‘Economic nonsense’: Turnbull skewers Trump’s views on trade
Former prime minister Malcolm Turnbull has derided US President Donald Trump’s views on trade as “economic nonsense” and asked Australians not to judge Anthony Albanese harshly if he cannot stop Mr Trump’s proposed 25 per cent tariff on all steel and aluminium imports into the US.
According to Trading Economics, Australia’s steel and iron exports to the United States were worth $US237 million ($377 million) in 2023, while Australia’s largest steelmaker, Bluescope, both exports steel to the US and has significant operations there.
Mr Turnbull was prime minister in 2017 when Mr Trump — then in his first term — floated a similar proposal, before being talked out of it by the then PM.
Mr Turnbull said doing so took several calls and meetings with Mr Trump, but warned that Mr Albanese, who has organised an urgent call with Mr Trump, is dealing with a more bullish and emboldened president this time.
“I know people are trying to set Albanese up to fail here,” Mr Turnbull told 7.30.
“It may be that Trump is determined to impose this tariff on every country, no matter what … in which case, it won’t be possible to secure an exemption.
“All the Australian prime minister can do is use all of his advocacy skills and play a straight bat and defend the Australian national interest.
“As with most things with Donald Trump, it’s hard to predict.”
BlueScope steel exports to the US and has facilities there. (Ainslie Drewitt-Smith, ABC Illawarra News)
Whether advocacy will be enough this time is hard to know.
In 2018, when getting the steel deal done, Mr Turnbull relied upon not only his ability to stand up to Mr Trump — which had been established in a volatile phone call over a refugee deal — but also on making him see that maintaining the status quo with Australia on trade was to America’s advantage.
That status quo still exists today as part of a free-trade deal between the nations that has existed for two decades, with more than 96 per cent of Australian exports to the US currently tariff-free.
Battling Trump’s ‘economic nonsense’
Mr Albanese, though, faces a different challenge and a different Donald Trump.
While Mr Trump’s first administration contained several key players who did not like Australia’s tariff exemption, there were also others who Mr Turnbull described as “economic rationalists” that supported free trade.
When Malcolm Turnbull was prime minister he had some tense moments with Donald Trump. (AP: Pablo Martinez Monsivais)
But he no longer sees anyone standing in Mr Trump’s way to challenge his views on trade.
“There doesn’t seem to be anybody of that frame of mind in the American administration today,” Mr Turnbull told 7.30.
“The big difference is that Trump has now got a team that clearly reflects his view of the world.
“He’s always had this mercantilist view of trade. He doesn’t believe in comparative advantage.
“He believes if a country has a … trade deficit, it’s a loser. If it has a trade surplus, it’s a winner.
“It’s economic nonsense, obviously, but he’s believed it for decades — and he’s now surrounded by people who will support him.“
Prime Minister Anthony Albanese says he will speak to President Trump as a matter of urgency. (ABC News: Adam Kennedy)
To Mr Turnbull, that’s another reason why his 2018 argument to Mr Trump — that hitting an ally like Australia with tariffs would send a negative message to the rest of the world — may not work for Mr Albanese.
“After you see what he did with Canada and Mexico … Trump basically is saying ‘might is right,'” Mr Turnbull said.
“This is a very different American president. And in fact, he’s more determined and more true to himself than he was in his first administration.”
Standing up to Trump
Mr Turnbull said America’s current trade deal with Australia is great for the US, which enjoys a large trade surplus in the relationship.
Donald Trump has been bullish on trade to start his second term. (Reuters: Elizabeth Frantz)
And he warned the government against falling into the trap of relying on the idea that Australia enjoys a special relationship with the US.
“Do not be misled by the idea that there’s any altruism in Washington towards Australia. Australians love to delude themselves to this,” Mr Turnbull told 7.30.
“If we want to be respected, we have to stand up.
“The United States government, especially with Donald Trump, acts in the national interest of the United States.
“So we’ve got to be able to make the case that it’s against their interest to impose tariffs on us.”
Asked what he would do if the US did impose tariffs, Mr Turnbull said he would consider using what he called the “one-sided” AUKUS submarine deal to retaliate.
“We should think very seriously about the payments that we’re making to support their submarine industrial base,” he said.
“We’re sending them $US3 billion to support this, their sort of languishing submarine industry, with no guarantee that we’ll get any submarines at all.”
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