April 3, 2025 • 15 mins
Yesterday, US President Donald Trump officially announced his "Liberation Day" tariffs and reciprocal tariffs on all imports into America. This includes a blanket 10% tax on all Australian goods entering America, ending 20 years of tariff-free trade between our nations under a Free Trade Agreement. It comes in the first week of Australia’s federal election campaign period, with both the PM and Opposition leader explaining to Australians how they would approach our changing relationship with the US.
In today's podcast, we will explain precisely what these tariffs are, why they're being introduced, and what they mean for Australia's economy and our relationship with one of our closest allies.
Hosts: Sam Koslowski and Zara Seidler
Producer: Orla Maher
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Already and this is this is the Daily Oh, this
is the Daily oas Oh, now it makes sense. Good
morning and welcome to the Daily OS. It's Friday, the
fourth of April. I'm Sam Kozlowski.
Speaker 2 (00:19):
I'm Zara Sidler.
Speaker 1 (00:20):
Yesterday, US President Donald Trump officially announced his Liberation Day
tariffs and reciprocal tariffs on all imports into America. This
includes a blankert ten percent tax on all Australian goods
entering America, ending twenty years of tariff free trade between
our nations under a free trade agreement. Now, all of
this comes in the first week of Australia's federal election
(00:43):
campaign period, with both the PM and the Opposition leader
explaining to Australians how they would approach our changing relationship
with the US. This is a pretty significant economic shift
that is going to impact Australia's economy, with some industries
to be hit harder than others, is based on how
much they actually export to America. In today's podcast, we're
(01:04):
going to explain precisely what these tariffs actually are, why
they're being introduced, and what they mean for Australia's economy,
but more importantly, our relationship with the US SAM.
Speaker 2 (01:18):
As you've already foreshadowed, this is a huge economics story.
It's going to fundamentally change economies around the world. And
before we go into what Donald Trump's announcement actually is
and what it means, can we just take a step back,
give me a high level definition. What are tariffs and
what are they intended to do?
Speaker 1 (01:37):
It's the TDA way, isn't it. To just get off
the bat. Understand the term we're talking about. So, a
tariff is a tax on imports. When foreign made goods
are brought into a country, the importer of those goods
has to pay at tax, and the tax is collected
by officers at the border. So literally, picture somebody at
a shipping dock in the US collecting a payment to
(01:57):
allow a shipment of goods to come in from earlier. Now,
tariffs can serve a couple of purposes. They can make
imported goods more expensive, and that encourages citizens and businesses
to buy locally produced alternatives instead. They also, of course,
generate a whole new stream of revenue for the governments
that collect them.
Speaker 2 (02:17):
Okay, And so there are a bunch of different reasons
why tariffs might be imposed. There might be dear political reasons,
there might be economic reasons. What is the justification here
from Donald Trump as to why he is implementing these tariffs.
Speaker 1 (02:30):
So, Trump has consistently campaigned on bringing manufacturing jobs back
to America and reducing trade deficits with other countries, and
the trade deficit essentially means that another country is making
more from its trade relationship with America than America is
with them. Now, in his own words during the Liberation
Day announcement yesterday, Trump said, for decades, our country has
(02:51):
been looted, pillaged, raped, and plundered by nations near and far,
both friend and foe alike.
Speaker 2 (02:57):
Wow.
Speaker 1 (02:57):
Now. One phrase that was particularly powerful yesterday was Trump's
description of the day as America's declaration of economic independence. Ultimately,
the White House believes that they're going to have significant
financial gains from this, and they're going to protect domestic
industries and force other countries to lower their tariffs on
American goods. Now. It's worth noting that many economists disagree
(03:20):
with this assessment. They argue that tariffs often lead to
higher prices for consumers.
Speaker 2 (03:25):
And American consumers.
Speaker 1 (03:26):
There exactly, and also for everyone around the world. It
could lead to trade wars that harm global economic growth.
Speaker 2 (03:34):
But obviously that's not the way that Donald Trump sees it.
He's really positioning this as an America first. You know,
even the language of Liberation Day, the day that he
announced these tariffs, all of that is very deliberate language.
Can you talk me through the exact announcement that we
had from Trump yesterday?
Speaker 1 (03:51):
So we had a couple of weeks ago an announcement
that there would be an announcement, and so there was
a type of announcement. There was a foreshadowing of Liberation Day.
