Donald Trump’s trade war: Beef, wheat, and wine exporters brace for US reciprocal tariff scheme

Donald Trump may still be finalising the details of his looming reciprocal tariffs, but the boldness of some of the most powerful lobby groups in the US suggests Australia is in for a bumpy few months ahead.

Our pharmaceuticals, beef, wheat, and wine exports, in addition to already-tariffed steel and aluminium, are all in the firing line of a man so hellbent on righting what he sees as a broken trade system that he’s undermining decades of free and fair trade and risking further pain to American consumers.

Reading submissions made to the White House to help inform the President’s thinking, a clear common denominator is that US producers and industry feel they are being screwed over by globalisation. Having a man in the White House who thinks tariff is “the most beautiful word in the dictionary” helps their fight.

Joining the list of US agricultural bodies urging Washington to slug Australian goods with imposts, the Kansas Association of Wheat Growers — representing the country’s biggest wheat growing state — argued imported vital gluten and protein had “injured” US farmers.

Specifically listing Australia alongside the EU, Canada, Russia and China, the association said imported product had “decreased prices at the farm gate… and has caused unfair competition for domestic vital wheat protein manufacturers in the heartland of the United States” at the same time that demand had increased.

“We need help from our President in prioritising and embracing a national wheat security plan for our farmers and agriculture economy,” chief executive Justin Gilpin wrote.

American winemakers are also demanding Mr Trump punish Australia with new tariffs, with the California Association of Winegrape Growers criticising the Australian Government over the 29 per cent tax on wine sales as among a number of “unfair, non-reciprocal trade practices” disadvantaging US producers and calling out Australia for an “influx of cheap, imported bulk wine”.

At the end of the day, it will be President Trump who makes the final decision come April 2 about how big or small a levy to impose on countries with “unfair trade practices”. But suggestions he use the PBS, or the News Media Bargaining Incentive as bargaining chips are alarming.

Big tech is well-embedded in this White House. Elon Musk is a regular fixture in the Oval Office as Mr Trump’s unelected right-hand man, while Meta chief Mark Zuckerberg and Amazon’s Jeff Bezos both have the President’s ear.

It’s not hard to imagine the “tech bros” using their access to make many of the same points canvassed in the Computer and Communications Industry Association letter.

But there is now pressure on the Australian Government to resist succumbing to the tech bros’ demands, if it comes to pass that that’s what Mr Trump demands in return for a tariff exemption or reduction.

Former home affairs secretary Mike Pezzulo says tech companies “have to be held both to account and they also have to be made to pay their way”.

“And I think it is an area where we should not relent and not be thwarted in our view, or the policies that we’ve been pursuing, or the legislative and regulatory reforms,” he said.

The fresh intervention by big pharma to complain to the Trump Administration about the PBS was not unsurprising, and both sides were quick to hose down the prospect of using it as a negotiating tool.

“The PBS is not up for negotiation and not for sale,” Prime Minister Anthony Albanese declared on Thursday.

The Coalition meanwhile agreed the PBS is “sacrosanct” and worth fighting for.

Whether the Trump Administration winds up trying to use them as pieces in this delicate - and dangerous - game of chess will be revealed in time.

What appears all but certain is that Australia will be hit with further tariffs. An act of “economic self harm” they may be, but no matter how hard the Government and Ambassador Kevin Rudd try to explain to the Administration that the trade surplus is in America’s best interest and tariffs are a slap in the face of decades of friendship and the Free Trade Agreement, the President and his hawkish sidekicks are on a mission.

President Trump is partly motivated by a belief that increasing imposts on imports will bolster the US economy and job market.

But strengthening domestic industry to ensure sovereign products are prioritised over foreign imports can’t happen overnight. American consumers will need to consider to buy Australian products in the short-term, but with a higher price. The American consumer will be hit the hardest, at least in the short term.

With Mr Trump already losing some steam in the polls, some in the Australian Government believe they’ll be in a better position to negotiate in a few months time, when Americans are starting to feel the sting of his isolationist trade policies and his popularity slides even further.

Of course, that assumes President Trump cares about what the everyday American people think about him.