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3 Dec 2024 23:50
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  •   Home > News > International

    Trump, tariffs and a big turn on climate: What the US election result might mean for Australia

    The US is Australia's most important military ally, one of our biggest trading partners and a critical diplomatic partner in the Indo-Pacific.


    Few things can command the attention of just about all of Parliament House in Canberra, particularly on a busy sitting day.

    But when polls close in the US next Wednesday morning (Australian time), you can guarantee eyes will be glued to the election night count.

    It is undoubtedly a hugely consequential election for the United States, with two presidential candidates offering a vastly different vision of the next four years.

    But given the enormous global influence of the US, the consequences spread well beyond its borders — including across the Pacific, and onto Australian shores.

    The US is Australia's most important military ally, one of our biggest trading partners and a critical diplomatic partner in the Indo-Pacific.

    So what would a Trump victory, or a Harris victory, mean for trade? For AUKUS? Or climate?

    Here's what the outcome might mean for Australia.

    'A huge amount at stake'

    There are a range of very tangible possible consequences from next week's election, such as new tariffs that might impact Australia, or a withdrawal from global efforts to combat climate change.

    But some foreign policy experts point to a less easily measured impact as potentially bringing the greatest consequence.

    Michael Fullilove from the Lowy Institute said Australia should be worried about the unpredictability and instability that could come from the election result, particularly if it was contested.

    "It's in Australia's interests when the United States is well governed, cohesive, attractive and strong. So I hope that we don't see any repeat of the January 6 crisis of political violence," he said.

    "I hope that the loser accepts defeat.

    "And I hope that whomever is elected governs well. Foreign policy begins at home; if you're not strong at home, you can't be strong abroad."

    Aside from the many 'firsts' that come with Kamala Harris's campaign — like being the first Black woman to run for president — she is seen as a fairly conventional candidate, who would run a fairly standard administration.

    Donald Trump is deliberately offering quite the opposite.

    Michael Fullilove said there are lessons from Mr Trump's first turn as president in dealing with an unpredictable, and at times impulsive, administration.

    He said those who managed Mr Trump best did so respectfully, but without simply playing to his ego.

    "The best way to manage your relationship with Mr.Trump is to be pragmatic," he said.

    "Don't sneer at him, but don't gush at him either. Show him respect in public, but stand your ground in private."

    Trade wars and tariff tensions

    There's little doubt that a new Trump administration would make tariffs a big feature of its trade agenda.

    And given the US is Australia's third-largest two-way trading partner, those could directly hit local industries.

    Donald Trump has promised a tariff of 10 to 20 per cent on all imported goods.

    He argues it would prove to be a huge revenue-raiser for the government, and help make American manufacturing more competitive.

    There is no clarity on how that would work with the United States' many trade agreements, including the Australia-US free trade agreement, which makes the vast bulk of Australia's exports tariff-free.

    During the last Trump administration, Australia avoided new tariffs on steel with some careful diplomacy.

    But whatever impacts Australia might cop, they will likely pale in comparison to what is heading China's way.

    Trump is promising a 60 per cent tariff on all goods imported from China, the largest source of imports into the US.

    China has warned against the policy, saying it has no interest in a trade war.

    Michael Fullilove said even if Trump can only achieve some of his trade agenda, the impact on Australia would be noticeable.

    "He won't do all the things that he's promised to do, but the net effect for a trading country like Australia surely has to be negative," he said.

    The concern is that Australia might be caught in the crossfire — and that a trade war could trigger a slowdown in China's economy, which would drag Australia down with it.

    It is worth noting that a return to tariffs as trade policy has been somewhat bipartisan in the United States.

    The Biden administration has chosen not to unwind any of the first Trump administration's tariffs, or revisit his changes to trade deals with countries like Mexico.

    And it has introduced very heavy tariffs of its own — like a 100 per cent tariff on electric vehicles from China, and substantial hikes to tariffs on steel, semiconductors and solar panels.

    There is no indication that Kamala Harris would take a different approach to Joe Biden in office.

    Climate conflict under Trump

    The US election comes at a fairly critical point in global efforts to combat climate change, and the difference in position between the two candidates could not be more stark.

    Donald Trump's position on climate can be neatly summated in his own words — "drill, baby, drill".

    Mr Trump's overriding stance is that little to no effort should be made to combat climate change, and the US should focus on its strengths in oil and gas.

