March 13, 2025 • 23 mins
The verdict is in: Australia will not be granted an exemption from US tariffs on steel and aluminium, despite hopes President Trump would look favourably on one of its most loyal allies and grant us one.
The news was greeted with dismay in Canberra, with the Prime Minister saying the decision the government giving a somewhat muted response, and the Opposition blaming it on the government.
So what does this mean for our relationship with our closest ally? Will the US impose more tariffs on us in the future? Did the government cock up the handling of this delicate diplomatic issue?
Plus we will delve into the strange case of the caravan-full of explosives and the fake terror plot. With both sides of politics accusing the other of weaponising this incident, who is in the right?
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Episode Transcript
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S1 (00:00):
From the newsrooms of the Sydney Morning Herald and The Age.
This is inside politics. I'm Jacqueline Maley, it's Friday, March 14th.
The verdict is in. Australia will not be granted an
exemption from US tariffs on steel and aluminium, despite hopes
that President Trump would look favourably on one of its
most loyal allies and grant us one.
S2 (00:20):
The white House, in just the last hour, ruling out
Australia's bid to be excluded from the 25% tax tariffs
come into effect today.
S1 (00:28):
But the news was greeted with dismay, with the Prime
Minister saying the decision was not a friendly act and
the opposition blaming it on the government, with Peter Dutton
saying Anthony Albanese had been weak and incompetent. They say
Albanese should have travelled to Washington to lobby Donald Trump
in person. So what does this mean for our relationship
with our closest ally? Will the US impose more tariffs
(00:50):
on us in the future? Did the government cock up
the handling of this delicate diplomatic issue? Plus, we will
delve into the strange case of the caravan full of
explosives and the fake terror plot with both sides of
politics accusing the other of weaponizing this incident. Who is
in the right? Joining me this week, we have chief
political correspondent David Crowe, as usual, and a very special
(01:12):
guest online from Washington. We have our US correspondent Michael Koziol.
Welcome to the pod, gentlemen.
S3 (01:19):
Hello, Jackie.
S4 (01:20):
Well, hello, Jackie. And hello, Michael.
S1 (01:22):
So thank you for making time for us. I just
want to get a sense of what it's like there
on the ground for you. When did you find out
about the tariff decision? How did you find out? Are
you talking to people in the administration, or is there
some sort of edict that is emailed? How does this
news get communicated?
S3 (01:36):
Look, it's a bit of a chaotic white House. There's
a lot of things happening very fast. So I wish
that I could say there was some smooth process for
engaging with it, but there really isn't. And I'm quite
new here. So, uh, whatever kind of back door tricks
there are, um, I wouldn't really know them yet, but
in this case, it just so happened that on that
(01:58):
Tuesday at 1:00, the white House press secretary, Caroline Leavitt,
was doing a press briefing. I went along to that.
There was another Australian reporter there, Carrington Clark from the ABC.
S5 (02:11):
Good afternoon everybody. Good afternoon. How are you? Good. I
let my staff get settled. There's a lot of news today,
so I look forward to taking your questions.
S3 (02:21):
It's a very packed briefing. I'm told that this is
a bit different to how things were under Joe Biden,
when perhaps media interest had waned a little bit by
the end. So the room is packed. It's standing room only.
You're very unlikely to get your question in the 30
or 40 minutes of the briefing, which was the case.
S5 (02:41):
And I'll see you guys later. Perhaps you'll see the
president in a Tesla later this afternoon. Have a good one. Thanks.
S3 (02:47):
So we decided to just go around the back and
poke our heads in to the press office. Uh, the
white House is very small, but it's quite accessible. So
you can just walk into the press secretary's office and
we said hello. And you know, what's the deal with
these tariffs, you know. Donald Trump said that he was
(03:07):
going to give great consideration to exempting Australia from the tariffs. Um,
what's his decision. And she was very clear and emphatic.
She said he's considered it and he's considered against it. Um,
there won't be any exemptions. Uh, you know, if you're
steelmakers want to move their operations to the US, then
they're welcome to do that. So that was how the
news broke.
S1 (03:28):
I mean, that's fascinating. I love that you just had
to kind of buttonhole the the white House press secretary
after her briefing. Um. Well done. What was the reaction
of the Australian diplomatic community in Washington? It wasn't unexpected,
but was it still a shock?
S3 (03:42):
Yeah. You're right. I mean, I think they were. And
we're just still, at the time of this recording, um,
we're trying to kind of glean a little bit more
information as to the exact sequencing of how this all
worked out, but I've seen a reporter that Kevin Rudd
was meeting with Howard Lutnick, the commerce secretary, uh, probably
earlier in the day on Tuesday. So that would have
(04:03):
been Tuesday morning, US time. Um, and, and, uh, left
that meeting, I think, with, with an understanding that we
almost certainly weren't going to be exempted. But perhaps, you know,
given that midnight hadn't come around yet, there was still,
you know, half a day left to, to, uh, give
it a go. And that was certainly what, you know,
the Australians were saying once we broke the story that,
(04:24):
you know, the Australian government was saying, hey, you know,
there's there's this is bad, but there's still time. Uh,
whereas the impression that we got from Caroline Leavitt, which,
you know, again, was quite clear, was that this decision
had already been made, there would be no exemptions. That
and let's remember here, these tariffs have already been essentially
written down in an executive order that is due to
(04:45):
that was due to start on this date. So in
fact there would have to be a new executive order
introducing these exemptions in order for that to be given.