We didn't really have details.
Speaker 2 (04:00):
Day is a really fascinating term.
Speaker 1 (04:02):
It's so interesting to think about the theater of it all.
Even in the way that the ceremony was staged. It
was a major event really at the White House. We
didn't have many details. We knew it would be relating
to tariffs. Countries all around the world were trying to
almost preempt what these tariffs would be, arrange meetings with
the White House to try and negotiate separate agreements in
(04:24):
case it was globally applied. Sure enough, in this big
ceremony on the White House lawn, Trump officially signed an
Executive Order implementing global tariffs. So not one country outside
the US was given an exemption, and the baseline is
ten percent tariffs on all imports into the US and
that is going to affect Australia. And we'll talk through
(04:45):
how in a minute.
Speaker 2 (04:46):
So just quickly, if you're an Australian business and you're
exporting let's say, beef from the country into America, that's
now going to be hit with ten percent.
Speaker 1 (04:56):
Tax exactly, okay, and in many respects, and we can
talk through this a bit more in a sect. That's
actually the lighter end of the deal because a lot
of other countries have been hit by what Donald Trump
is calling reciprocal tariffs.
Speaker 2 (05:09):
Just explain quickly what you mean by reciprocal tariffs.
Speaker 1 (05:12):
So basically, those are tariffs on top of tariffs only
for countries that have existing limitations on what American goods
can be imported into those countries. So I'll give you
an example, please do so China. Yeah, there's currently a
sixty seven percent tariff on US goods that enter China.
So for US exporter is sending stuff to Beijing. So
(05:33):
Trump has applied a reciprocal tariff of thirty four percent
on all Chinese goods that come into the US, on
top of the twenty percent that he's already announced. So
Chinese goods now will face a fifty four percent tariff.
That's a huge markup for American importers who want to
import stuff from China, where a lot of goods and
(05:54):
services are made. They're not the only ones that EU
will pay an extra twenty percent on top of the baseline.
Countries like India and Japan are going to pay twenty
six and twenty four percent. And Trump said these reciprocal
tariffs were flexible, but not in the good way. He
said that should countries that have reciprocal tariffs applied to
them increase their tariffs on US goods in return to
(06:15):
match it, he's going to raise US tariffs. And that
quite simply is the beginning of a trade war.
Speaker 2 (06:20):
Okay, So my understanding reciprocal tariffs is tit for TAD.
Speaker 1 (06:25):
That's my comprehension. That's essentially the way it's going to work.
Speaker 2 (06:28):
Yeah, it's really interesting, But I think it's also interesting
to remember that certain countries, you know, their whole economies
are based on their exports. That you know, this will
have different implications for different countries. I do want to
just bring this domestically though, because, as you said at
the top, we are affected. Every single country is affected.
(06:48):
Does Australia currently have any tariffs on US goods? Like,
are we in this kind of reciprocal relationship here?
Speaker 1 (06:56):
We don't have any tariffs on US goods. However, we
do have some restrictions on importing certain products from America.
And one example that you mentioned already is beef. So
Australia has a policy that doesn't allow beef imports from
the US. But that's because of strict Australian biosecurity laws,
not necessarily.
Speaker 2 (07:15):
Because those ads on the plane when you're landing.
Speaker 1 (07:17):
Exactly think of the ad on the plane. So Australia
is going to get still that ten percent baseline tariff
even though we don't reciprocate that the other way, and.
Speaker 2 (07:28):
We don't reciprocate that the other way, or we haven't traditionally,
because we've had a free trade agreement which has meant
that we don't have tariffs.
Speaker 1 (07:35):
Exactly, and that's been in place since two thousand and five,
and that's really important in terms of how we understand
what this will change in the relationship between Australia and
the US. I mean, this is a relationship that, sure
there's that free trade agreement, but there's also a lot
of shared defense goals and projects orcus the Quad. So
(07:55):
there's some really interesting days and weeks ahead in terms
of these two friends in the Australia in the US.
Now there's a bit of a strain on that relationship.
Speaker 2 (08:03):
Yeah, and we know that Anthony Alberzi unsuccessfully reached out
to Donald Trump for a meeting before the tariffs were announced,
as I'm sure many other world leaders did, but Australia
did actually get a mention in the Liberation Day speech. Yeah,
it's not since Joe Biden forgot the name of Scott
Morrison that we were this front and center in a
(08:26):
kind of global news event. Talk to me about it.
