Comment

John Hewson
Fifteen minutes with Trump

High expectations had been set for Prime Minister Anthony Albanese’s meeting with United States President Donald Trump on the sidelines of the G7 summit. Opposition Leader Sussan Ley sent him off with the relatively constructive comment that, “The Coalition wants the government to succeed here because that is in our national interest.” There was much to discuss in only a brief interlude: an exemption from tariffs, clarity on AUKUS, some pushback on America’s recent demands for a major increase in our defence spending. Perhaps it is as well that meeting could not go ahead, with Trump puffed up and distracted, cutting his Canadian appearance short to devote his attention to the Israel–Iran attacks.

Another opportunity for them to meet could come as soon as next week, at the NATO summit in the Netherlands. In the meantime, unsurprisingly, Ley has seized the opportunity to pile on, observing that, “The prime minister should have been more proactive in seeking to strengthen this relationship – Australia's most important – and we encourage him to change his approach to advance our national interest.” Ley’s comment ignores the enormous amount of work done by ambassador Kevin Rudd, the Department of Foreign Affairs and Trade and other officials to try to set up this meeting.

Perhaps we would all benefit from hearing exactly what Ley proposes Albanese should do. Same old problem: no detail. No doubt certain factions in the media will also run hard against Albanese, failing to either understand or address the quicksilver nature of the US president and the volatility of the ever-changing situation on several fronts overseas.

What could Albanese realistically be expected to achieve, against the background of all that is Trump, in a few minutes on the sidelines of a conference the US president never wanted to attend? He left Washington with the clean-up still under way from nationwide protests, involving millions of Americans responding to the military parade in the capital with placards saying, “We won’t bend a knee to a king”. These crowds clearly demonstrated that they see through his delusion about turning the US into a monarchy – to his mind the ultimate autocracy, if not dictatorship.

Trump’s only interest in defence seems to be numbers and money, ratios to GDP, while Albanese is focused on what is needed to ensure Australia’s national security. Trump’s whole demeanour in his political life seems to have been driven by the obsessive belief that he was born to rule, transferring his posturing from his performance in the reality TV show The Apprentice, stacking his “court” with sycophantic supporters and unqualified appointments. Beheading has been replaced by deportation, and facts replaced by his “truth”. Since watching the Bastille Day celebrations in 2017 with French President Emmanuel Macron, Trump has been enamoured of parades of troops in uniform and military assets, like a kid who wants to grow up to be Spider-Man. He is also clearly not concerned about wasteful spending, judging by his One Big Beautiful Bill – a pay-off to the rich at the expense of the poor, and one that promises to add trillions to the country’s deficit. What’s a mere US$45 million for the 250^th anniversary of the US Army, to conveniently coincide with Trump’s 79^th birthday?

It’s only fair to cut Albanese a little slack. There may be a better moment to make his extensive case and, in the meantime, to strengthen his resolve.

Many in our media seem intent on whipping up the hysteria of “deal or no deal?” – will the prime minister be sucked into Trump’s game by attempting concessions? This would be most unwise. I suggest that Albanese would be more likely to show Trump what it means for him to put Australia first, as he has indicated he would, setting limits on what’s feasible and ruling out terms counter to our national interests. In relation to the tariff exemptions Albanese seeks, for instance, he has flagged that weakening our Pharmaceutical Benefits Scheme, or compromising our biosecurity regulations to allow US beef imports, is non-negotiable. He will also want to spell out that Australia sets its own defence policies, as he has quite clearly stated on a number of occasions. He might even earn Trump’s respect with such an approach.

This meeting will not happen, but in any case the backchannel work between the trade and defence bureaucracies of the US and Australia presumably continues. So far we can only question the logic of the strategy being pursued among the representatives on the US side – given Defense Secretary Pete Hegseth’s suggestion at the recent Shangri-La Dialogue that Australia should raise its defence spending to 3.5 per cent of GDP. That was more than had been discussed previously, and it seemed to be a number plucked out of the air. How can we be confident that there is any agreement among the Americans about what is being demanded of us?