So from the White House's point of view, it was
sort of like, hey, there's nothing to see here. We've
already said what we're going to do. Um, and we're
not changing it. So, you know, they were fairly, um,
you might say, blasé about it, even though it was
(05:07):
obviously a very big deal for the Australians.
S6 (05:10):
Tariffs and escalating trade tensions are a form of economic
self-harm and a recipe for slower growth and higher inflation.
They are paid by the consumers. This is why.
S1 (05:25):
And is there any chance the decision might be reversed?
S3 (05:28):
Well, I would say yes, because you never know what's
going to happen in this white House. I mean, look,
they've given no indication that that's going to happen, but
we've seen in the relationship with Canada that, you know,
things can change very quickly. I mean, on the same
day that this was all happening, Donald Trump was going
to double the tariffs on Canadian steel and aluminium to 50%,
(05:50):
and that lasted about three hours before, you know. The
Canadians reacted and then it was all off. So, you know, look, Donald.
Trump can always decide, um, based on a deal that
he makes that this is. An exemption is going to
be introduced or something's going to be reversed. At the moment,
there's no indication of that. But, you know, given the way.
(06:11):
That decisions are made in this white House, you would
just you would never rule it out.
S1 (06:15):
Mhm. Mhm. It's fascinating. I mean it is really actually
quite hard to keep track of this news now David,
what was the reaction from Canberra just briefly from the PM,
the foreign minister, the deputy Prime minister. I mean it
was it was pretty strong wasn't it.
S4 (06:27):
Actually I think it was you know cautious. They're not
happy with it. But I thought it was interesting that
Ed Husic, the industry minister, called it a dog act
by America. But Anthony Albanese didn't back in that comment
in quite as forceful a way he says it's disappointing.
I think what's been happening here is that behind the scenes,
(06:47):
whenever I've talked to people in the government, there's been
an expectation that there would be no exemption. As the
time went on, they were gloomier about getting an exemption
just because of the unpredictability of the white House and
the fact that there were no signals from any of
the people around Donald Trump, that they were going to
make the argument for Australia. Howard Lutnick being one of
(07:07):
the examples, you know, really singling Australia out as a
source of dumping in the American market so strongly against
Australia that's made it challenging for Anthony Albanese and for
Jim Chalmers as treasurer. But they didn't want to say publicly, look,
we're going to cop it here and there's not much
we can do about it because that looked defeatist. And
the public remarks are still words like, oh, we're going
(07:30):
to keep fighting. We're going to keep arguing, keep making
the case in the hope that we can get a
good outcome. So that's the public line for obvious reasons.
But behind the scenes look, they can see the way
Donald Trump works just like everybody can. And they didn't
have much hope of an exemption.
S1 (07:46):
Mhm. So what about the opposition. Because they've been much
stronger and they've basically blamed the government for this haven't they.
S4 (07:52):
Yeah. And the line from Peter Dutton is that he
could get a better deal.
S7 (07:55):
It's not just Australians who see the Prime Minister as
weak and incompetent. It's our trading partners as well. And
the sad reality is because of the Prime Minister's inability
to deal with this issue, Australian jobs are at risk
and Australian industry is at risk.
S4 (08:11):
And I think that's a very interesting line. When you
think that, is he really going to go to the
election saying I can get a better deal on tariffs
if you elect me prime minister? That's a very big call.
It's a very big promise to make and I think
it's an unlikely scenario.
S8 (08:25):
Have you called Donald Trump?
S7 (08:26):
I haven't I haven't as opposition leader, but I will
as prime minister and we'll get a deal done and
we'll make sure that we can protect jobs and protect industry,
because otherwise Australians are the ones who are going to
lose out under Mr. Albanese's inability to.
S4 (08:40):
That doesn't seem to be the way Donald Trump works here.
Donald Trump loves tariffs. The people around Donald Trump love tariffs.
The thing that's going to make a difference here is
the impact in America. When people see higher prices, that's
actually going to be the impact. The other impact, of course,
is what's happening on the share market with prices falling.
(09:01):
Donald Trump doesn't like that. I'm thinking about this for
my Friday column. Is there anybody in the world who
is as driven by money as Donald Trump? Like he
measures a lot of things by money.
S1 (09:14):
I think it's his only metric.
S4 (09:15):
And when the market is tanking, that sends him a message.
And I do wonder whether that would have an impact,
far more an impact on Trump than any lobbying from Australia.
S1 (09:25):
Mhm. Michael, is Australia potentially in line for further US
tariffs on other goods? Beef exports have been mentioned. I
notice in dispatches.
S3 (09:35):
Yes. Look I think that's certainly possible. So there's another
round of tariffs that are due to come in in
less than a month. What Donald Trump calls the reciprocal tariffs,
which is basically, in his parlance, you know what what
other countries charge us. We're now going to charge on
(09:56):
on them and rolled up in all of that is
the sort of, you know, bunch of other grievances that
the US may have with various countries, uh, you know,
non-tariff measures that a lot of countries have around protecting products,
particularly agriculture. And I must say, I'm not au fait
with what the rules around, um, Australian agriculture might be
(10:20):
and not, for example, letting you know US agricultural products
into the country. Um, David might have more detail about
some of that, but I mean, I do know, as
everyone who flies into the country knows, we're very, very
protective of our agriculture. Um, not only from a safety
point of view, but trying to protect the livelihoods of
our farmers, as is the US. And we don't really
(10:41):
know where that's going to land yet, and that's certainly
something that we need to try and find out over
the coming weeks. But there seem to be all sorts
of grievances. I've seen the Pharmaceutical Benefits Scheme mentioned as
one grievance that the US had when they were negotiating
the free trade agreement with Australia 20 years ago.