Speaker 1 (08:28):
Well, it was interesting because there wasn't sort of paperwork
released by the White House before the announcement. There was
one moment where Trump brought out a big placard that
had the tariffs being applied to certain countries. I actually
started zooming in on my screen to figure out how
Australia would be impacted, and it wasn't on that board,
but he did mention us by name. He mentioned us
in relation to beef. Yeah, he said, they, being Australia,
(08:50):
won't take any of our beef. They don't want it
because they don't want it to affect their farmers. And
you know, I don't blame them, because we're doing the
same thing right now.
Speaker 2 (08:58):
Now.
Speaker 1 (08:58):
There was a bit of confusion about whether this meant
Trump would impose a reciprocal ban on Australian beef. Remember
I said we ban American beef. The government has since
confirmed the Australian meat is going to be subject to
that ten percent tariff, not a full ban, okay, but
that is still very concerning for our beef industry. The
US is one of our major export markets there and
(09:19):
Australian beef, as you mentioned, has been tariff free in
the US since two thousand and five. So this is
a significant change.
Speaker 2 (09:27):
Yeah, And we've spoken about beef now FA a few
times on this podcast because it is going to be
one of the hardest hit industries. What are some of
the other industries that we can expect to feel the
impact the most from this tariff announcement?
Speaker 1 (09:41):
So beef is the top export to the US. Then
you've got metals, including gold, where a big exporter of
metals used for coins from American coins. You've got pharmaceuticals
and you've got medical equipment, and those sectors are all
going to be hit by that ten percent tariff. And
it is worth noting on top of the ten percent
that steel and aluminium were already hit by a twenty
(10:02):
five percent tariff earlier this year, so there's going to
be now a bit of a compounding factor there. I
think pharmaceuticals and medical equipment is going to be an
interesting one because they're quite sensitive to price changes, and
so it's going to be interesting to see if there's
Australian pharmaceutical companies that are really impacted if American customers
start not ordering their products.
Speaker 2 (10:24):
Okay, so just to summarize what you've just said, our
top import to the US is beef. That's going to
be hit by the ten percent tariff, the same as
everything else. The other industries are metals, pharmaceuticals, and medical equipment.
Speaker 1 (10:39):
Is that right exactly?
Speaker 2 (10:40):
And then on top of that we know that there
are already existing tariffs, that twenty five percent tariff on
aluminium and steal exports. Yeah, that we've spoken about before
on this part, So it's going to be widespread, Okay,
I understand, and clearly that will have an impact on
our local economy. How have Australian leaders respond to the news.
Speaker 1 (11:00):
Well, all of this is coming in the first week
of the campaign trail and it's been a really interesting
exercise where journalists in the press gallery, but also I
think all voting Australians could look at these two leaders
to see how they would respond to a significant curve ball.
Why don't we start with what everybody had in common?
So both Prime minist anth and the Auberneazy and Opposition
(11:22):
Leader Peter Dutton expressed concern about the tariffs. The PM
said quite directly he was critical and said this is
not the act of a friend and pointed out that
the reciprocal tariff would be zero, not ten percent, given
Australia's free trade agreement with the US. Then we heard
from Opposition leader Peter Dudden. He said this is not
the treatment Australians deserve. He said the Coalition could have
(11:45):
achieved a different outcome on tariffs had they been in
government now, and he was particularly critical of the fact
as you mentioned that the PM has failed to secure
a phone call with President Trump within the past two weeks.
Speaker 2 (11:59):
Yeah, I mean, probably not what they wanted on their
bingo cards for this election campaign, but a really interesting
one to keep an eye on. We've obviously focused here
a lot on trade because that's the kind of clear
area that will be most affected, but we do have
partnerships outside of trade. Of course, we have defense partnerships
We've mentioned Orcus for one. What impacts will this have
(12:22):
on those sorts of relationships.
Speaker 1 (12:24):
Well, it's going to be hard to tell until we
get a real response from the government on if they
would like to use the fact that America has defense
bases in Australia or use the fact that you know,
we are a close ally for them in terms of
America keeping an eye on China as leverage to trying
to get those tariffs reduced. And you have to remember
(12:45):
that this is a broad relationship, and in fact, America's
got multifacted relationships with most countries around the world, And
you're right, trade is just one aspect of this, and
I wouldn't be surprised to see countries retaliating in ways
that are not about trade. Could be about shared defense resources,
it could be about technology and intelligence. But the most
(13:05):
important thing I think to take out of this is
the signal from the US government that even close security
partners aren't exempt from these sorts of penalties.
