Australian government ministers still in the dark on tariffs as White House dangles hope of ‘good negotiation’ with president
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 is expected to announce new global reciprocal tariffs at 4pm on Wednesday Washington DC time (7am Thursday AEDT), but the details remain largely unknown.
Australian pharmaceuticals, meat exports and other agricultural products are potential targets of the new tariff regime, though the trade minister, 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 has said Australia’s pharmaceutical benefits scheme, and its biosecurity regime – declared irritants of the US administration – were not up for negotiation: “not on my watch,” he said Tuesday.
Those comments were echoed on Wednesday morning by the foreign 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. “We don’t want the Americanisation of our healthcare system. We won’t be weakening our biosecurity laws, and we won’t be trading away our PBS.”
The Trump administration says it is imposing 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 trans-national 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 a 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, has 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 Pharmaceutical Benefits Scheme (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”.
The prime minister, Anthony Albanese, said on Tuesday Australia’s pharmaceutical benefits scheme, its biosecurity laws around imports, and media regulations, were “not up for negotiation”.
“The idea that we would weaken biosecurity laws is like cutting off your nose to spite your face. In order to defend the exports that total less than 5% of Australia’s exports, you undermine our biosecurity system. Not on my watch,” the prime minister, currently running for re-election, told reporters on the campaign trail.
“I have very clearly indicated Australia is not negotiating over the Pharmaceutical Benefits Scheme. We are not negotiating over the news bargaining code. We will not undermine our biosecurity.”
The trade minister, Murray Watt, told Sky News on Wednesday the Australian government still had no information on which products would be subjected to new tariffs.
“The expectation is that decisions will come through tomorrow,” he said. “But we’re certainly concerned about the risk of more tariffs being imposed on Australian industry, whether it be farmers or anyone else, and that’s why we have been standing strong and taking it up to the Trump administration, arguing for Aussie farmers and arguing for Aussie industry.”