S1 (10:57):
Why is that? Whatever pharmaceuticals, the US exports to Australia
are subsidised and too cheap. I've never understood that.
S4 (11:05):
There's a government decision basically on subsidies for some pharmaceuticals
and not for others. And so I guess in that sense,
it's not completely open slather because a government advisory committee says, look, this,
this pharmaceutical is worth supporting and will subsidize it under
the PBS. And the Americans have got concerns with that.
But I think that that's a risky fight to pick,
(11:28):
because some of the subsidies are going to drugs sold
by American suppliers that helps them sell in Australia. So
if they want to pick a fight over that, maybe
they'll lose.
S1 (11:38):
But so the argument is that pharmaceuticals from other countries
are being subsidized, and that would prejudice US companies who've
got similar products on the market.
S4 (11:47):
Well, I think the subsidy from the Pharmaceutical Benefits Scheme
isn't country by country, it's product by product.
S1 (11:54):
Yeah.
S4 (11:54):
So I don't actually see the logic for the Americans
in picking a fight over it. But, you know.
S1 (12:01):
Yeah. Because us pharmaceutical companies would presumably take advantage of
it as well. I guess that's another fight that we're
going to see play out. I just I just want
to talk more broadly now. And I want to ask
you both both both about this. What does this tell
us more broadly about the reliability of the US as
an ally? There's been a lot of talk about Aukus
(12:21):
and how much we're going to be able to count
on the Americans now to deliver those submarines that we're
paying so very much money for and that we've already
put down. I think it's an $800 million down payment recently. Michael,
what are the implications more broadly?
S3 (12:36):
Well, we've paid $800 million just to help boost American
submarine building industry. That's before you know that that doesn't
bias any of the actual boats. We have to pay
for those separately. And we'll be paying another, uh, form.
I'll do the math for 100.
S1 (12:55):
We're journalists. We're not supposed to be good at maths.
S3 (12:57):
Well, we're paying another 4.2 billion towards that industry capacity
building before any boats even are put up for sale. Now, look,
I mean, Donald Trump won't be the one who makes
the decision on whether we ultimately get those boats. It
will be the president of the day in, you know,
the 2030s. But they will have the capacity to say, actually, no,
(13:21):
the US needs this boat and we're going to hold
on to it. So there's no guarantee in there that
we will get anything. And, uh, you know, look, in
terms of the broader question of the alliance, I think, uh,
you know, well, we've been shown where we stand, but
we're not alone there. Um, that, uh, that this administration
basically thinks everyone around the world, including our friends, has
(13:44):
been ripping us off for a long time. Um, and
we're now going to get our own back. That's that's
the basic view of the Trump White House. So they
will gladly say, you know, we'll take that 800 million.
We'll take the next 4.2 billion. And by the way,
you know, you need to up your defense spending to 3%
of GDP while you're at it. So, you know, they
(14:05):
don't even think that the 800 million we've given them
is enough, essentially. Um, they want us to be upping
our own, uh, defense spending to 3% of GDP, which
is a story that, um, our colleague, um, Matthew, not, uh,
broke last week. That's their view. And they basically think that, uh,
we and many other friends and allies of the US
(14:25):
haven't been paying our way and need to do so.
S1 (14:28):
Mhm. Chloe, what's your sense, particularly in Canberra, of how
much we can now rely on the United States as
an ally generally.
S4 (14:35):
Why would you listen to the United States telling us
to lift defense spending to 3% if they are an
unreliable ally? It doesn't make sense, does it? The whole
situation is forcing a rethink about the alliance. And I
think there is a, you know, an undeniable fact that
(14:56):
Aukus has made us more dependent on the United States
at the very time when the United States is less dependable.
And this is a really huge problem. But I think
it's quite separate from tariffs. The tariff, economic impact in
steel and aluminium is minimal. If there is a China
shock because of tariffs, that will hurt the Australian economy
(15:18):
big time. But at the moment we can actually navigate
this tariff dispute because it's focused on those industries. Look,
if it broadens to beef that's a problem. But aukus
is a is a huge question that's entirely separate. And
I know there are even ideas about going back to
the French and saying, look, remember that contract we tore up?
Is there another way to do it? I mean, that's
(15:39):
a pretty out there concept.
S1 (15:40):
Just go crawling back to Emmanuel Macron.
S4 (15:42):
But now people are canvassing these ideas because of what
Michael's pointed out with the Virginia class submarines. The Americans
may not want to sell them to us in the 2030s.
S1 (15:56):
Mhm. I want to just ask quickly, what's your sense
of the domestic political fallout, whether or not voters will
blame Albanese for the tariff decision as the coalition is,
you know, really trying to do, or will they just
sort of figure that's all part of the madness of
Trump 2.0 in the white House and give the government
a bit of a pass on it?
S4 (16:15):
It's really a gut, gut call at this point, but
everybody can see the unpredictability of Donald Trump, and Australians
generally don't like him. They would have preferred Kamala Harris
to be president. Clearly we polled that and we saw that.
At the same time, a lot of people think that
Peter Dutton is better able to handle Donald Trump. But
at the moment we've got Anthony Albanese saying that Peter
(16:39):
Dutton is being, in a sense, not on Team Australia.