Speaker 2 (13:15):
Sam, I do just want to end by asking, and
you might not know the answer to this, but what
sort of options does Australia have in its back pocket,
no matter who the leader, no matter who the government
of the day is, what sort of options do we
have when responding to tariff announcements like this?
Speaker 1 (13:32):
Well, I guess, to use your phrasing earlier, Zara, in
the tit for tat kind of battle here, we could
hit them back with what they've hit us with and
do our own retaliatory tariffs. The Prime Minister was asked
about that yesterday. He said that he would not do
that and that it would create what he called a
race to the bottom. He pointed out that Australia's trade
(13:53):
with the US only accounts for about five percent of
our exports overall, and that the strength of Australia's economy
is in the fact that we have diverse trading relationships. Now,
what that ignores is the fact that it could be
the weakening of other economies that we're much more reliant on,
think China, India, Vietnam. If they become weaker because of
a damaged relationship with us, we're going to feel that indirectly.
(14:16):
The biggest option available for the government is to try
and solve this diplomatically, and they're going to try and
negotiate exemptions based on the things that we've talked about,
the strong relationships economically, but also in terms of defense.
The Trade Minister Don Farrell he already indicated he'll be
reaching out to his American counterparts, and Australia's ambassador to
(14:37):
the US, former Prime Minister Kevin Rudd, is definitely going
to be working the phone to try and figure out
how to get a negotiation meeting at the White House.
Speaker 2 (14:45):
In the diary, so interesting, Sam, Thank you for taking
us through that, so explaining everything we need to know,
and thank you for joining us on this episode of
The Daily OS that wraps up another week of Deep Dives.
We love giving you the news. We hope you love
this listening to it. We'll be back later today with
the headlines, but until then, have a great Friday.
Speaker 1 (15:08):
My name is Lily Maddon. And I'm a proud Arunda
Bungelung Kalgatin woman from Gadighl country. The Daily oz acknowledges
that this podcast is recorded on the lands of the
Gadighl people and pays respect to all.
Speaker 2 (15:20):
Aboriginal and torrest Rate island and nations.
Speaker 1 (15:23):
We pay our respects to the first peoples of these countries,
both past and present.
Already and this is this is the Daily Oh, this
is the Daily oas Oh, now it makes sense. Good
morning and welcome to the Daily OS. It's Friday, the
fourth of April. I'm Sam Kozlowski.
Speaker 2 (00:19):
I'm Zara Sidler.
Speaker 1 (00:20):
Yesterday, US President Donald Trump officially announced his Liberation Day
tariffs and reciprocal tariffs on all imports into America. This
includes a blankert ten percent tax on all Australian goods
entering America, ending twenty years of tariff free trade between
our nations under a free trade agreement. Now, all of
this comes in the first week of Australia's federal election
(00:43):
campaign period, with both the PM and the Opposition leader
explaining to Australians how they would approach our changing relationship
with the US. This is a pretty significant economic shift
that is going to impact Australia's economy, with some industries
to be hit harder than others, is based on how
much they actually export to America. In today's podcast, we're
(01:04):
going to explain precisely what these tariffs actually are, why
they're being introduced, and what they mean for Australia's economy,
but more importantly, our relationship with the US SAM.
Speaker 2 (01:18):
As you've already foreshadowed, this is a huge economics story.
It's going to fundamentally change economies around the world. And
before we go into what Donald Trump's announcement actually is
and what it means, can we just take a step back,
give me a high level definition. What are tariffs and
what are they intended to do?
Speaker 1 (01:37):
It's the TDA way, isn't it. To just get off
the bat. Understand the term we're talking about. So, a
tariff is a tax on imports. When foreign made goods
are brought into a country, the importer of those goods
has to pay at tax, and the tax is collected
by officers at the border. So literally, picture somebody at
a shipping dock in the US collecting a payment to
(01:57):
allow a shipment of goods to come in from earlier. Now,
tariffs can serve a couple of purposes. They can make
imported goods more expensive, and that encourages citizens and businesses
to buy locally produced alternatives instead. They also, of course,
generate a whole new stream of revenue for the governments
that collect them.
