Tariff storms push Australia toward crisis
Albanese's team must act—join hands with Asia or risk oblivion in a multipolar world.

Just three months into his return to the White House, United States President Trump has sent ripples through global trade markets with the introduction of tariffs designed to boost U.S. manufacturing and reduce trade deficits. The decision has sparked predictable chaos, resulting in stock market volatility, supply chain disruptions, retaliatory tariffs, and nations worldwide reassessing their relationships with Washington—from peer competitors like China to once-thought-unshakable allies like Australia.
The precursor to this crisis stemmed from a series of deceptively simple exchanges. China met the trade war with preparation, doubling down in response to Trump’s hurried volley of trade restrictions. Trump initially imposed tariffs on China at 34% before raising them to 84%. China responded in kind. After splashing the pot with his first call, still hoping his bluff would hold, Trump upped the ante to 145% tariffs, but China’s President Xi Jinping called the bet with a stone face. With too many chips on the table and few cards in his hand, Trump gestured that his opponent should check the next round of betting, announcing that he was ready to "make a deal." Xi wanted to play out the hand. Trump folded.
A historic $10 trillion melted off major global markets in a single day. China began offloading U.S. bonds, later joined by Japan and Europe, as stock markets crashed—all in response to a full-scale trade war. While the wheels were falling off global markets, and semiconductor and rare-earth supply chains were being reimagined, mid-election campaign, Prime Minister Anthony Albanese delivered a series of compartmentalized scoldings in response to the impact of Trump’s tariffs on Australian trade. Meanwhile, Opposition Leader Peter Dutton mumbled his way through the disaster after trialing sporadic MAGA-lite Temu impressions of the U.S. President for the last six months, offering nothing more than a performative expression of disappointment as a response.
As the world stirs and reality sets in, many countries are powering down the U.S. autopilot system that has guided their economies and are starting to steer manually in their national interest amid the chaotic turbulence generated by Trump’s tariffs. The compounding nature of this unprecedented situation begins to weigh on the trading nations of the modern world, turning the possibility of a global economic crisis into a reality. Australia seems frozen in the eye of the storm, with one foot in the high-pressure system of the United States’ military umbrella and the other dangling in the cold front that holds its beneficial trade relationships with Asia.
With a free trade agreement in the bin and a splintered economic connection with Washington that had been tenuously developed over decades, there has been no response from the Federal Government that reflects this urgent reality—nor does one seem forthcoming. Beset by an AUKUS wedge and overcommitted to the waning tail of Biden’s iteration of "America First," despite knowing Trump’s version would follow, Australian decision-makers are frozen in suspended animation. As a consequence, Australia looks like one of the more immobile respondents, missing the opportunity to make the most of a bad situation.
While the EU busily prepared to negotiate the abolition of EU tariffs on Chinese electric vehicles, and nations worldwide hit the drawing board to develop new sovereign strategies in response to U.S.-imposed tariffs, in Australia, Richard Marles took a bold stance. So early in the wake of the monumental tariffs, as the true magnitude of the situation was only beginning to unfold, Marles stated rather definitively that his government would not "join hands" with China in a unified response to the tariffs coming out of Trump’s White House. This definitive statement came at a time when global markets were anything but certain, and a kinetic, visceral economic chaos was developing at a rapid and unpredictable rate—another glaring example of the lack of political instinct and the absence of ability within our political class to keep any of our sovereign powder dry.
All the talk of U.S. tariffs and their effects on the Australian economy drones through the same rancorous echo chambers, equipped with a slew of poorly thought-out, outdated responses from the subjective media. Meanwhile, the less compromised press in other countries—some of whom we claim to share values with in the OECD—are scrambling to redefine the narrative and reimagine the perception of their relationship with the United States at a fundamental level. In Australia, free-range pundits and ASPI strategists know nothing but to advocate full-steam-ahead for Washington. They have spent the last decade suggesting we sever our sovereign appendages, leaving us a diplomatically powerless nation. In the process, as the early warning sounds the arrival of "Cyclone Trump," Australians realize there is hardly a serious thinker given a page to write upon in this country, nor a politician willing to pull their head out of the sand to see what’s coming.