By picking this domestic fight over the impact of the
Trump tariffs, will that play out in a way that
helps Anthony Albanese convince Australians that they need to back him,
rather than Peter Dutton, who labor is trying to pin
as a more Trump like candidate? I don't know whether
(17:02):
that will succeed, but that is the dynamic we're in
for in the election campaign.
S1 (17:06):
It's fascinating. Michael Koziol, you have a dinner to attend.
I hope you are going somewhere very glamorous. Have a
martini on us. Thank you for being such a champ.
S3 (17:16):
Thanks. See you buddy.
S1 (17:17):
See you soon. So, David, I want to talk about
a more domestic political conflict now, which is this fight
over the caravan full of explosives that was discovered in
Sydney in January, and the caravan also had a list
of synagogues and a note displaying anti-Semitic messages. And it
obviously put a lot of fear into the Jewish community.
(17:39):
But it was revealed this week that it was actually
a fake terror plot, designed not for sort of truly
antisemitic purposes, but to distract police resources away from organised
crime figures. How did this issue become politicised?
S4 (17:54):
There are a sequence of events, really, beginning with the
fact that it was leaked to the Daily Telegraph in Sydney.
They got a good story and good luck to them.
They reported the fact of the discovery of the caravan,
which hadn't been known until that point. And I'm not
going to get into the guessing game about their sources. Right.
They they reported a story that was newsworthy and they
(18:16):
got stuck into it. That then triggered a press conference
by New South Wales Premier Chris Minns and police officers
in Sydney, where they talked about this, and that's where
Chris Means made that fateful remark about how this was terrorism,
and it was potentially a mass casualty event.
S9 (18:35):
That anyone attempting terrorism, violence, hatred in our community will
be met with the full force of the law, that
there are massive.
S4 (18:44):
And things got very high alert from there. From then on.
Anthony Albanese backed in the terrorism word the next morning,
and then we saw Peter Dutton go very hard on
who knew what when.
S1 (18:58):
Yeah.
S7 (18:59):
The prime minister of our country wasn't notified for nine days,
ten days of what was believed to be the biggest
planned terrorist attack in our country, in our country's history.
S4 (19:12):
And it was apparent that Chris Minns had been told
about this caravan. But reading between the lines, it seems
that Anthony Albanese had not been told in the same
time frame at least.
S1 (19:22):
But now we know that the police actually knew very
early on. They say that this was not a genuine
anti-Semitic plot. That it was actually this sort of fake
terror plot by organized crime figures. So Tony Burke is
saying that Dutton basically refused to have briefings along those
lines and went around town talking about a terror plot,
even though he knew that it might very well not
(19:44):
be a genuine terror plot. Is that right?
S4 (19:46):
Peter Dutton never had the personal briefings that he could
have had from the AFP to establish what they knew,
where they could have told him in private what their
various lines of inquiry were. Now, they never ruled out
from the start terrorism. You know, it was a line
of inquiry, but this other option was also a line
of inquiry. And that was clear to us when we
(20:08):
spoke to officials. And it became even clearer when we
reported that the explosives were 40 years old and that
there was this theory about organized crime.
S1 (20:17):
Yeah. So there was a there was a seed of doubt,
a pretty strong seed of doubt there from the very beginning.
And although Dutton himself didn't attend the briefing. Members of
his staff did and senior ministers did. So I think
James Paterson, for example, who's the shadow home affairs, never modified.
S4 (20:32):
They never modified their line of attack. So we don't
know what they were told during those briefings. But even
now they're going hard saying that Anthony Albanese should have
been briefed immediately on this. But I have a real
problem with that because I don't think, given what we
know now, it actually reached a threshold that demanded instant
attention from the Prime minister. It was an organised crime plot.
S1 (20:55):
Yeah. Okay. So Tony Burke, Home Affairs Minister, has said
that Dutton leveraged the whole thing for political gain. Dutton
has hit back and said that actually, it's the government
who has politicised this. I just want to ask you
one thing in sort of wrapping this up, we know
that Dutton has been seen as not a particularly likeable leader,
at least in the past. And his reputation, reputation, whether
(21:15):
or not it's true, is someone who's very black and
white about the issues of immigration and sort of law
and order, you might say Some voters even think that
he might be cold or hard hearted. I'm interested in
your opinion whether or not you think this is going
to sort of cement that view for voters or for
some voters of Peter Dutton, or whether or not it's
just going to look like a shemozzle. And actually, the
(21:36):
Prime Minister himself looks weak because he didn't know what
was going on.
S4 (21:39):
Peter Dutton did go very hard for weeks on this,
and so there would have been a lot of attention
and a lot of publicity, and households would have seen
him talking up the threat from the caravan. The caravan
now turns out to be not an imminent threat to people.
So I think that will cost him in New South
(22:01):
Wales in particular. And New South Wales is a key
state for the coalition. They really need to make some
gains in New South Wales. They can't win that many
more seats in Queensland because they're so strong in Queensland.
It's Victoria and New South Wales that are going to
decide this election for the coalition. So I think as
a problem for Peter Dutton in New South Wales, it
does have political significance.
S1 (22:22):
Mhm. Okay. We've got to wrap up there. But it's
been a fascinating chat and we will see you again
next week David. And who knows what the news will
be next week particularly out of the white House.
S4 (22:32):
It's a wild ride.
S1 (22:33):
It is. Strap in. Thanks, David.
S4 (22:35):
See ya.
S1 (22:38):
Today's episode of Inside Politics was produced by Julia Carr Katzel,
with technical assistance from Debby Harrington and Josh towers. Our
executive producer is Tami Mills. Inside politics is a production
of The Age and The Sydney Morning Herald. To support
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Forward slash subscribe and sign up for our Inside Politics
(23:01):
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important news, analysis and insights into your inbox every week.