On the detail of our defence strategy, when he gets the opportunity, Albanese ought to make it clear, right from the start, that Australia would like to dispel any perception that we are merely a part of the US war machine. He should assert that we will oppose being drawn into any conflict in support of America against China, certainly over Taiwan. As Albanese has already pointed out, we have already given considerable ground to the US, in terms of accommodating bases and troop deployments in Australia. This could become quite an important consideration if the recent rumours of the sale or lease of the Port of Darwin to an American entity were to become a reality. I can’t imagine that any Australian would want a US naval base in Darwin, to replace the Chinese lease.

In a similar vein, we should be very protective of our competitive edge in critical minerals and rare earths, especially as the US is getting desperate in this area, given China’s dominance. We need finance for their effective development, but we certainly should want to keep control, and benefit from the process. These resources are not something that should just be offered up in the hope of better trade relations. In any case, we should have no trade dispute, given our so-called “free trade agreement” and our trade deficit with the US. Trump nevertheless has been happy to ignore these facts and the value of our long-term alliance.

The elephant in the room when it comes to our defence discussions is, of course, the AUKUS agreement between ourselves, the US and the United Kingdom on the provision of nuclear submarines. The US says it is now in the process of reviewing this agreement, though both Trump and UK Prime Minister Keir Starmer made supportive gestures on their commitment to the arrangement at the G7. Rather than approach Trump with fear that he intends to increase the price of the subs or otherwise renege on related US commitments, Albanese, I hope, will seize an opportunity to also revisit the agreement – possibly even to extricate ourselves from the deal, which has been widely condemned across Australia.

The main criticisms have included that it is far too expensive and one-sided in favour of the US, requiring us to commit billions of dollars to America’s submarine manufacturing industry without any guarantee of ever receiving a vessel within an acceptable timeframe. The worrying chat is that Trump may have gone soft on the idea, as the US is simply not producing subs at a pace sufficient to meet its own requirements. The deal has also been criticised for the loss of our sovereignty in defence matters, such that the US will influence, if not control, the deployment of the submarines. The main fear is that they would be deployed to sit along the Chinese coast as a deterrent in a US confrontation with China, locking us into a conflict that is certainly not in our national interests.

Beyond this is the ridiculous cost of some $360 billion, at a time when aggregate government spending must be reined in. Having so much committed to AUKUS constrains Australia’s ability to make other, possibly more effective, allocations in our defence budget. It is offensive also that the original proponents of the subs agreement in the Morrison government are now conspicuously benefiting from advisory roles in relation to it.

In terms of the straight economics, it has never really been established why we need to spend so much on nuclear submarines. What is the case for nuclear rather than conventional subs? Canada, with a far longer coastline to survey and defend, bought a dozen conventional subs from Europe with support, for just $50 billion – about a seventh of the cost of the AUKUS subs with much quicker and more dependable delivery.

Finally, an increasingly important issue in the global tariff and tax debate – and one that needs far more attention – is carbon border taxes. The disparity between those countries that are seriously working to reduce their emissions consistent with Paris targets, and those that are trying to continue business as usual, is expanding rapidly. It’s likely that countries that feel most disadvantaged, on top of what they feel generally about Trump’s tariff wars, will soon seek to tax those that are trying to exploit the situation. This is a possibility from European nations, which have been more focused on the low-carbon energy transition relative to the US, and even Australia, where we have aspired to be a world leader in the adoption of renewables.

All this and more emphasises the difficulties of negotiating with Trump. He has shown little understanding or care for the economic realities in his own country, let alone those in Australia, or indeed the rest of the world.

For almost a decade, The Saturday Paper has published Australia’s leading writers and thinkers. We have pursued stories that are ignored elsewhere, covering them with sensitivity and depth. We have done this on refugee policy, on government integrity, on robo-debt, on aged care, on climate change, on the pandemic.

All our journalism is fiercely independent. It relies on the support of readers. By subscribing to The Saturday Paper, you are ensuring that we can continue to produce essential, issue-defining coverage, to dig out stories that take time, to doggedly hold to account politicians and the political class.

There are very few titles that have the freedom and the space to produce journalism like this. In a country with a concentration of media ownership unlike anything else in the world, it is vitally important. Your subscription helps make it possible.

Send this article to a friend for free.