Comment

John Hewson
Albanese’s long game is paying off

The consequences of the Trump tariff policies seem to finally be coming to a head. Economic figures from the United States suggest that not only has inflation begun to climb again, but that jobs growth has slumped, with steep downward revisions to recent months’ figures. Included in the July jobs report was confirmation that many industries, including manufacturing and construction, have essentially stopped hiring.

Donald Trump’s response, unsurprisingly perhaps, was to fire the head of the Bureau of Labor Statistics (BLS). In two of several related rants on his platform, Truth Social, Trump posted: “In my opinion, today’s Jobs Numbers were RIGGED in order to make the Republicans, and ME, look bad” and “The Economy is BOOMING under ‘TRUMP’ ”.

This in turn sparked concerns among economists about the ongoing integrity of the data that the central bank relies on to set interest rates. It’s a concern that can now be added to the increasing likelihood that the US president will – if not directly, then through his constant criticism – force the Federal Reserve chair to step down. Alongside his attacks on the BLS chief Erika McEntarfer was yet another reference to the Fed’s failure to cut interest rates, declaring that “Jerome ‘Too Late’ Powell should also be put ‘out to pasture.’ ”

Meanwhile, Trump’s trade policy continues its erratic course. Much media coverage and commentary has been attempting to make sense of the various deals governments around the world have struck to secure Trump’s favour and some finalisation of their rates.

US trade representative Jamieson Greer now says the recently announced tariff levels are likely to stay in place. They are higher than expected for most countries: 39 per cent for Switzerland, 35 per cent on many goods from Canada, 50 per cent for Brazil, 25 per cent for India, 20 per cent for Taiwan and so on, all by executive order. The European Union’s recent agreement will apparently see its rate from April halved to 15 per cent, equalling the tariff on German cars, which will drop from 25 per cent, but the levies are still far more punitive than what existed before this administration. Meanwhile, Trump’s orders still face legal challenges as to whether the president actually has the power to so easily sideline congress on global trade policy.

It is important to give credit where genuine credit is due, by recognising the success of the Albanese government’s patient, professional and focused diplomacy, mostly conducted behind closed doors.

Many countries remain bewildered as to the logic behind Trump’s decisions. What a pointless exercise. It’s clear that logic has played no part. His misguided economic decisions seem merely the products of his prejudice and desire for revenge.

Trump himself has over time expressed three main objectives, as I see it: boosting government revenue, redressing trade imbalances and rejuvenating industries. Unfortunately, Trump doesn’t run on evidence or value any lessons learnt from the past, but rather seems intent on setting successive and meaningless deadlines and generally bullying governments to join his game and play by his rules. Many did, seeking meetings with Trump and/or his officials very publicly, achieving little if any improvement in their positions but enduring various degrees of humiliation in what has been little better than a global circus.

In the midst of this, it is important to give credit where genuine credit is due, by recognising the success of the Albanese government’s patient, professional and focused diplomacy, mostly conducted behind closed doors. This achieved the initially most favourable tariff rate of 10 per cent, which was then sustained through Trump’s various tantrums and iterations. This was achieved by very effective engagement by Ambassador Kevin Rudd and the Department of Foreign Affairs and Trade team starting late last year and then through the turn of this year. Their strategy has emphasised our free trade agreement with the US, and its positive trade balance with Australia, in the context of what has been an important alliance between our two countries, consistently respected by changing governments over decades.

That the Coalition remains unable to give credit where credit’s due really is a missed opportunity to show strength regarding good policy. Albanese’s achievement with his calm approach was also even more significant given the sustained pressure from our current opposition and its Murdoch media supporters continually demanding the prime minister rush over to the US to bend a knee in a face-to-face meeting with Trump. They kept banging that drum, hoping Albanese would go and be insulted, as so many others have been. The current members seem more keen to parrot Sky News demands to drop everything to make a “deal” with Trump, while offering no detail of what sort of deal he should aim to achieve. What else would the Coalition be prepared to give up to meet with Trump, with what trade-offs? At what cost? How can they ignore that Trump has form in not turning up for even scheduled meetings, as happened with both former prime minister Malcolm Turnbull, who was left sitting in a hotel lobby, and Albanese, who attended the G7 summit in good faith. Moreover, what would be the opposition’s intentions regarding the protection of Australia’s Pharmaceutical Benefits Scheme, which American lobbyists and Republican senators have expressed a particular interest in hobbling?

In Australia, we need to understand the volatility and uncertainty that is President Trump. We have to mature beyond the simplicity of believing we share common values and objectives with the US. Evidently with Trump in charge this is no longer possible. He has demonstrated he doesn’t believe in free trade, nor in the international rules-based order that remains fundamental to who we are as a nation and to the image we want to project to the world. We have to take every opportunity to demonstrate our independence and to preserve our sovereignty.

This is clearly what Anthony Albanese has been about.

The Coalition has basically continued to attempt to paint Albanese as a weak leader. I can’t help but wonder in what direction and how the Coalition could have evolved without the coercion and dark energy of Sky News. Sadly, we can’t know, and hope for better times.

The opposition is deluded if they’re imagining they would do better than this government in talks with the US, and some recent statements by the likes of Angus Taylor, Jane Hume and others should be a cause for particular concern. Taylor as shadow defence minister has all but pushed the Coalition to a joint commitment with the US to the security of Taiwan. Taylor is inclined to buckle to pressure from the US to declare what we would do in the event of a war with China, and seems all too willing to commit the hoped-for AUKUS submarines to that purpose. Opposition Leader Sussan Ley obviously had hoped that in giving him the defence portfolio he could be effectively sidelined after his very poor performances as energy minister in the Morrison government and as shadow treasurer under Dutton. But it appears Taylor has ambitions for a Taylor government and is already positioning himself to that end. Sussan, he’s never gonna be a team player.

Another issue the media and opposition have run to complicate Albanese’s task with trade relations has been to criticise his visit to China. It cannot be denied that the prime minister’s China trip was a success, further cementing the significance of our economic relationship with our largest trading partner. It was also important as a base for further trade development. The government has put considerable effort into further trade diversification as opportunities flow from the effects of Trump’s tariffs on others.

The Albanese government has also had to tread a fairly delicate line between trade and defence issues, in particular the way AUKUS is discussed and further negotiated. How embarrassing is it that Scott Morrison has recently played the role as sort of a pretend ambassador, briefing the US congress on how best to deal with China, when his relationship with China was such that neither he nor any of his ministers could pick up a phone to their counterparts. This, of course, had catastrophic consequences. Scott Morrison is hardly one to give advice on matters of international diplomacy, and it would be dangerous to allow him to drift on to explain the significance of AUKUS to a joint security commitment with the US. Our nation can’t afford to have the delicate balance that seems to have been achieved over recent months derailed so unnecessarily.

Ironically, the Trump review of our submarines deal, and the delay in releasing its findings, has given the government time to consider how best to handle the issue. Public sentiment in Australia has moved strongly against such a one-sided deal in favour of the US, given its cost and the compromise of our sovereignty. Not wanting confrontation with our major trading partner, China, it is imperative that our government makes it clear to the US we will resist any further involvement as part of the American war machine.

In this regard, Australia’s political leaders across the aisle need to accept that Trump’s America is a bigger threat to the West than China.

This article was first published in the print edition of The Saturday Paper on August 9, 2025 as "Albanese’s long game is paying off".

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