Links are in the show. Notes. I'm Jacqueline Maley, this
is Inside politics. Thank you for listening.
From the newsrooms of the Sydney Morning Herald and The Age.
This is inside politics. I'm Jacqueline Maley, it's Friday, March 14th.
The verdict is in. Australia will not be granted an
exemption from US tariffs on steel and aluminium, despite hopes
that President Trump would look favourably on one of its
most loyal allies and grant us one.
S2 (00:20):
The white House, in just the last hour, ruling out
Australia's bid to be excluded from the 25% tax tariffs
come into effect today.
S1 (00:28):
But the news was greeted with dismay, with the Prime
Minister saying the decision was not a friendly act and
the opposition blaming it on the government, with Peter Dutton
saying Anthony Albanese had been weak and incompetent. They say
Albanese should have travelled to Washington to lobby Donald Trump
in person. So what does this mean for our relationship
with our closest ally? Will the US impose more tariffs
(00:50):
on us in the future? Did the government cock up
the handling of this delicate diplomatic issue? Plus, we will
delve into the strange case of the caravan full of
explosives and the fake terror plot with both sides of
politics accusing the other of weaponizing this incident. Who is
in the right? Joining me this week, we have chief
political correspondent David Crowe, as usual, and a very special
(01:12):
guest online from Washington. We have our US correspondent Michael Koziol.
Welcome to the pod, gentlemen.
S3 (01:19):
Hello, Jackie.
S4 (01:20):
Well, hello, Jackie. And hello, Michael.
S1 (01:22):
So thank you for making time for us. I just
want to get a sense of what it's like there
on the ground for you. When did you find out
about the tariff decision? How did you find out? Are
you talking to people in the administration, or is there
some sort of edict that is emailed? How does this
news get communicated?
S3 (01:36):
Look, it's a bit of a chaotic white House. There's
a lot of things happening very fast. So I wish
that I could say there was some smooth process for
engaging with it, but there really isn't. And I'm quite
new here. So, uh, whatever kind of back door tricks
there are, um, I wouldn't really know them yet, but
in this case, it just so happened that on that
(01:58):
Tuesday at 1:00, the white House press secretary, Caroline Leavitt,
was doing a press briefing. I went along to that.
There was another Australian reporter there, Carrington Clark from the ABC.
S5 (02:11):
Good afternoon everybody. Good afternoon. How are you? Good. I
let my staff get settled. There's a lot of news today,
so I look forward to taking your questions.
S3 (02:21):
It's a very packed briefing. I'm told that this is
a bit different to how things were under Joe Biden,
when perhaps media interest had waned a little bit by
the end. So the room is packed. It's standing room only.
You're very unlikely to get your question in the 30
or 40 minutes of the briefing, which was the case.
S5 (02:41):
And I'll see you guys later. Perhaps you'll see the
president in a Tesla later this afternoon. Have a good one. Thanks.
S3 (02:47):
So we decided to just go around the back and
poke our heads in to the press office. Uh, the
white House is very small, but it's quite accessible. So
you can just walk into the press secretary's office and
we said hello. And you know, what's the deal with
these tariffs, you know. Donald Trump said that he was
(03:07):
going to give great consideration to exempting Australia from the tariffs. Um,
what's his decision. And she was very clear and emphatic.
She said he's considered it and he's considered against it. Um,
there won't be any exemptions. Uh, you know, if you're
steelmakers want to move their operations to the US, then
they're welcome to do that. So that was how the
news broke.
S1 (03:28):
I mean, that's fascinating. I love that you just had
to kind of buttonhole the the white House press secretary
after her briefing. Um. Well done. What was the reaction
of the Australian diplomatic community in Washington? It wasn't unexpected,
but was it still a shock?
S3 (03:42):
Yeah. You're right. I mean, I think they were. And
we're just still, at the time of this recording, um,
we're trying to kind of glean a little bit more
information as to the exact sequencing of how this all
worked out, but I've seen a reporter that Kevin Rudd
was meeting with Howard Lutnick, the commerce secretary, uh, probably
earlier in the day on Tuesday. So that would have
(04:03):
been Tuesday morning, US time. Um, and, and, uh, left
that meeting, I think, with, with an understanding that we
almost certainly weren't going to be exempted. But perhaps, you know,
given that midnight hadn't come around yet, there was still,
you know, half a day left to, to, uh, give
it a go. And that was certainly what, you know,
the Australians were saying once we broke the story that,
(04:24):
you know, the Australian government was saying, hey, you know,
there's there's this is bad, but there's still time. Uh,
whereas the impression that we got from Caroline Leavitt, which,
you know, again, was quite clear, was that this decision
had already been made, there would be no exemptions. That
and let's remember here, these tariffs have already been essentially
written down in an executive order that is due to
(04:45):
that was due to start on this date. So in
fact there would have to be a new executive order
introducing these exemptions in order for that to be given.
So from the White House's point of view, it was
sort of like, hey, there's nothing to see here. We've
already said what we're going to do. Um, and we're
not changing it. So, you know, they were fairly, um,
you might say, blasé about it, even though it was
(05:07):
obviously a very big deal for the Australians.
S6 (05:10):
Tariffs and escalating trade tensions are a form of economic
self-harm and a recipe for slower growth and higher inflation.
They are paid by the consumers. This is why.
