SOURCE :- THE AGE NEWS
For a hopeful moment, it seemed that the Trump administration was about to grant Australia an exemption from its new tariffs.
It was last Friday week, March 28 Washington time, as the administration was putting together its “reciprocal tariff” list to be announced on Trump’s so-called “Liberation Day”. Australia’s ambassador, Kevin Rudd, had pitched a deal to Trump’s commerce secretary, Howard Lutnick, and US trade representative Jamieson Greer.
Illustration by Dionne GainCredit:
“It looked promising – there were positive responses,” Australia Trade Minister Don Farrell tells me. “We thought there was a possibility of an exemption.” A couple of weeks earlier, he’d told reporters that he was looking to make Trump “an offer he can’t refuse”.
But by the following Monday, “they weren’t returning our calls”, relates Farrell. Hope faded. It seemed that it was an offer Trump could and would refuse.
That was when the British told their Australian counterparts that they, too, had hoped for an exemption. But now London was expecting a blanket tariff on British exports to America of 20 per cent. Canberra had heard nothing back from Washington and assumed that Australia, too, could face a 20 per cent tariff. It was looking bleak. Farrell decided it was time to brief Australian industries and companies.
Last Tuesday and Wednesday, Australian time, Farrell held Zoom calls with about 100 Australian export groups and companies to tell them “to prepare for the worst” – a uniform tariff of up to 20 per cent on all Australian exports to the US, except for steel and aluminium, which already had the unhappy distinction of being hit with a Trump tariff of 25 per cent.
Rudd kept working at it, however, and, as late as Monday last week, US time, two days before “Liberation Day”, he spoke with Trump cabinet secretaries again in an effort to change their minds.
Australia’s offer? It included a proposal to help deliver a reliable supply chain of critical minerals to the US. Australia, richly endowed, had discussed such an arrangement with the Biden administration too. This is a priority for America because China today has a stranglehold on supply of the metals and rare earths that are essential to everything from missile guidance to smartphones.
It’s such an imperative for Trump to break the Beijing chokehold that he’s threatened to seize Denmark’s territory of Greenland by force to get its rare earths deposits, and demanded that Ukraine sign over rights to its reserves too if it wants any more US help in surviving the onslaught from Russia.
Anthony Albanese said last week that his government would create a “strategic reserve” of critical minerals and foreshadowed more announcements on this during the Australian election campaign.
Donald Trump holds up his chart of “reciprocal tariffs” at the announcement event in Washington.Credit: Getty Images
The Australian offer to Trump also included several elements that are not related to trade but remain confidential. The same offer remains on the table. “The ball is now in the US court,” Farrell tells me. “We have put our proposition to them, and it’s open to them if they want to accept it.”
On “Liberation Day”, Trump announced a tariff on Australia and Britain of 10 per cent, the lowest rate levied on any of the 180 nations on Trump’s list. Farrell describes the administration’s processes as “febrile”. British Prime Minister Keir Starmer said that “the world as we knew it has gone”.
Why did the Trump people go cold on the Australian deal? The word from Washington back to Canberra was that Trump’s trade adviser, Pete Navarro – the ideologue behind the program of universal tariffs – had got to Trump and insisted on “no exemptions”.
This zeal for omni-tariffs helps explain Trump’s bizarre overreach – imposing a 10 per cent tariff on places such as the British Indian Ocean Territory, a remote archipelago where the only economic activity is a US military base on the island of San Diego. The American magazine New Republic headlined the news this way: “Stable Genius Trump Just Put Tariffs on a US Military Base”.
And, famously, on penguin colonies – the uninhabited Heard and McDonald islands, part of Australia’s Antarctic territory. This was Australia’s revenge – it exposed the tariff plan to endless ridicule across the internet. Albanese said: “Nowhere on Earth is safe.”
Trump did grant exemptions. While all of America’s allies were hit, four of America’s traditional enemies received zero “reciprocal” tariffs. The four? Russia, Belarus, North Korea and Cuba.
How could it be that uninhabited islands are hit yet violent aggressor states such as Russia, its ally Belarus, nuclear rogue state North Korea and perpetual US pariah Cuba get special treatment?
Two of these, Russia and North Korea, last month were named in the annual threat assessment by the US intelligence community as posing the greatest nation-state dangers to America, together with China and Iran.
Trump’s Treasury Secretary Scott Bessent said that Russia was spared because it had no trade with the US. This is not true. Two-way goods trade last year amounted to $US3.5 billion, according to US government statistics, which is more trade than America does with many of the countries on the tariffs hit list.
A White House spokesperson said that Cuba, Belarus and North Korea were exempted because existing tariffs and sanctions on them were already so high. Yet other countries subject to crippling US sanctions, such as Iran, were slapped with an extra 10 per cent “reciprocal” tariff last week.
So these explanations are unconvincing. Peter Tesch, former Australian ambassador to Russia and a former deputy secretary for defence, says of these attempts at justification: “It’s a superficial ‘out’ for what’s obviously a political decision. It is telling; you could make that case for a dozen countries.”
So why these four? Vladimir Putin, says Tesch, continues to receive special favour from Trump because of what he calls Trump’s “theological” identification with the Russian dictator, and Belarus because of its closeness to Russia. Putin might have sought from Trump a mark of favour for North Korea and Cuba, he speculates, because he is in an alliance with Pyongyang against Ukraine and is improving ties with Cuba.
Whatever the explanation, one of the few people with a positive word for Trump’s tariff program was leading Putin propagandist Vladimir Solovyov, a TV host on Russia-1. He lauded Trump’s tariff program for “striking a devastating blow against the West”. His program proposed building a monument to Trump in Moscow. It seems unlikely there will be any erected in any Western capital.
Peter Hartcher is international editor.
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