Economic turmoil continues in the US with almost daily shifts in the tariff war being conducted against everyone except Russia.
The self-destructive economic behaviour of the Trump administration is likely to drive countries in our region much closer to China – something that will have major implications for Australian security. Not that you will hear a word about that from any of our head in the sand politicians.
Then some words about the movie The Downfall and the ability of some politicians to live in a fantasy world, ignoring all of the evidence in front of them.
The Australian people are being told two big lies: that the US relationship is as rock solid as ever and that massive increases to our Defence budget are underway.
Neither is true.
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Thanks, Kym for the podcast.
I can see three ways where US trade policy has the potential to apply significant torsion to Australia.
1. The US has ‘dropped the soap in the bath’ through its tariff agenda. If China decides to pursue a policy of coercion against Taiwan, the card up the sleeve of the US to avoid kinetic escalation was coordinating a global tariff or trade embargo regime. In their Liberation Day actions, the US has destroyed its capacity to lead global trade policy.
2. If the US manages to corral enough nations back inside the US trade arrangement fence, it has the capacity to pressure Australia to apply secondary tariffs or trade boycotts on China. In other words, demands that Australia choose a side. This would be devastating to Australia’s trade relations with China.
3. Australia has legislated restrictions on social media companies relating to limiting access of under 16s. This legislation goes live late in November 2025. Expect this to be a rationale for applying significantly more pressure on Australia’s trade relationships, including technology and IP transfer and sharing.
The only solution is to get on the front foot on trade arrangements. (1) Clean up the process for processing applications to join the CPTPP and start expanding this network. (2) Sort the FTA with the EU, and if necessary, this is the future relationship where critical minerals access agreements might make sense. (3) Apply for admission to ASEAN, asap.
Have a great break!
Good thinking on all of those points.
One further dimension of strategic policy and the Australian election is that the Coalition has indicated that it intends to make a significant defence announcement between now and the election.
Given they have already announced the (uncosted) addition of another squadron of F35, I am left wondering how ‘splashy’ the next announcement will be. Could it be a cultural/symbolic wedge – ie., a reintroduced form of national service, or a delusional strategic ambition such as a missile defence system? I am worried…
I have absolutely no idea. I’ll try and do some sort of Federal election wrap a couple of days before the poll. The Coalition is struggling, and they will need to be careful not to drive their primary vote even lower. Andrew Hastie has been notably absent during the campaign and as a consequence there will not be the usual televised NPC debate between the Minister and the Shadow Minister for Defence. I’m sure they are mutually happy about that, as neither wants to face a sustained series of questions about the cost of AUKUS, for example.
I cant make any sense of America wanting to disengage from China. America needs cheap labour. It isn’t like they will ever bring these sweatshops to the US particularly now that they have deported all their cheap labour.
It makes no sense to anyone outside the Trump administration.
Can’t wait for the forensic analysis of Danger Mouse Dutton’s recent promise to stare China down by increasing Australia’s defence spending target from Labor’s 2.4% of GDP to an eye watering, wait for it….2.5% 🤔 a gargantuan leap commensurate with Poida’s 2021 mantra that war with China was “imminent”.
I’m going to record a pre-election podcast next week to discuss that and a few other things.