S1 (05:25):
And is there any chance the decision might be reversed?
S3 (05:28):
Well, I would say yes, because you never know what's
going to happen in this white House. I mean, look,
they've given no indication that that's going to happen, but
we've seen in the relationship with Canada that, you know,
things can change very quickly. I mean, on the same
day that this was all happening, Donald Trump was going
to double the tariffs on Canadian steel and aluminium to 50%,
(05:50):
and that lasted about three hours before, you know. The
Canadians reacted and then it was all off. So, you know, look, Donald.
Trump can always decide, um, based on a deal that
he makes that this is. An exemption is going to
be introduced or something's going to be reversed. At the moment,
there's no indication of that. But, you know, given the way.
(06:11):
That decisions are made in this white House, you would
just you would never rule it out.
S1 (06:15):
Mhm. Mhm. It's fascinating. I mean it is really actually
quite hard to keep track of this news now David,
what was the reaction from Canberra just briefly from the PM,
the foreign minister, the deputy Prime minister. I mean it
was it was pretty strong wasn't it.
S4 (06:27):
Actually I think it was you know cautious. They're not
happy with it. But I thought it was interesting that
Ed Husic, the industry minister, called it a dog act
by America. But Anthony Albanese didn't back in that comment
in quite as forceful a way he says it's disappointing.
I think what's been happening here is that behind the scenes,
(06:47):
whenever I've talked to people in the government, there's been
an expectation that there would be no exemption. As the
time went on, they were gloomier about getting an exemption
just because of the unpredictability of the white House and
the fact that there were no signals from any of
the people around Donald Trump, that they were going to
make the argument for Australia. Howard Lutnick being one of
(07:07):
the examples, you know, really singling Australia out as a
source of dumping in the American market so strongly against
Australia that's made it challenging for Anthony Albanese and for
Jim Chalmers as treasurer. But they didn't want to say publicly, look,
we're going to cop it here and there's not much
we can do about it because that looked defeatist. And
the public remarks are still words like, oh, we're going
(07:30):
to keep fighting. We're going to keep arguing, keep making
the case in the hope that we can get a
good outcome. So that's the public line for obvious reasons.
But behind the scenes look, they can see the way
Donald Trump works just like everybody can. And they didn't
have much hope of an exemption.
S1 (07:46):
Mhm. So what about the opposition. Because they've been much
stronger and they've basically blamed the government for this haven't they.
S4 (07:52):
Yeah. And the line from Peter Dutton is that he
could get a better deal.
S7 (07:55):
It's not just Australians who see the Prime Minister as
weak and incompetent. It's our trading partners as well. And
the sad reality is because of the Prime Minister's inability
to deal with this issue, Australian jobs are at risk
and Australian industry is at risk.
S4 (08:11):
And I think that's a very interesting line. When you
think that, is he really going to go to the
election saying I can get a better deal on tariffs
if you elect me prime minister? That's a very big call.
It's a very big promise to make and I think
it's an unlikely scenario.
S8 (08:25):
Have you called Donald Trump?
S7 (08:26):
I haven't I haven't as opposition leader, but I will
as prime minister and we'll get a deal done and
we'll make sure that we can protect jobs and protect industry,
because otherwise Australians are the ones who are going to
lose out under Mr. Albanese's inability to.
S4 (08:40):
That doesn't seem to be the way Donald Trump works here.
Donald Trump loves tariffs. The people around Donald Trump love tariffs.
The thing that's going to make a difference here is
the impact in America. When people see higher prices, that's
actually going to be the impact. The other impact, of course,
is what's happening on the share market with prices falling.
(09:01):
Donald Trump doesn't like that. I'm thinking about this for
my Friday column. Is there anybody in the world who
is as driven by money as Donald Trump? Like he
measures a lot of things by money.
S1 (09:14):
I think it's his only metric.
S4 (09:15):
And when the market is tanking, that sends him a message.
And I do wonder whether that would have an impact,
far more an impact on Trump than any lobbying from Australia.
S1 (09:25):
Mhm. Michael, is Australia potentially in line for further US
tariffs on other goods? Beef exports have been mentioned. I
notice in dispatches.
S3 (09:35):
Yes. Look I think that's certainly possible. So there's another
round of tariffs that are due to come in in
less than a month. What Donald Trump calls the reciprocal tariffs,
which is basically, in his parlance, you know what what
other countries charge us. We're now going to charge on
(09:56):
on them and rolled up in all of that is
the sort of, you know, bunch of other grievances that
the US may have with various countries, uh, you know,
non-tariff measures that a lot of countries have around protecting products,
particularly agriculture. And I must say, I'm not au fait
with what the rules around, um, Australian agriculture might be
(10:20):
and not, for example, letting you know US agricultural products
into the country. Um, David might have more detail about
some of that, but I mean, I do know, as
everyone who flies into the country knows, we're very, very
protective of our agriculture. Um, not only from a safety
point of view, but trying to protect the livelihoods of
our farmers, as is the US. And we don't really
(10:41):
know where that's going to land yet, and that's certainly
something that we need to try and find out over
the coming weeks. But there seem to be all sorts
of grievances. I've seen the Pharmaceutical Benefits Scheme mentioned as
one grievance that the US had when they were negotiating
the free trade agreement with Australia 20 years ago.
S1 (10:57):
Why is that? Whatever pharmaceuticals, the US exports to Australia
are subsidised and too cheap. I've never understood that.
