SYDNEY (Reuters) – Australian Prime Minister Anthony Albanese said on Thursday the decision by U.S. President Donald Trump to impose a 10% tariff on its ally was “not the act of a friend,” but ruled out reciprocal tariffs against the United States.
In comments outside the White House, Trump singled out Australian beef, which saw a surge in exports to the United States last year, reaching A$4 billion amid a slump in U.S. beef production.
“They won’t take any of our beef. They don’t want it because they don’t want it to affect their farmers and you know, I don’t blame them but we’re doing the same thing right now,” Trump said in an event in the White House Rose Garden announcing tariffs on a wide range of U.S. trading partners.
Australia banned U.S. fresh beef products in 2003 due to the detection of bovine spongiform encephalopathy, otherwise known as mad cow disease, in U.S. cattle. BSE poses a risk to human health and has never been detected in cattle in Australia.
Albanese said Trump had not banned Australia beef, but had imposed a 10% duty on all Australian goods entering the United States, equivalent to the U.S. baseline tariff on all imports, despite U.S. goods entering Australia tariff free.
“The (Trump) administration’s tariffs have no basis in logic and they go against the basis of our two nations’ partnership. This is not the act of a friend,” Albanese told reporters.
Australia would not impose reciprocal tariffs as this would increase prices for Australian households, he added.
“We will not join a race to the bottom that leads to higher prices and slower growth,” Albanese said.
Australian shares dropped 0.9% and the local dollar, a proxy for global risk sentiment, fell 0.5% to $0.6269.
Australian officials said countries in the Indo-Pacific region were among the hardest hit by the U.S. tariffs, with Albanese suggesting this could advantage China.
“There’s no doubt that the response on a range of issues, be it action on climate change as well as trade issues will affect the strategic competition that’s here in the region,” he said.
Australia would seek to negotiate with the U.S. to remove the tariffs without resorting to a dispute resolution mechanism in the two countries’ Free Trade Agreement, he said.
Amid the campaign for parliamentary elections set for May 3, opposition Liberal Party leader Peter Dutton criticised Albanese for not winning a tariff exemption, and said Australia should leverage its critical minerals deposits and defence alliance to quickly strike a deal with Trump.
“This is a bad day for our country,” Dutton said.
Australia had used all elements of its diplomacy, Albanese said, including seeking advice last night over dinner from sport star Greg Norman, who plays golf with Trump.
BEEF OVER BIOSECURITY
Negotiations to avoid a tariff stalled over beef as Australia insisted on U.S. meat imports meeting its biosecurity standards, Albanese said.
Biosecurity is one of three areas, alongside subsidised pharmaceuticals that lower health costs to Australians, and rules on U.S. social media platforms, raised by the U.S. as trade barriers that Australia would not compromise on, he told reporters.
Australia will offer financial support to affected exporters to help them find new markets, with a fund offering A$1 billion ($627 million) in zero interest loans, and direct government departments to ‘buy Australian’.
National Farmers Federation President David Jochinke said the tariffs were a “disappointing step backward for our nations and for the global economy”, but the industry would prevail because its farmers are “among the least subsidised farmers in the world”.
Exports to the United States are less than 5% of Australia’s total goods exports, compared to one in four export dollars coming from trade with China.
Australian steel and aluminium exports are also subject to U.S. tariffs on the metals announced in March, though its shipments to the U.S. are a fraction of the value of country’s total annual exports. Less clear is the impact from those levies on Australia’s mining sector, which supplies much of the world’s iron ore and other metal-making raw materials.
Trade Minister Don Farrell said Australia was opening new exports markets in India and the Middle East, and would seek to revive free trade negotiations with the European Union that had stalled last year over access for Australian beef.
“The world has changed,” he said.
New Zealand’s Trade Minister Todd McClay said a 10% tariff on the country, a large exporter of lean beef used in U.S. hamburgers, meant its exports remain competitive in the U.S. market, compared to nations hit by higher tariffs.
($1 = 1.5949 Australian dollars)
(Reporting by Renju Jose, Kirsty Needham, Stella Qiu and Byron Kaye in Sydney and Lucy Craymer in Wellington; Writing by Kirsty Needham; Editing by Leslie Adler, Stephen Coates and Christian Schmollinger)
By Renju Jose and Kirsty Needham
