Australia will consider bringing allies to the World Trade Organization (WTO) if they are targeted by the Trump administration’s “liberation day” tariff regime.
The US president was expected to announce the global round-trip tariffs for the new round at 4pm on Washington, DC Time (7am Thursday) on Wednesday (AEDT on Thursday), but it remains largely unclear which countries and goods will be targets.
Australian drugs, meat exports and other agricultural products are potential targets, but some governments expect tariffs of up to 20% across all exports to the US.
Senior government sources said they could allow pessimistic Australia to escape Trump’s widespread tariff regime.
He asked directly whether his government was preparing to take the United States to the WTO (arbitrator of international trade disputes). Prime Minister Anthony Albanese said his government is “prepared for all the possibilities ahead.”
The WTO case took years to prosecute and is considered a humiliation to a close alliance. The US may even ignore Australia’s claims and findings made against them, or even withdraw from the WTO.
Government sources thought the broad brush tariffs assumed by the Trump administration would be a clear violation of the 2005 free trade agreement signed between the US and Australia.
Canada has already taken the US to the WTO and has won the steel and aluminum tariffs that Trump imposed last month.
Jenny Gordon, professor emeritus at Australian National University, is a non-resident fellow at the Lowe Institute, and said the WTO mechanism is slow and skilled.
“Anti-dumping cases can go for years and tariffs can start quickly. But the WTO still offers a mechanism to come together and take on a common cause.”
Gordon told Guardian Australia that collective action by countries against the US tariff system would be the most effective measure.
“Australia needs to work with Japan, Korea, and even work with China. It’s the perfect time. That’s our best strategy, but it takes time and effort.”
She said tariffs imposed by the US could lead to an increase in dumping of surplus stocks previously tied to the US market.
“This will be very strong if we can get some kind of agreement from a country that “not throw away” extra goods in other markets or that the government will not resist the demands of anti-dumping tariffs. The WTO provides a forum for this type of cooperation and can prevent the growth of the World Trade War. ”
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Albanese re-emphasized that the proposed US tariff regime would hurt the US economy and the US citizens.
“Taxes are economic self-harm against those who impose it. It increases the costs of buyers in the United States,” he said.
The Prime Minister said the US represents less than 5% of Australia’s exports, and if US tariff barriers are imposed, exporters will continue to diversify into new markets.
Within the government, Australia has resigned to avoid new tariffs despite its close ties with the US.
In Trump’s first administration, Australia secured tariff exemption after claiming that Australia had carried out a trade deficit with the US, signed and ratified a free trade agreement, and was a committed alliance and security partner.
But Trump’s second administration has repeatedly said he regretted the exemption the president gave Australia in his first term.
On Tuesday, Trade Minister Don Farrell made a virtual connection with 100 industry stakeholders, explaining the US tariff outlook and how the government will respond.
Senior sources said the government wouldn’t panic if Trump included Australia in its announcement of tomorrow’s “liberation day.”
White House spokesperson Caroline Leavitt said at a briefing in Washington that tariffs will come into effect as soon as they are announced.
However, Leavitt pointed out that he is willing to consider the amendment after Trump was imposed. Trump is already trying to pursue foreign policy goals, such as using tariffs as leverage to stop the illegal fentanyl flow across the US border from Canada and Mexico, and delay or withdraw them when other countries meet his wishes.
“It’s true, the president is always asking for good negotiations to make calls,” Leavitt said. “But he’s very focused on correcting past mistakes and showing that American workers are in a fair shaking.”
