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    US accuses Australia of breaking ‘verbal commitment’ on aluminium exports as Trump weighs tariffs exemption

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    Donald Trump has called Australia’s prime minister a “very fine man” and said he would give “great consideration” to exempting the country from his new 25% tariffs on steel and aluminium imports, after a phone call between the two leaders.It came after comments on Tuesday from the US president that there would be no exceptions or exemptions on the tariffs, which will start on 12 March unless Anthony Albanese can secure an exemption.The official proclamation to impose the aluminium tariff appeared to explain why Australia was not exempted from the outset, with the US accusing Australia of breaking a “verbal commitment” to limit aluminium exports.

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    The new proclamation read: “The volume of U.S. imports of primary aluminum from Australia has also surged and in 2024 was approximately 103% higher than the average volume for 2015 through 2017. Australia has disregarded its verbal commitment to voluntarily restrain its aluminum exports to a reasonable level.”Former prime minister Malcolm Turnbull negotiated a carve out from steel and aluminium tariffs during Trump’s first term.Asked about the proclamation on Tuesday night, the deputy prime minister and defence minister, Richard Marles, told ABC’s 7.30: “I can’t speak for the former government, in terms of what it did or didn’t do … but in the discussion that was had today, in the president’s own press conference, having signed the executive order, he made clear that Australian exemptions to this order would be under active consideration. And that’s where this is now at.”Earlier on Tuesday, Albanese said his second call with Trump had been a “very positive and constructive discussion”, which canvassed the Aukus defence pact, critical minerals and foreign investment between the two countries.Albanese said he had also made the case for Australia to be exempted from tariffs and was hopeful of such an outcome.“If you have a look at what we’ve achieved already, it’s been a tremendous start to the relationship,” Albanese told a press conference in Parliament House.Minutes later, the White House announced that the president was signing executive orders to place a 25% tariff on the imports, stepping up a long-promised trade war.Trump initially said the tariffs would be imposed without exceptions but then confirmed he was giving “great consideration” to an Australian carve-out.Asked about his call with Albanese, Trump called the Australian leader “a very fine man” and noted the US trade surplus with Australia.“We have a surplus with Australia, one of the few … I told him that [exemptions] is something we will give great consideration,” Trump said.The opposition leader, Peter Dutton, also publicly urged the Trump administration to exempt Australia from tariffs, claiming any move to the contrary would “damage the relationship” between the two countries.“Tariffs are not warranted against Australia because we have a trade surplus,” he said.Australian politicians were rocked on Monday when Trump told reporters in the US that he planned to announce new tariffs on all steel and aluminium arriving in America.skip past newsletter promotionafter newsletter promotionThe Labor government been bracing for such a decision after Trump levelled similar tariffs in his first term, with senior ministers and officials working behind the scenes for some time to secure exemptions like those secured by the then-Coalition government after months of negotiations in 2018.“Our aluminium is a critical input for manufacturing in the United States,” Albanese said on Tuesday after his call with Trump. “Our steel and aluminium are both key inputs for the US-Australia defence industries in both of our countries.“I presented Australia’s case for an exemption and we agreed on wording to say publicly, which is that the US president agreed that an exemption was under consideration in the interests of both of our countries.”Albanese would not reveal more about the process by which the exemption would be considered, the timeline by which a decision would be reached, or what Australia would do if the exemption was ultimately rejected. He said he would not speak for Trump but again referred warmly to the Australia-US relationship.“What I envisage is continuing to act to respond diplomatically,” he said. “That’s how you get things done. My government’s got a record of getting things done in Australia’s national interest. I’ll continue to do so.”A US congressman has hit out at any attempt to slap tariffs on Australian products.Joe Courtney, a Democratic politician and co-chair of the Friends of Australia Caucus,, noted that Australia had just this week begun sending payments to Washington as part of the Aukus pact to help bolster the US submarine construction program.“What we’re seeing is a completely needless, almost insult to the people of Australia by raising tariffs of Australian products coming into this country,” Courtney said.The shadow trade minister, Kevin Hogan, suggested that the government should “reach out to whoever may help” Australia secure exemptions, including the former Coalition politicians Scott Morrison and Joe Hockey.“I encourage the prime minister and indeed ambassador [Kevin] Rudd to talk to people like Morrison, people like Hockey,” he told the ABC. “We had a precedent when we got an exemption, they should be using those resources.” More

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      Trump has thrown out the global economic playbook. It’s time for Australia to write its own rules | John Quiggin

