we feel the impact. Donald Trump's knew tariffs on China could send shock waves through the Australian economy, affecting everything from iron ore exports to the cost of everyday goods. Australia is making the case that tariffs don't make economic sense, but

Yeah, I had time with the Trade minister this week.

I mean, with all that's going on and talking to like a full board trade war, do you think free trade is under threat at the moment. Well, no Don Farrell or the Donners is known. He's Australia's top trade negotiator, is a top labor.

Pal broker from the right faction.

He wants to evoke this sense of calm in the mailstroom while we're getting hit every single day with what's coming out of the Trump administration. He wants to get the message out that Australia has this in hand and despite the other Donald's big stick approach you with the rest of the world, this is something that he can address in what he says, cool calm and collected way.

Now, cool calm and collective way of prosecuting the arguments has been successful. I will it be with Trump?

Well, I will tell.

But we are talking about two of the top world economies, US and China slapping these sanctions on each other. And then we've got this middle power Australia and what it means for us. But this is going to be a top mission for him. As soon as his US counterpart, Howard Lutnik is confirmed as the Secretary of Commerce, he will be right in front of him and he wants to get Australia's message out there like.

It's a tail of two dons. And so how is the government preparing for any impact on Australia.

Well, the government wants to let Australians know in the first that it's done its homework. Trump and Lucknik have been flagging what they are doing right now for months.

I think we should put tariffs on.

Stuff we make and not put tariffs on stuff we don't make.

It's pretty simple, and of course it's a barkling ship.

The Treasurer Jim Chalmers has also been talking about what the tariffs mean. He has revealed that he directed Treasury to do modeling on the possible consequences of trade tensions. We have.

We actually did a bunch of work with the Treasury and other colleagues before the election, anticipating either outcome, and I've had the ability to brief my colleagues on a number of occasions.

Over the past few months. We've had work being done by the Trade Department. Also, we've had Penny Wong as a Foreign Minister, talked to Marco Rubio. We've had this mission now by the Defense Minister, the Deputy Prime Minister Richard Miles to talk to Pete Heigseeth, the Defense Secretary of the United States. It's all like this, three ministers going out as soon as possible to say, well, we don't need to do this.

Guys.

Can you give an idea of what the trade relationship is like between Australia and the US.

As it stands, trade with the United States is worth seventy seven billion US dollars annually and you know within that fifty two billion dollars to the United States and they've brought back twenty five billion dollars. So there is a surplus situation here. Australia is one of the top four nations in the world with a surplus. And it doesn't make economic sense. This is the message from the Albanese government. It doesn't make economic sense to slap tariffs

Oh, there's no doubt that can increase in Chinese terrorists to the United States would have an impact in Australia.

That means a lot to Australia because Australia's largest trading partner by far as China.

But we would be advocating for no terrorists on Chinese products.

So Don Farrell is more concerned about how they will impact China and the knock on effect that we'll have for Australia's relationship with China in a trade sense.

Yeah, it's a rare argument that Australia would go into bat for such a large superpower, But there is self interest there and that you know, this could slow demand for big ticket items such as iron ore. You know that iron ore is what we sell to China, is a significant part of Australia's budget. This is something that could raise prices for goods from China. This could affect inflation, It could raise prices of goods here in Australia.

But not to say don't do it to ours something we have a strong argument I think as to why they shouldn't do it to US, but we're saying, look, free and fair trade is not just in Australia's interest, not just in China's interesting, but in the longer tournament's in the interests in the United States.

So when you finally get to have a chat with girl soon to be counterpart, that would.

Be one of your main messages.

This should be a very simple argument that Australia is putting forward.

But it's very hard to say how things are going to go.

Coming up after the break. Who's better at handling Trump, labor or the coalition? Karen the Trade Minister's meeting with his US counterpart, Patty Wong, has met with hers. Richard Miles has been doing the same. But we recently spoke to Malcolm Turnbull on seven AM. He said, the only relationship that really matters is the one between the PM and Trump himself. So what's Albanezy doing to prosecute Australia's case.

Well, at the moment, and remember we're not in the official campaign, but essentially we're in campaign mode and so he's been very guarded when he's been asked about Trump. He's been very pointed saying that he's not going to run a daily commentary on daily actions from Donald Trump and all his decisions. But he does cite that there

But you know, he's very much leading it to the ministers at.

This stage while he concentrates on the domestic campaign. I don't think he wants to start some sort of fight with Trump in the middle of a domestic campaign.

So let's leave it to the ministers.

The coalition is claiming they would be better place to handle our relationship with the US. So how did the coalition fair dream last truck presidency?

Yeah, so, referring to Malcolm Turnbull, you know he often says that he got Trump's measure, even though you know there's the power of the United States presidency. He says he stood his ground and he's not afraid now that he's not Prime Minister anymore, to say that he is a bully.

Trump is a bully.

He encourages people to suck up to him, you know, notoriously. I didn't do that. I mean, that was partly my personality and partly circumstance.

But I think it was a good thing.

But you know, we certainly Dutton Peter Dutton says that the Coalition and Trump have a lot in common and

Karen, how much harm could Trump's love of tariffs end up doing, not just to America's training partners like Australia and China, but to the United States itself.

Well, I did speak to Justin Wolfis about it.

He's a professor of economics and public policy at the University of Michigan. He's an Australian who's used to be on President Biden's Bureau for Economic Research. He just says, we know exactly what he's doing in that these US threats are to get exactly what he wants. He's thoroughly protectionists, and so far it's working, so Canada, Mexico, and Colombia back down within days. But it's ultimately self defeating and

For four years.

Is that all Karen? Thank you so much for your time.

Thank you.

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