LATIKA M BOURKE: Why Australia is one of only two countries that may escape Trump’s tariff stick

Donald Trump has begun wielding his tariff stick. First in line was not, in the end, Canada, Mexico or China but Colombia, after its government refused two plane loads of migrants the US wanted to deport.

The threat worked. Hours later a deal had been struck – Colombia backed down and let the planes land.

The White House was swift to claim victory.

“Today’s events make clear to the world that America is respected again,” White House press secretary Karoline Leavitt said.

Trump’s early success in obtaining the rapid submission of a friendly country with a mere social media post will rattle, if not terrify, world leaders. For it shows no-one is safe from the US President’s reductive approach to his America First policy that is, essentially ‘do what I say or pay the price’ – literally.

Colombia’s case is a salient reminder that allies, mates and partners are all fair game in this equation, and that if there’s a trade war, it might not just be with the United States’ superpower rival China.

It could be anyone.

But Australia may be one of the few countries that can afford to exhale, as a chart prepared by the Washington-based Centre for Strategic and International Studies (CSIS) shows.

Victor Cha served on the US National Security Council in the early 2000s with responsibility for Australia, Japan, Korea, the Pacific and New Zealand.

Now president of the Geopolitics and Foreign Policy Department at CSIS, he said that if any lessons can be learnt by Trump 1.0 to navigate Trump 2.0, it’s that his transactional, America First approach to foreign policy especially applies to allies.

“Allies are not appreciated either in Europe or Asia as unique power assets,” Mr Cha told the recent Brussels Indo-Pacific Dialogue hosted by the Centre for Security, Diplomacy and Strategy at the Brussels School of Governance.

“He sees them as fundamentally weakening the United States, as tying US hands, as allies free-riding off US security commitments.”

Cha’s team at CSIS scraped all of Mr Trump’s words on the subject dating back to the 1980s.

“It’s remarkably consistent when it comes to analysing partners – remarkably consistent,” he said.

CSIS’s “Trump Prism on Allies,” assesses how the President-elect is likely to treat NATO and Indo-Pacific partners based on the two metrics Mr Trump cares about – trade surpluses and defence spending as a percentage of GDP.

Those who have a trade surplus with the US and spend less than 3 per cent on defence are categorised in the danger zone.

“Basically it’s every country except for two – one of them is Latvia…the other is Australia because Australia is the only Indo-Pacific ally that has a trade deficit with the United States.”

Prime Minister Anthony Albanese raised Australia’s trade deficit with Trump in the only phone call he has had with the incoming President since last November’s election.

“When I spoke with President Trump, I pointed out … that the United States has enjoyed a trade surplus with Australia since Truman was president,” Mr Albanese told Sky.

“So, for a long period of time.

“So, the trade between Australia and the United States is in both of our nation’s interests.”

But while Australia is off the hook when it comes to the trade balance, it is on less certain ground regarding defence spending, which is just 2.03 per cent of GDP.

Whilst Australia is not a member of NATO, a comparison that can be made is Mr Trump’s demands that the allied members pay more than two per cent.

During a press conference at Mar-a-Lago earlier this month Mr Trump, said he would like to see NATO allies spend as much as 5 per cent, a target the US does not even meet. However, he is more likely to land at a demand of around 3 per cent.

This measure could easily be applied to Australia, which is not a NATO member but reliant on the US to deliver it nuclear-powered submarines under AUKUS.

“On AUKUS, I think he will support it because it will be framed to him as important leverage on China,” Mr Cha told The Nightly in follow-up comments.

“He is also focused on closing the ship gap with China.

“But Canberra should be prepared for Trump to ask allies to foot more of the costs.

“It may not seem right but that is the world we now live in.”

There is a growing expectation in Australia that Trump will demand more immediate increases to defence spending than is currently budgeted.

Michael Green who heads the United States Studies Centre in Sydney has said that it was possible Trump would accelerate AUKUS, but increase Australia’s financial obligations.

Key figures support AUKUS

But so far, government figures are buoyed by the supportive comments made by key Trump nominees for AUKUS.

Some concern was sparked when Elbridge Colby, who before being named as the incoming number two in the Pentagon, told The Nightly that he would not have agreed to the project if he were in charge at the time the deal was struck by former prime ministers Scott Morrison and Boris Johnson and outgoing President Joe Biden.

Mr Colby has since walked back some of those views.

And Marco Rubio told his Senate confirmation hearing that AUKUS was a “blueprint” for future allied projects.

“It’s something that I think you’re going to find very strong support for in this Administration,” the next Secretary of State said.

“I think it’s almost a blueprint in many ways of how we can create consortium-like partnerships with nation states that are allied with us to confront some of these global challenges.”

But in Trump’s world, partnerships could have a double meaning and Australia will have to be permanently ready to expect anything if the US President doesn’t feel he’s getting his way.

Indeed, no one in Europe saw a threat, however hyperbolic, to annex Canada coming, or to take over the Panama Canal and seize control of Danish-administered Greenland.

Trump throws everyone, friends and foes, off guard because it works.

Take the ceasefire agreed by Hamas and Israel. It was the same deal that the Biden Administration had been pushing at the warring parties since May 2024. But it was only reached this week – five days from the inauguration.

Wrecking ball or bull in a China shop, it doesn’t matter, Trump’s unorthodox methods are effective in achieving the results where standard diplomacy fails.