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      With the resumption of parliament this week, and an election only months away, we have seen even more of the usual point-scoring about the cost of living, tax breaks for long lunches and budget deficits. But since the return of Donald Trump to the White House, the assumptions on which Australian economic policy have always been based are obsolete.It’s not just the “rules-based international order”, symbolised by the already moribund World Trade Organization, that is gone. Trump is ruling by decree (more politely referred to as “executive order”) and encountering little resistance. Corporations have rushed to buy his favour (or placate his wrath). The US Treasury appears to have been turned over to Elon Musk. No one can predict what will happen here, but a major financial crisis can’t be ruled out.The most immediate threat to Australia arises from Trump’s use of tariffs as a bludgeon to be used in pursuit of vague political demands, or simply as a display of dominance. Trump’s surprising backdown in response to mostly symbolic concessions from Canada and Mexico might be seen as a recognition of the risks of overreach. More likely, however, it reflects a belief that this is a weapon that can be used over and over again, and a desire to fight one enemy at a time (Trump does not believe in friends).For the moment, the tariff fight is with China, and both sides are showing some restraint. As long as this restraint persists, the collateral damage to the Australian economy will be modest. But Trump is prone to acting like a capricious dictator. He could easily take offence at some real or imagined slight and return to the 60% tariffs he promised on the campaign trail.Tariff policy is one of many fronts. Trump has withdrawn the US from the Paris climate agreement, the WHO and international aid programs. Of more immediate consequence for Australia, the US has withdrawn from the OECD agreement on corporate tax minimisation and from attempts to tax the digital economy. Musk and the other tech cronies have already threatened to punish Australia for taxing social media platforms, and for attempts to restrict toxic and violent content.In the long run, this means Australia needs to treat both the US and China as unreliable trading partners who will bully us whenever they see a benefit from doing so. We need to seek a balance between the two and, more importantly, become more self-reliant. In particular, we need to develop our own AI and social media infrastructure, for example by making our own version of DeepSeek and breaking with X and Meta as well as TikTok.In the short run, what’s needed is a recognition that the downside risks to the Australian economy have increased greatly. The government should be preparing plans for fiscal stimulus rather than worrying about public debt. More importantly, the Reserve Bank needs to start cutting rates immediately to guard against recession, even at the price of an incomplete victory over inflation.Above all, we need to ditch the illusion that all this is theatre and that things will go on as before. The US, as we knew it, is gone and won’t be back any time soon. The implications for the global economy, and therefore for Australia, are hard to discern, but they are sure to be profound.

      John Quiggin is a professor at the University of Queensland’s school of economics More

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      The RBA will likely hold interest rates – but are its calculations at risk of being overtaken by US election chaos?

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      When the Reserve Bank board meet next week to discuss interest rates, it will have an inescapable “best-laid schemes of mice and men” feel about it.For sure, there will the usual meticulous assembly and assessment of data, including Wednesday’s relatively benign inflation figures.The annual consumer price index landed at 2.8% for the September quarter from a year earlier, retreating for the seventh of the past eight quarters. It is now within the RBA’s 2%-3% target range for the first time since early 2021.Most of the other trends were friends too. Underlying inflation, as measured by trimming off more volatile items, eased half a percentage point from the June quarter, to 3.5% – or about where the RBA had expected it to be by the end of 2024.Shoppers may not yet appreciate it but the price of essentials, or non-discretionary items, were up 2.9%. Tradeable goods, including petrol, were barely up at all – rising just 0.6% – reflecting in part China’s faltering economy with more of their products exported.Services were the most obvious holdout. It crept up for a second straight quarter to an annual pace of 4.6% – reflecting strong jobs growth in that sector – and will no doubt prompt the RBA governor, Michele Bullock, to repeat concerns about “sticky” inflation.The RBA decision will almost certainly see it hold its cash rate at 4.35%, marking a year since its most recent rate hike. Attention will likely focus on whether the board at least considered a rate cut – something it hasn’t done in about four years.As they do every quarter, the RBA’s monetary mavens will also update the central bank’s forecasts of where they think everything – from the oil price to government spending and household saving – will change over the next two years.A routine event, as far as the schemes of the women and men of our central bank go. But how long might it take before Bullock’s nuanced comments or the finely calibrated forecasts are overtaken by events?After all, the first polls will be opening in the US not long after the RBA’s board meeting wraps upon Tuesday.Counting delays can be expected to elevate tensions – unless there is a decisive victory for Democrats or Republicans.So far, markets seem to be adjusting to varying expectations of whether the US vice-president, Kamala Harris, will prevail for the Democrats or Donald Trump will make a return to the White House he reluctantly and ungraciously left four years ago.“A Harris win is likely to see a great degree of policy continuity regarding trade (and, more broadly, industrial policy), immigration and Federal Reserve independence,” NAB’s senior economist, Tony Kelly, opined in a report released on Wednesday.“A Trump presidency in contrast would pursue substantially different policy in these areas, although a divided Congress would impede some of his agenda.”Trump’s promise of a 60% tariff on many imports is just one of the policy departures from the Democrat president, Joe Biden.The RBA board will no doubt be mulling similar advice as it weighs up various scenarios – although don’t expect the wargaming to appear in its meeting minutes.Perhaps everything will go smoothly in the world’s biggest economy. Everyone – in the US and elsewhere – can then return to dealing with more prosaic considerations, such as what December quarter inflation may look like and how soon might the RBA cut rates.The alternative, though, of US political fights moving from the pulpit to the courts to the streets can’t be airily dismissed. More

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      As our former lives dissolve into uncertainty, facts are something solid to cling to | Lenore Taylor

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      I have always worked with facts. I have sifted them for relevance, assembled them to make sense of things, and used them to construct an argument or to disagree with another point of view. Facts are, for journalists, the essential ingredient, like flour for bakers or clay for sculptors. So I recall very clearly how disconcerted I felt when I first sensed they were turning to liquid and sliding through my hands.It was during Tony Abbott’s campaign against the Labor government’s carbon pricing scheme – the policy he dubbed a “great big tax on everything”. There were, for sure, some factual arguments that could have been deployed against that policy, or alternative ideas that could have been raised. The then opposition leader opted for neither of these methods. Instead, he travelled the country saying things that were patently nonsensical. But most news outlets reported them uncritically, and this firehose of nonsense proved impossible to mop up. More