EDITORIAL: Anthony Albanese must take Donald Trump’s trade threat seriously

Until now, Australia had been mostly at the fringes of Donald Trump’s trade war.

While 50 per cent tariffs on steel and aluminium exports to the US and 10 per cent levies on everything else were worrisome, they weren’t world ending, given other nations were subject to more burdensome tariffs, making Australian exports comparatively more attractive

In fact, modelling released this week from the Productivity Commission predicted that the tariffs would actually have a net positive effect on the Australian economy, partly as a result of cheaper imports from the rest of the world. The modelling showed that without retaliation, Australia’s GDP would experience a modest boost of 0.37 per cent.

But that changed overnight, when Mr Trump dropped the bombshell that he had a new target in his mission to upend the global trade economy. This time, the effects will hit close to home.

Fifty per cent tariffs on copper exports.

And the news that set industry on edge: the pharmaceutical sector could expect to be subject to tariffs at a “very, very high rate, like 200 per cent”.

Pharmaceutical exports are big business in Australia, with about $2 billion in sales to the US a year.

Is this the kick in the backside the Australian Government needs to finally get its act together?

Until now, Anthony Albanese’s response to Mr Trump’s trade threat has been remarkable in its complete lack of urgency.

The Prime Minister’s efforts to secure a meeting with the US President to discuss a path to a potential carve-out have been desultory.

Since he was stood up at the G7 summit last month, Mr Albanese has seemed reluctant to pursue the Americans for a make-up catch-up, apparently concerned that a second snub would be a mortal wound to his pride.

He has said he hasn’t given up on securing an exemption, but has stressed that no other country has a better deal right now than Australia.

That hasn’t filled Australian businesses and investors with confidence.

Exactly what efforts are being made? Who are we sending in to prosecute our case? Certainly not Ambassador Kevin Rudd, whose past criticisms of Mr Trump have put him in the White House’s deep freeze.

Let’s hope there is a grand plan. But the information vacuum presented to Australians at the moment suggests otherwise: that Mr Albanese and others are pinning their hopes on Mr Trump chickening out or losing interest.

Some appear to be getting the message.

Treasurer Jim Chalmers called the developments “very concerning”.

RBA deputy governor Andrew Hauser said the central bank was “very, very focused” on Mr Trump’s trade policies, and likened their potential impacts to the Brexit experience.

“The day after Brexit happened, everyone thought the world would end, and it didn’t. But 10 years on, you’re seeing the profound effects of some of those changes for sustainable growth rates and for fundamental things in the economy,” he said.

Responsibility for the editorial comment is taken by Editor-in-Chief Christoper Dore.