Australia “will suffer” for generations if Donald Trump’s global trade wars persist, Don Farrell warns, as the Albanese government stares down an increasingly challenging economic environment in its second term.
In his address to the Lowy Institute on Friday, Australia’s trade minister will also say the US is “seeking to expand domestic manufacturing and influence the policies of its trading partners” as it questions the benefits of open, rules-based trade.
On Thursday, the Trump administration claimed a win after restrictions on imports into Australia of meat processed in the US but grown in Mexico and Canada were lifted.
“This is yet another example of the kind of market access the president negotiates to bring America into a new golden age of prosperity, with American agriculture leading the way,” the US agriculture secretary, Brooke Rollins, said.
Trade makes up nearly a third of Australia’s economic output, and one in four jobs relating to trade – Farrell will note that trade and investment support the Albanese government’s three top priorities: productivity, economic resilience, and budget sustainability.
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“But these institutions and norms we worked so hard to build are being questioned and the rules we wrote are being challenged,” he will say on Friday.
“One of the chief designers of the global trading system, the United States, is now questioning the benefits of open, rules-based trade.
“The Trump administration is seeking to expand domestic manufacturing and influence the policies of its trading partners.”
Farrell will point to Australia’s ability to send produce, resources and human capital around the globe as the reason behind the country’s high standard of living.
But he will flag that the shift in foreign and trade policy under Trump could undermine Australia’s prosperity with long-lasting impacts.
“What we risk seeing is a shift from a system based on shared prosperity and interdependence to one based solely on power and size,” the minister will say.
“If our trading partners’ growth slows, without doubt we will suffer.
“The costs to consumers and businesses of a global economic slowdown will be felt for generations, and the shock waves of inflation will worsen.”
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This notably stronger critique of Australia’s close partner reflects the government’s growing unease with pressure applied by the Trump administration.
Australia faces a 10% baseline tariff on all products exported to the US with a 50% tariff on steel and aluminium. There is concern a potential 200% tariff could be planned for pharmaceuticals.
On the US president’s so-called “Liberation Day”, Trump specifically cited Australia’s restrictions on beef imports upon announcing the tariff regime.
Farrell has previously said the US tariffs on Australian goods were not the “act of a friend”.
The multibillion-dollar Aukus pact is also under pressure after a snap administration review was announced amid US demands for Australia to increase its defence spending.