The recent developments in international relations between Australia and the US have been marked by a delicate dance of diplomacy and trade tensions. Australian Prime Minister Anthony Albanese's decision to raise defence spending to 2.2% of GDP, while falling short of the 3% demanded by the Trump administration, has sparked concerns about the potential for tariffs on Australian exports.
The issue is particularly pressing in the context of pharmaceuticals, with US President Donald Trump expressing willingness to cut deals on reciprocal tariffs that could target this industry. Albanese has expressed a willingness to discuss tariffs with Trump, but it remains unclear how seriously he is considering a universal tariff.
The situation is further complicated by the fact that new tariffs on Australian agricultural exports are set to take effect on April 1, alongside new import taxes on pharmaceutical exports unless an exemption is secured. This has raised concerns about the potential for a trade war between Australia and the US, with Albanese's approach to Trump remaining a point of contention.
The Australian government is seeking to ease trade tensions with the US, but the issue remains unresolved.