John Lyons, the ABC’s global affairs editor, published one of the first rays of clarity that cut through the murky clouds of subjective and manipulated information in this country. His straight-up-and-down analysis gave consumers a clear understanding of the uniquely consequential situation. His article gave airtime to Australia’s former Ambassador to China, Geoff Raby, who called Trump’s move "one of history’s greatest acts of self-harm," and to Professor Hugh White, who simply called the current U.S. administration "stupid." A few days later, as the situation became unpolishable and the true transformative nature of the crisis kicked in, the commercial press tentatively followed suit.
A new status quo is being imposed on many countries that once considered themselves irreplaceable allies of the United States. Trump’s actions have dismantled long-established diplomatic and trade relationships. Countries faced with brutal ultimatums from a supposed friend are within their sovereign duty to reassess the nature of this relationship and the economic dependence attached to it. Trump’s hostile actions urge the nations of the globe to reimagine their national outlook, think more about a multipolar world, and demand protective action. Any government that stands in the way of this will do so at the expense of its democratic viability and, ultimately, its country’s national interest.
Chinese Ambassador Xiao Qian wrote an op-ed in the Nine papers about the need to resist "the hegemonic and bullying behavior of the U.S." The hand that was so hurriedly slapped away by Richard Marles offered the words: "China stands ready to join hands with Australia and the international community to jointly respond to the changes of the world." Australia remains frozen between a dangerously outdated framework—a delusional belief that the U.S. is a responsible big brother who will guide us through the strange and different-valued jungles of Asia—and, more dangerously, an ignorance of the fact that none of this is true anymore.
A devastating round of polling for the Coalition, equipped with a briefcase full of empty policy and an unlikable leader, suggests we are now seemingly only weeks away from what looks like the return of another ALP government. Now could be the best time for the Albanese team to offer a strategy to meet this challenging reality, to reach out to the region, and to reconsider joining hands. Because with barely three months elapsed of four more years of Trump, and with a popular public response to sovereign messaging from the government in these uncertain times, those hands may not be outstretched in the emerging multipolar future. We may come to curse the stubborn shortsightedness of figures like Richard Marles down the track.
In some form of neo-Monroe Doctrine, Trump is shaking down Canada, Mexico, Panama, Venezuela, Cuba, and anyone that isn’t Milei’s Argentina, while in his region, Xi is further consolidating relationships with his neighbors, some of whom hold centuries-old rivalries. Xi is building bridges while Trump hammers the knuckles of his key allies around the globe. Amid all these rapid tectonic shifts, Australia remains stuck in a stagnant quagmire, with feet planted in the shaky ground of both camps. Our leaders still speak in the trampling language of Washington while taking a have-your-cake-and-eat-it-too approach to our existential diplomatic and economic relationships in Asia. Tethered dangerously to imploding U.S. markets and the vital trade relationship with Beijing—at the bottom of the global supply chains—Australia has never looked so close to oblivion, or so far from a solution.
Australia has comprehensive trade agreements in place with Asian countries.
https://www.dfat.gov.au/trade/agreements/in-force We should now institue reviews of these with each signature country to ascertain whether any need updating/expanding. We should be making a top priority of restarting the European free trade negotiations, stalled over market access for Australian agricultural products and geographical indicators. (Calling Australian Parmesan Cheese Parmesan etc). Australia has very few trade barriers so the response from Albanese has been ok given that we can work around our direct trade issues with the US. Don’t react straight away and put it all on the table, wait until you see how the situation unfolds. It is changing and evolving daily. Our bigger trade concern are the secondary effects from the US tariffs and how they impact the China and global economy. And that is why Males knee jerk response was so very poor and shallow.
Defence via the now very leaky US umbrella is the urgent issue. AUKUS always problematic is now clearly not fit for purpose. Every expert says that. There are viable much cheaper alternatives and these should involve our close northern neighbours, all whom are rapidly building their submarine capacity. ASPI in what appears to be its current primacy advice role is also not fit for purpose and no longer serves Australia’s best interests. We need an expert contested advice framework. Richard Marles does not appear capable of formulating or articulating a comprehensive position that puts Australia’s interests first providing and expanding our options rather than narrowing. He seems very susceptible to courting by the US. He continually steps into Penny Wong Foreign Affairs area of advice.
Brilliant analysis. Thanks Joel