Speaker 2 (02:17):
Okay, And so there are a bunch of different reasons
why tariffs might be imposed. There might be dear political reasons,
there might be economic reasons. What is the justification here
from Donald Trump as to why he is implementing these tariffs.
Speaker 1 (02:30):
So, Trump has consistently campaigned on bringing manufacturing jobs back
to America and reducing trade deficits with other countries, and
the trade deficit essentially means that another country is making
more from its trade relationship with America than America is
with them. Now, in his own words during the Liberation
Day announcement yesterday, Trump said, for decades, our country has
(02:51):
been looted, pillaged, raped, and plundered by nations near and far,
both friend and foe alike.
Speaker 2 (02:57):
Wow.
Speaker 1 (02:57):
Now. One phrase that was particularly powerful yesterday was Trump's
description of the day as America's declaration of economic independence. Ultimately,
the White House believes that they're going to have significant
financial gains from this, and they're going to protect domestic
industries and force other countries to lower their tariffs on
American goods. Now. It's worth noting that many economists disagree
(03:20):
with this assessment. They argue that tariffs often lead to
higher prices for consumers.
Speaker 2 (03:25):
And American consumers.
Speaker 1 (03:26):
There exactly, and also for everyone around the world. It
could lead to trade wars that harm global economic growth.
Speaker 2 (03:34):
But obviously that's not the way that Donald Trump sees it.
He's really positioning this as an America first. You know,
even the language of Liberation Day, the day that he
announced these tariffs, all of that is very deliberate language.
Can you talk me through the exact announcement that we
had from Trump yesterday?
Speaker 1 (03:51):
So we had a couple of weeks ago an announcement
that there would be an announcement, and so there was
a type of announcement. There was a foreshadowing of Liberation Day.
We didn't really have details.
Speaker 2 (04:00):
Day is a really fascinating term.
Speaker 1 (04:02):
It's so interesting to think about the theater of it all.
Even in the way that the ceremony was staged. It
was a major event really at the White House. We
didn't have many details. We knew it would be relating
to tariffs. Countries all around the world were trying to
almost preempt what these tariffs would be, arrange meetings with
the White House to try and negotiate separate agreements in
(04:24):
case it was globally applied. Sure enough, in this big
ceremony on the White House lawn, Trump officially signed an
Executive Order implementing global tariffs. So not one country outside
the US was given an exemption, and the baseline is
ten percent tariffs on all imports into the US and
that is going to affect Australia. And we'll talk through
(04:45):
how in a minute.
Speaker 2 (04:46):
So just quickly, if you're an Australian business and you're
exporting let's say, beef from the country into America, that's
now going to be hit with ten percent.
Speaker 1 (04:56):
Tax exactly, okay, and in many respects, and we can
talk through this a bit more in a sect. That's
actually the lighter end of the deal because a lot
of other countries have been hit by what Donald Trump
is calling reciprocal tariffs.
Speaker 2 (05:09):
Just explain quickly what you mean by reciprocal tariffs.
Speaker 1 (05:12):
So basically, those are tariffs on top of tariffs only
for countries that have existing limitations on what American goods
can be imported into those countries. So I'll give you
an example, please do so China. Yeah, there's currently a
sixty seven percent tariff on US goods that enter China.
So for US exporter is sending stuff to Beijing. So
(05:33):
Trump has applied a reciprocal tariff of thirty four percent
on all Chinese goods that come into the US, on
top of the twenty percent that he's already announced. So
Chinese goods now will face a fifty four percent tariff.
That's a huge markup for American importers who want to
import stuff from China, where a lot of goods and
(05:54):
services are made. They're not the only ones that EU
will pay an extra twenty percent on top of the baseline.
Countries like India and Japan are going to pay twenty
six and twenty four percent. And Trump said these reciprocal
tariffs were flexible, but not in the good way. He
said that should countries that have reciprocal tariffs applied to
them increase their tariffs on US goods in return to
(06:15):
match it, he's going to raise US tariffs. And that
quite simply is the beginning of a trade war.
Speaker 2 (06:20):
Okay, So my understanding reciprocal tariffs is tit for TAD.
Speaker 1 (06:25):
That's my comprehension. That's essentially the way it's going to work.