    He has called climate change "one of the greatest scams of all time" and has pledged to "unleash American oil and natural gas production", pushing through approvals for new projects.

    He has similarly pledged to unwind federal support for many renewables, particularly wind power.

    On the global front, he would pull the US out of the Paris climate agreement for the second time, having made the same step during his first term in office.

    But he could go further this time, potentially withdrawing the US from the broader UN-led framework to combat climate change, which would be a more permanent step than simply pulling out of Paris.

    Australia is a signatory to Paris, and along with 194 other signatories, will have to in coming months stump up a 2035 emissions target.

    Richie Merzian, chief executive of the Clean Energy Investor Group, said one advantage for countries working towards addressing climate change is what they learned from the last time Trump was in power.

    He said one encouraging sign from the last Trump administration was a counter-effort within the US to act on climate, led by state and city administrations.

    "What you did see was this huge coalition built by state governments and by cities in the US that collectively represented the third largest economy in the world," he said.

    "There's a lot of support for climate action in the US that will continue despite Trump."

    Climate convention under Harris

    Kamala Harris would likely keep up the momentum built by the current president, Joe Biden, through his signature Inflation Reduction Act.

    The bill included $578 billion in spending on climate efforts, mostly tax credits for renewable energy projects.

    Donald Trump is no fan of the Inflation Reduction Act, but given it has been legislated, and much of its funding has already been spent or committed, he would have a hard time totally unpicking it.

    The bill sparked a flurry of similar investment in countries across the globe competing to build new renewable industries — including the Albanese government's move towards tax credits for sectors like renewable hydrogen.

    Climate hasn't been a central feature of Kamala Harris' campaign — she mentioned it just once in her 40-minute speech to the Democratic National Convention.

    And while her campaign promotes the Biden administration's efforts to boost renewable power, it also highlights increases in US oil production.

    But climate advocates think that has more to do with politics, than a lack of interest in the issue.

    They argue there would be little to gain for Harris in campaigning on climate, given voters with an interest in the issue are unlikely to back Donald Trump.

    Richie Merzian said those in climate policy know Kamala Harris, and are confident she will be active on the issue.

    "Kamala Harris is a well known entity," he said.

    "She attended the last COP (UN climate summit) in Dubai as vice-president, and has a history as a litigator against fossil fuel companies.

    "So her leadership on this issue stands, regardless of how prominent this is in the election."

    Agreement on AUKUS

    The AUKUS agreement has moved to the centre of the Australia-US defence relationship, as the military superpower agrees to share its secret nuclear submarine technology.

    AUKUS is a very long-term arrangement, not delivering its first Australian-built nuclear submarine until the end of the next decade.

    That relies on the consistent agreement of ongoing US administrations, and for now, that looks relatively likely to be the case.

    Despite her time as vice-president, not much is known about Kamala Harris's approach to foreign policy.

    Most expect a level of continuity from the Biden administration's approach, including on arrangements like AUKUS.

    While little is known about how Donald Trump would approach AUKUS, there are some indications that he would be unlikely to totally unwind it.

    China's role in the Indo-Pacific is a shared concern among Democrats and Republicans, and AUKUS has support across the aisle too.

    Lowy's Michael Fullilove put a question on AUKUS to Trump's running mate, Senator JD Vance, months before he became the vice-presidential nominee.

    "I asked JD Vance about AUKUS at the Munich Security Conference in February, and he said he's a fan of AUKUS," he said.

    But he warns Donald Trump can be much more unpredictable.

    "Trump quite likes reneging on deals that his predecessors have made. So, the risk is that he may push for a better and more lucrative deal for the United States," he said.

    "He likes to say 'the deal that the last guy did was the worst deal in history, and therefore I need to get more for my side out of this deal'.

    "AUKUS will probably be OK. But Canberra can't assume that President Trump wouldn't re-litigate the matter."

    Michael Fullilove said there is no doubt it'll be a nervous few days in Canberra, watching the election play out across the Pacific.

    "The US is the most important global actor, the only country that runs a truly global foreign policy," he said.

    "The US is central to solving almost all of the challenges facing the world.

    "Having a president who is successful, who is well informed, who genuinely believes in American greatness is in Australia's interests.

    "I think there'll be a significant amount of nervousness in Canberra as the results roll in."

    © 2024 ABC Australian Broadcasting Corporation. All rights reserved

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