S4 (11:05):
There's a government decision basically on subsidies for some pharmaceuticals
and not for others. And so I guess in that sense,
it's not completely open slather because a government advisory committee says, look, this,
this pharmaceutical is worth supporting and will subsidize it under
the PBS. And the Americans have got concerns with that.
But I think that that's a risky fight to pick,
(11:28):
because some of the subsidies are going to drugs sold
by American suppliers that helps them sell in Australia. So
if they want to pick a fight over that, maybe
they'll lose.
S1 (11:38):
But so the argument is that pharmaceuticals from other countries
are being subsidized, and that would prejudice US companies who've
got similar products on the market.
S4 (11:47):
Well, I think the subsidy from the Pharmaceutical Benefits Scheme
isn't country by country, it's product by product.
S1 (11:54):
Yeah.
S4 (11:54):
So I don't actually see the logic for the Americans
in picking a fight over it. But, you know.
S1 (12:01):
Yeah. Because us pharmaceutical companies would presumably take advantage of
it as well. I guess that's another fight that we're
going to see play out. I just I just want
to talk more broadly now. And I want to ask
you both both both about this. What does this tell
us more broadly about the reliability of the US as
an ally? There's been a lot of talk about Aukus
(12:21):
and how much we're going to be able to count
on the Americans now to deliver those submarines that we're
paying so very much money for and that we've already
put down. I think it's an $800 million down payment recently. Michael,
what are the implications more broadly?
S3 (12:36):
Well, we've paid $800 million just to help boost American
submarine building industry. That's before you know that that doesn't
bias any of the actual boats. We have to pay
for those separately. And we'll be paying another, uh, form.
I'll do the math for 100.
S1 (12:55):
We're journalists. We're not supposed to be good at maths.
S3 (12:57):
Well, we're paying another 4.2 billion towards that industry capacity
building before any boats even are put up for sale. Now, look,
I mean, Donald Trump won't be the one who makes
the decision on whether we ultimately get those boats. It
will be the president of the day in, you know,
the 2030s. But they will have the capacity to say, actually, no,
(13:21):
the US needs this boat and we're going to hold
on to it. So there's no guarantee in there that
we will get anything. And, uh, you know, look, in
terms of the broader question of the alliance, I think, uh,
you know, well, we've been shown where we stand, but
we're not alone there. Um, that, uh, that this administration
basically thinks everyone around the world, including our friends, has
(13:44):
been ripping us off for a long time. Um, and
we're now going to get our own back. That's that's
the basic view of the Trump White House. So they
will gladly say, you know, we'll take that 800 million.
We'll take the next 4.2 billion. And by the way,
you know, you need to up your defense spending to 3%
of GDP while you're at it. So, you know, they
(14:05):
don't even think that the 800 million we've given them
is enough, essentially. Um, they want us to be upping
our own, uh, defense spending to 3% of GDP, which
is a story that, um, our colleague, um, Matthew, not, uh,
broke last week. That's their view. And they basically think that, uh,
we and many other friends and allies of the US
(14:25):
haven't been paying our way and need to do so.
S1 (14:28):
Mhm. Chloe, what's your sense, particularly in Canberra, of how
much we can now rely on the United States as
an ally generally.
S4 (14:35):
Why would you listen to the United States telling us
to lift defense spending to 3% if they are an
unreliable ally? It doesn't make sense, does it? The whole
situation is forcing a rethink about the alliance. And I
think there is a, you know, an undeniable fact that
(14:56):
Aukus has made us more dependent on the United States
at the very time when the United States is less dependable.
And this is a really huge problem. But I think
it's quite separate from tariffs. The tariff, economic impact in
steel and aluminium is minimal. If there is a China
shock because of tariffs, that will hurt the Australian economy
(15:18):
big time. But at the moment we can actually navigate
this tariff dispute because it's focused on those industries. Look,
if it broadens to beef that's a problem. But aukus
is a is a huge question that's entirely separate. And
I know there are even ideas about going back to
the French and saying, look, remember that contract we tore up?
Is there another way to do it? I mean, that's
(15:39):
a pretty out there concept.
S1 (15:40):
Just go crawling back to Emmanuel Macron.
S4 (15:42):
But now people are canvassing these ideas because of what
Michael's pointed out with the Virginia class submarines. The Americans
may not want to sell them to us in the 2030s.
S1 (15:56):
Mhm. I want to just ask quickly, what's your sense
of the domestic political fallout, whether or not voters will
blame Albanese for the tariff decision as the coalition is,
you know, really trying to do, or will they just
sort of figure that's all part of the madness of
Trump 2.0 in the white House and give the government
a bit of a pass on it?
S4 (16:15):
It's really a gut, gut call at this point, but
everybody can see the unpredictability of Donald Trump, and Australians
generally don't like him. They would have preferred Kamala Harris
to be president. Clearly we polled that and we saw that.
At the same time, a lot of people think that
Peter Dutton is better able to handle Donald Trump. But
at the moment we've got Anthony Albanese saying that Peter
(16:39):
Dutton is being, in a sense, not on Team Australia.
By picking this domestic fight over the impact of the
Trump tariffs, will that play out in a way that
helps Anthony Albanese convince Australians that they need to back him,
rather than Peter Dutton, who labor is trying to pin
as a more Trump like candidate? I don't know whether
(17:02):
that will succeed, but that is the dynamic we're in
for in the election campaign.
S1 (17:06):
It's fascinating. Michael Koziol, you have a dinner to attend.
I hope you are going somewhere very glamorous. Have a
martini on us. Thank you for being such a champ.
