Australian exporters will be hit with US tariffs immediately on Donald Trump’s self-proclaimed “liberation day”, but the White House has left the door open to “good negotiation” to have them rolled back or amended.
The US president was expected to announce new global reciprocal tariffs at 4pm on Wednesday Washington DC time (7am Thursday AEDT), but the details remained largely unknown.
Australian pharmaceuticals, meat exports and other agricultural products were potential targets of the new tariff regime, though the minister for employment and workplace relations, Murray Watt, said on Wednesday morning the government had no information on which products would be subjected to the new tariffs, or at what rate.
The prime minister said on Tuesday that Australia’s Pharmaceutical Benefits Scheme (PBS), and its biosecurity regime – declared irritants of the US administration – were not up for negotiation.
On Wednesday, Anthony Albanese said his government was in daily discussion with the US administration over the new tariff regime and was prepared for “whatever outcome is determined”.
“I continue to stand up for Australia and have said very clearly we won’t compromise and negotiate on our PBS, on our biosecurity, on our media bargaining code. I will stand up for Australia.”
Those comments were echoed by the foreign affairs minister, Penny Wong, who said: “We are not willing to trade away the things that make Australia the best country in the world, like our healthcare system.”
But she told the ABC the government was “realistic” about the apparent inevitability of US tariffs. “We’ll keep working hard for the best outcome,” she said.
Speaking on the election campaign trail on Wednesday morning, the opposition leader, Peter Dutton, said Albanese had been “weak” in defending Australia’s interests against America.
“I don’t care whether it is President Trump or any other … leader, my job is to stand up for Australians and I have the strength and experience to be able to do that.”
The Trump administration has said it would impose reciprocal tariffs on countries that put “unfair” charges on imported American goods, seeking to level the global trading field after what it says are decades of imbalance.
“These countries have been ripping off our country for far too long and they’ve made their disdain for the American worker quite clear,” the White House press secretary, Karoline Leavitt, told a briefing in Washington on Wednesday morning Australian time.
Leavitt confirmed the tariffs would take effect as soon as they were announced, but said the details were still being worked out.
“He [Trump] is with his trade and tariff team right now, perfecting it to make sure this is a perfect deal for the American people and the American worker, and you will all find out in about 24 hours from now,” Leavitt said.
“They will be effective immediately, and the president has been teasing this for quite some time.”
Economists have predicted the tariffs will damage the US and global economy, are likely to drive up inflation, and may spark a transnational trade war. A report from Aston Business School has forecast a full-scale trade conflict of protectionist retaliation could result in a US$1.4tn global welfare loss.
But Leavitt indicated the US would be willing to consider amending the tariffs after they had been imposed. Trump has already sought to use tariffs as leverage to pursue foreign policy goals, such as seeking to stem the flow of illegal fentanyl across US borders from Canada and Mexico.
“Certainly, the president is always up to take a phone call, always up for a good negotiation, but he is very much focused on fixing the wrongs of the past and showing that American workers have a fair shake,” Leavitt said.
In Trump’s first administration, Australia secured exemptions from tariffs after arguing that Australia ran a trade deficit with America, had a signed and ratified free trade agreement, and was a committed ally and security partner.
But Trump’s second administration has repeatedly said the president regrets the exemptions he gave to Australia in his first term, particularly for the precedent they set for other countries claiming similar carve-outs.
Earlier this week, the office of the US trade representative released its annual report on “foreign trade barriers”, listing Australia’s biosecurity regime on importing beef, pork and poultry from US producers as a major grievance.
The trade body also took issue with Australia offering generic drugs at lower prices without notifying US patent owners, and plans to strengthen laws forcing foreign social media companies to pay Australian media companies for news.
Pharmaceuticals, one of the US’s most significant exports to Australia, attracted particular attention.
Last month, the Pharmaceutical Research and Manufacturers of America (PHrMA) industry lobby group wrote to the Trump administration’s trade representative condemning Australia’s $18bn PBS, which subsidises medicines for Australians.
In its submission, PHrMA said the PBS was “egregious and discriminatory”, and urged the US to “use all available trade enforcement tools to eliminate the unfair and non-reciprocal trade practices”.
