Trump’s Win: Trade, Tariffs, and Australia’s Next Moves

Former US Ambassador Joe Hockey urges Australia to brace for US challenges under Trump: tariffs, shifting trade policies, and China tensions.

Former President Donald Trump departs after attending the civil fraud trial against the Trump Organization in New York State Supreme Court in New York City on Jan. 11, 2024. John Lamparski/AFP via Getty Images

With Donald Trump now the U.S. president-elect, former Australian Ambassador to the U.S. Joe Hockey has outlined some challenges Australia could face as the new administration begins shaping its policies.

Hockey pointed to issues such as tariffs, China relations, and America’s economic priorities, stressing that Australia must prepare to navigate potential disruptions.

“He will challenge us on tariffs, stepping up on international relations, confronting China, and much more,” Hockey told Sunrise television.

During his campaign, Trump pledged to impose tariffs of up to 20 percent on most imports to the United States. and significantly higher rates of 60 to 100 percent on goods from China.

Australia’s trade with the United States is governed by the Australia-United States Free Trade Agreement (AUSFTA), which has provided substantial tariff relief since it was enacted in 2005.

Currently, 96.1 percent of Australian exports to the U.S. are tariff-free.

However, when Trump took office in 2017, he introduced sweeping tariffs on global imports but granted Australia an exemption after significant diplomatic efforts.

“We were the only country exempted from both tariff increases and quotas,” he noted.

However, he said that there were many in the Trump administration keen to impose tariffs on Australia even then.

“It’ll be even more challenging this time,” he cautioned.

Potential Economic Impact on South Australia

Susan Stone, Credit Union SA Chair of Economics at the University of South Australia, has also raised concerns, particularly for South Australia.

She pointed out that while the United States represents a smaller portion of Australia’s overall exports, it accounts for over 10 percent of South Australian exports, notably in beef, wine, and lead.

“Any tariffs could seriously impact South Australian businesses,” Stone said.

For South Australia, the United States remains a key market for high-tech goods, with some exports—like engines, pharmaceuticals, and machinery —reaching up to 64 percent of the state’s output to the U.S. The economic impact of new U.S. tariffs could, therefore, be substantial.

Trump’s Win: Policy Over Personality

Hockey attributed Trump’s re-election success more to his policies than popularity, saying his economic agenda and inflation were at the forefront of American voters.

“He ran a campaign based on policy, because there’s no enormous love of Donald Trump on the ground in the United States, but there is great affection and hope in his policies,” he said.

In addition to the economy, immigration remains a key issue.

Hockey noted that American voters seem “exhausted” by overseas conflicts and that Trump’s promise to prioritise national security over foreign engagements resonated widely.

Australia’s Takeaways Ahead of Election

As Australia’s own election approaches next year, Hockey, a former Liberal Party leader, observed that the U.S. election offers a valuable lesson.

“It’s tough to be the incumbent,” he said, noting that voters ousted both Trump and Biden after single terms when voter concerns were not addressed.

“And they'll do it again unless Trump delivers this time around.”

He further highlighted the need to prioritise policies around voters’ financial security and personal safety.

“If people don’t feel financially secure and personally secure in their neighborhoods, then they will throw out the government.”

Hockey Backs Rudd’s Diplomatic Outreach to Trump

Australia’s Ambassador to the U.S., Kevin Rudd, recently deleted social media posts critical of Trump, previously describing him as “the most destructive president in history.”

Hockey commented, “Trump does forgive, but he doesn’t forget.”

“Trump doesn’t automatically oppose those on the left or right. He’s more interested in personalities,” he said.

He also highlighted Rudd’s efforts to engage key figures within the Trump administration.

“I know Kevin Rudd has been working overtime on a number of senior Trump Republicans, and hopefully for the sake of Australia, those relationships develop into a closer working relationship with a Trump administration.”