S3 (17:16):
Thanks. See you buddy.
S1 (17:17):
See you soon. So, David, I want to talk about
a more domestic political conflict now, which is this fight
over the caravan full of explosives that was discovered in
Sydney in January, and the caravan also had a list
of synagogues and a note displaying anti-Semitic messages. And it
obviously put a lot of fear into the Jewish community.
(17:39):
But it was revealed this week that it was actually
a fake terror plot, designed not for sort of truly
antisemitic purposes, but to distract police resources away from organised
crime figures. How did this issue become politicised?
S4 (17:54):
There are a sequence of events, really, beginning with the
fact that it was leaked to the Daily Telegraph in Sydney.
They got a good story and good luck to them.
They reported the fact of the discovery of the caravan,
which hadn't been known until that point. And I'm not
going to get into the guessing game about their sources. Right.
They they reported a story that was newsworthy and they
(18:16):
got stuck into it. That then triggered a press conference
by New South Wales Premier Chris Minns and police officers
in Sydney, where they talked about this, and that's where
Chris Means made that fateful remark about how this was terrorism,
and it was potentially a mass casualty event.
S9 (18:35):
That anyone attempting terrorism, violence, hatred in our community will
be met with the full force of the law, that
there are massive.
S4 (18:44):
And things got very high alert from there. From then on.
Anthony Albanese backed in the terrorism word the next morning,
and then we saw Peter Dutton go very hard on
who knew what when.
S1 (18:58):
Yeah.
S7 (18:59):
The prime minister of our country wasn't notified for nine days,
ten days of what was believed to be the biggest
planned terrorist attack in our country, in our country's history.
S4 (19:12):
And it was apparent that Chris Minns had been told
about this caravan. But reading between the lines, it seems
that Anthony Albanese had not been told in the same
time frame at least.
S1 (19:22):
But now we know that the police actually knew very
early on. They say that this was not a genuine
anti-Semitic plot. That it was actually this sort of fake
terror plot by organized crime figures. So Tony Burke is
saying that Dutton basically refused to have briefings along those
lines and went around town talking about a terror plot,
even though he knew that it might very well not
(19:44):
be a genuine terror plot. Is that right?
S4 (19:46):
Peter Dutton never had the personal briefings that he could
have had from the AFP to establish what they knew,
where they could have told him in private what their
various lines of inquiry were. Now, they never ruled out
from the start terrorism. You know, it was a line
of inquiry, but this other option was also a line
of inquiry. And that was clear to us when we
(20:08):
spoke to officials. And it became even clearer when we
reported that the explosives were 40 years old and that
there was this theory about organized crime.
S1 (20:17):
Yeah. So there was a there was a seed of doubt,
a pretty strong seed of doubt there from the very beginning.
And although Dutton himself didn't attend the briefing. Members of
his staff did and senior ministers did. So I think
James Paterson, for example, who's the shadow home affairs, never modified.
S4 (20:32):
They never modified their line of attack. So we don't
know what they were told during those briefings. But even
now they're going hard saying that Anthony Albanese should have
been briefed immediately on this. But I have a real
problem with that because I don't think, given what we
know now, it actually reached a threshold that demanded instant
attention from the Prime minister. It was an organised crime plot.
S1 (20:55):
Yeah. Okay. So Tony Burke, Home Affairs Minister, has said
that Dutton leveraged the whole thing for political gain. Dutton
has hit back and said that actually, it's the government
who has politicised this. I just want to ask you
one thing in sort of wrapping this up, we know
that Dutton has been seen as not a particularly likeable leader,
at least in the past. And his reputation, reputation, whether
(21:15):
or not it's true, is someone who's very black and
white about the issues of immigration and sort of law
and order, you might say Some voters even think that
he might be cold or hard hearted. I'm interested in
your opinion whether or not you think this is going
to sort of cement that view for voters or for
some voters of Peter Dutton, or whether or not it's
just going to look like a shemozzle. And actually, the
(21:36):
Prime Minister himself looks weak because he didn't know what
was going on.
S4 (21:39):
Peter Dutton did go very hard for weeks on this,
and so there would have been a lot of attention
and a lot of publicity, and households would have seen
him talking up the threat from the caravan. The caravan
now turns out to be not an imminent threat to people.
So I think that will cost him in New South
(22:01):
Wales in particular. And New South Wales is a key
state for the coalition. They really need to make some
gains in New South Wales. They can't win that many
more seats in Queensland because they're so strong in Queensland.
It's Victoria and New South Wales that are going to
decide this election for the coalition. So I think as
a problem for Peter Dutton in New South Wales, it
does have political significance.
S1 (22:22):
Mhm. Okay. We've got to wrap up there. But it's
been a fascinating chat and we will see you again
next week David. And who knows what the news will
be next week particularly out of the white House.
S4 (22:32):
It's a wild ride.
S1 (22:33):
It is. Strap in. Thanks, David.
S4 (22:35):
See ya.
S1 (22:38):
Today's episode of Inside Politics was produced by Julia Carr Katzel,
with technical assistance from Debby Harrington and Josh towers. Our
executive producer is Tami Mills. Inside politics is a production
of The Age and The Sydney Morning Herald. To support
our journalism, subscribe to us by visiting The Age or smh.com.au.
Forward slash subscribe and sign up for our Inside Politics
(23:01):
newsletter to receive a comprehensive summary of the week's most
important news, analysis and insights into your inbox every week.
Links are in the show. Notes. I'm Jacqueline Maley, this
is Inside politics. Thank you for listening.
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