Australia has announced it will not escalate with retaliatory measures on April 2 when reciprocal trade tariffs imposed by U.S. President Donald J. Trump take effect. While he declared the steel and aluminum tariffs unjustified, Australian Prime Minister Anthony Albanese announced on Wednesday that his country would not impose any tariffs of its own in response.
“It has been foreshadowed that no country, regardless of its relationship with the United States, has been granted an exemption,” Albanese said, complaining: “Such a decision by the Trump administration is entirely unjustified.”
Albanese continued: “Tariffs and escalating trade tensions are a form of economic self-harm and a recipe for slower growth and higher inflation. They are paid by the consumers. This is why Australia will not be imposing reciprocal tariffs on the United States.”
While the Australian Prime Minister insists that tariffs will slow economic growth and increase inflation, neither of these statements is necessarily true. Canada, for instance, has long enjoyed robust economic growth despite having high barriers to foreign imports. In addition, The National Pulse has previously reported that there is little evidence that trade tariffs contribute to inflation.
The Australian government contends they should receive a similar exemption to the tariffs that they were granted in 2018. Then, Australian Prime Minister Scott Morrison argued one of his country’s top steel companies, BlueScope, was also a major employer of U.S. workers, managing to secure an exemption from the 2018 tariffs.
Notably, Australia currently benefits from increased U.S. military spending on a critical submarine and naval base project that is part of the AUKUS treaty enacted during President Trump’s first administration.
