Balance sheet blues
The first six months of the second Trump administration have left American allies worldwide, including Australia, in a state of shock and sullen resignation. Shock at the resumption of Trump’s global trade and tariff war, following threats to Canada, Greenland and Mexico, not to mention the harm being done to American institutions and soft power; resignation that US protectionism and the rising demands of Washington on allies to pay more for their own defence are here to stay.
On his so-called ‘liberation day’, Trump slapped a ten per cent tariff on all Australian exports to the United States. Later came the added sting of a fifty per cent tariff on steel and twenty-five per cent on aluminium. Then, US Defense Secretary Pete Hegseth served notice on Canberra, as he had on America’s European allies, announcing that Washington expected a substantial increase in Australian defence spending. And just before Prime Minister Anthony Albanese headed to the G7 summit in Canada for a much-anticipated meeting with the American president, the Pentagon initiated a thirty-day review of the AUKUS agreement signed in 2021.
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