Speaker 2 (06:28):
Yeah, it's really interesting, But I think it's also interesting
to remember that certain countries, you know, their whole economies
are based on their exports. That you know, this will
have different implications for different countries. I do want to
just bring this domestically though, because, as you said at
the top, we are affected. Every single country is affected.
(06:48):
Does Australia currently have any tariffs on US goods? Like,
are we in this kind of reciprocal relationship here?
Speaker 1 (06:56):
We don't have any tariffs on US goods. However, we
do have some restrictions on importing certain products from America.
And one example that you mentioned already is beef. So
Australia has a policy that doesn't allow beef imports from
the US. But that's because of strict Australian biosecurity laws,
not necessarily.
Speaker 2 (07:15):
Because those ads on the plane when you're landing.
Speaker 1 (07:17):
Exactly think of the ad on the plane. So Australia
is going to get still that ten percent baseline tariff
even though we don't reciprocate that the other way, and.
Speaker 2 (07:28):
We don't reciprocate that the other way, or we haven't traditionally,
because we've had a free trade agreement which has meant
that we don't have tariffs.
Speaker 1 (07:35):
Exactly, and that's been in place since two thousand and five,
and that's really important in terms of how we understand
what this will change in the relationship between Australia and
the US. I mean, this is a relationship that, sure
there's that free trade agreement, but there's also a lot
of shared defense goals and projects orcus the Quad. So
(07:55):
there's some really interesting days and weeks ahead in terms
of these two friends in the Australia in the US.
Now there's a bit of a strain on that relationship.
Speaker 2 (08:03):
Yeah, and we know that Anthony Alberzi unsuccessfully reached out
to Donald Trump for a meeting before the tariffs were announced,
as I'm sure many other world leaders did, but Australia
did actually get a mention in the Liberation Day speech. Yeah,
it's not since Joe Biden forgot the name of Scott
Morrison that we were this front and center in a
(08:26):
kind of global news event. Talk to me about it.
Speaker 1 (08:28):
Well, it was interesting because there wasn't sort of paperwork
released by the White House before the announcement. There was
one moment where Trump brought out a big placard that
had the tariffs being applied to certain countries. I actually
started zooming in on my screen to figure out how
Australia would be impacted, and it wasn't on that board,
but he did mention us by name. He mentioned us
in relation to beef. Yeah, he said, they, being Australia,
(08:50):
won't take any of our beef. They don't want it
because they don't want it to affect their farmers. And
you know, I don't blame them, because we're doing the
same thing right now.
Speaker 2 (08:58):
Now.
Speaker 1 (08:58):
There was a bit of confusion about whether this meant
Trump would impose a reciprocal ban on Australian beef. Remember
I said we ban American beef. The government has since
confirmed the Australian meat is going to be subject to
that ten percent tariff, not a full ban, okay, but
that is still very concerning for our beef industry. The
US is one of our major export markets there and
(09:19):
Australian beef, as you mentioned, has been tariff free in
the US since two thousand and five. So this is
a significant change.
Speaker 2 (09:27):
Yeah, And we've spoken about beef now FA a few
times on this podcast because it is going to be
one of the hardest hit industries. What are some of
the other industries that we can expect to feel the
impact the most from this tariff announcement?
Speaker 1 (09:41):
So beef is the top export to the US. Then
you've got metals, including gold, where a big exporter of
metals used for coins from American coins. You've got pharmaceuticals
and you've got medical equipment, and those sectors are all
going to be hit by that ten percent tariff. And
it is worth noting on top of the ten percent
that steel and aluminium were already hit by a twenty
(10:02):
five percent tariff earlier this year, so there's going to
be now a bit of a compounding factor there. I
think pharmaceuticals and medical equipment is going to be an
interesting one because they're quite sensitive to price changes, and
so it's going to be interesting to see if there's
Australian pharmaceutical companies that are really impacted if American customers
start not ordering their products.
Speaker 2 (10:24):
Okay, so just to summarize what you've just said, our
top import to the US is beef. That's going to
be hit by the ten percent tariff, the same as
everything else. The other industries are metals, pharmaceuticals, and medical equipment.
Speaker 1 (10:39):
Is that right exactly?
Speaker 2 (10:40):
And then on top of that we know that there
are already existing tariffs, that twenty five percent tariff on
aluminium and steal exports. Yeah, that we've spoken about before
on this part, So it's going to be widespread, Okay,
I understand, and clearly that will have an impact on
our local economy. How have Australian leaders respond to the news.
Speaker 1 (11:00):
Well, all of this is coming in the first week
of the campaign trail and it's been a really interesting
exercise where journalists in the press gallery, but also I
think all voting Australians could look at these two leaders
to see how they would respond to a significant curve ball.
Why don't we start with what everybody had in common?
So both Prime minist anth and the Auberneazy and Opposition
(11:22):
Leader Peter Dutton expressed concern about the tariffs. The PM
said quite directly he was critical and said this is
not the act of a friend and pointed out that
the reciprocal tariff would be zero, not ten percent, given
Australia's free trade agreement with the US. Then we heard
from Opposition leader Peter Dudden. He said this is not
the treatment Australians deserve. He said the Coalition could have
(11:45):
achieved a different outcome on tariffs had they been in
government now, and he was particularly critical of the fact
as you mentioned that the PM has failed to secure
a phone call with President Trump within the past two weeks.
Speaker 2 (11:59):
Yeah, I mean, probably not what they wanted on their
bingo cards for this election campaign, but a really interesting
one to keep an eye on. We've obviously focused here
a lot on trade because that's the kind of clear
area that will be most affected, but we do have
partnerships outside of trade. Of course, we have defense partnerships
We've mentioned Orcus for one. What impacts will this have
(12:22):
on those sorts of relationships.
Speaker 1 (12:24):
Well, it's going to be hard to tell until we
get a real response from the government on if they
would like to use the fact that America has defense
bases in Australia or use the fact that you know,
we are a close ally for them in terms of
America keeping an eye on China as leverage to trying
to get those tariffs reduced. And you have to remember
(12:45):
that this is a broad relationship, and in fact, America's
got multifacted relationships with most countries around the world, And
you're right, trade is just one aspect of this, and
I wouldn't be surprised to see countries retaliating in ways
that are not about trade. Could be about shared defense resources,
it could be about technology and intelligence. But the most
(13:05):
important thing I think to take out of this is
the signal from the US government that even close security
partners aren't exempt from these sorts of penalties.
Speaker 2 (13:15):
Sam, I do just want to end by asking, and
you might not know the answer to this, but what
sort of options does Australia have in its back pocket,
no matter who the leader, no matter who the government
of the day is, what sort of options do we
have when responding to tariff announcements like this?
Speaker 1 (13:32):
Well, I guess, to use your phrasing earlier, Zara, in
the tit for tat kind of battle here, we could
hit them back with what they've hit us with and
do our own retaliatory tariffs. The Prime Minister was asked
about that yesterday. He said that he would not do
that and that it would create what he called a
race to the bottom. He pointed out that Australia's trade
(13:53):
with the US only accounts for about five percent of
our exports overall, and that the strength of Australia's economy
is in the fact that we have diverse trading relationships. Now,
what that ignores is the fact that it could be
the weakening of other economies that we're much more reliant on,
think China, India, Vietnam. If they become weaker because of
a damaged relationship with us, we're going to feel that indirectly.
(14:16):
The biggest option available for the government is to try
and solve this diplomatically, and they're going to try and
negotiate exemptions based on the things that we've talked about,
the strong relationships economically, but also in terms of defense.
The Trade Minister Don Farrell he already indicated he'll be
reaching out to his American counterparts, and Australia's ambassador to
(14:37):
the US, former Prime Minister Kevin Rudd, is definitely going
to be working the phone to try and figure out
how to get a negotiation meeting at the White House.
Speaker 2 (14:45):
In the diary, so interesting, Sam, Thank you for taking
us through that, so explaining everything we need to know,
and thank you for joining us on this episode of
The Daily OS that wraps up another week of Deep Dives.
We love giving you the news. We hope you love
this listening to it. We'll be back later today with
the headlines, but until then, have a great Friday.
Speaker 1 (15:08):
My name is Lily Maddon. And I'm a proud Arunda
Bungelung Kalgatin woman from Gadighl country. The Daily oz acknowledges
that this podcast is recorded on the lands of the
Gadighl people and pays respect to all.
Speaker 2 (15:20):
Aboriginal and torrest Rate island and nations.
Speaker 1 (15:23):
We pay our respects to the first peoples of these countries,
both past and present.
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