Amid alarm stemming from President Donald Trump’s on-and-off-again tariff rise this week, let’s not lose our ability to distinguish between a mere flesh wound and amputation.
The administration’s decision to raise the global baseline tariff from 10 percent to 15 percent, after the Supreme Court ruled against earlier legislative justification, isn’t fatal for the alliance or any of the United States’ close partners, including Australia.
Pouring over what the tariffs mean strategically for Australia is folly. Of course, in Canberra the Treasury will assess sectoral exposure and competitiveness, Defence will examine what uncertainty means for industrial timelines and supply-chain integration while ministers will need to publicly defend the alliance and privately negotiate for reduced tariffs. There is, however, no risk to the alliance, to AUKUS nor to any of Australia’s strategic agreements with the US.
Recent Australian commentary has framed the new tariff not just as an economic instrument but as a politically provocative act. Coalition figures and opposition commentators have urged the government to ’push back forcefully’ against what they describe as a bullying tactic by the US administration. And political leaders have criticised the tariff as contrary to the spirit of the longstanding US–Australia trade agreement, characterisations that implicitly signal strain in the relationship.
Some commentators and parts of the media will eventually frame the tariff as symbolic disrespect: Australia meets defence spending expectations yet receives no tariff carve-out. If that idea gains traction it can hurt future or deepened engagement because public consent underpins multi-decade commitments such as AUKUS.
The fact is the US remains strategically indispensable, but it’s not Australia’s dominant export market. The US recorded a goods trade surplus with Australia of US$17.9 billion (A$25.4 billion) in 2024, with total bilateral goods trade of US$51.3 billion. Australia exported A$23.8 billion in merchandise goods to the US in 2024, around 5 percent of total goods exports, and imported A$50.6 billion.
China, by contrast, accounts for roughly 29 percent of Australia’s goods and services exports. For bulk commodities priced on global benchmarks and for iron ore, coal and liquefied natural gas, the direct macroeconomic impact of a five-percentage-point tariff shift is likely modest. The greater consequence lies in margin pressure for value-added exporters, investor confidence in advanced manufacturing and critical-minerals processing, and the signal sent when treaty allies receive no visible differentiation from systemic competitors.
Invoking Donald Trump as shorthand for alliance collapse obscures more than it clarifies. The president’s first term combined tariff activism and burden-sharing rhetoric with institutional continuity in Indo-Pacific defence settings. Tariffs functioned largely as bargaining leverage. US force posture initiatives in Darwin continued. The Quad was not only revived but elevated to ministerial level. Defence integration expanded despite rhetorical volatility. The first Trump term unsettled the alliance by signalling unpredictability, but it didn’t dismantle the alliance architecture.
The second Trump administration operates in a structurally hardened environment. While the immediate focus of the administration has been on the Western hemisphere and the Middle East, it is strategic competition with China that is now the long-term challenge and commands bipartisan consensus across Congress and the national security bureaucracy.
A second false narrative is that there is now an equivalence between the US and China as major powers using their might to achieve their aims. Since 2018, Beijing has used coercive trade measures against Australian industries (such as barley, wine and coal) to punish Australia for sovereign decisions relating to the security of 5G telecommunications, protection against foreign interference and calls for an independent inquiry into Covid-19’s origins. In doing so, China aimed at deterring other nations from insisting on their own sovereignty.
And for years we have seen Chinese militarisation of the South China Sea, bullying of the Philippines, sustained pressure on Taiwan, cyberattacks against Australia and even unwanted circumnavigation by the Chinese navy.
We might not like global tariffs that are, as Prime Minister Anthony Albanese has said, unfair, but we must be able to distinguish between questions of fairness with our ally, the US, and challenges to our national security and sovereignty that come each day from Beijing. Put another way, we want US (and British and Japanese) ships and submarines in our waters.
Claims that Australia’s alliance commitment exceeds the US’s also require discipline. Alliances are inherently asymmetric. Australia gains from the US intelligence community’s unparalleled capabilities and extended nuclear deterrence while offering the US a geographic advantage. Australia is the only nation to have fought alongside the US in every major conflict since World War I. It invoked ANZUS after 11 September 2001 and deployed forces to Afghanistan and Iraq.
This is not to ignore the risks in working with a transactional ally. Continuous risk flows from US domestic political cycles. But concurrent and far greater threat stems from China’s industrial policy and coercive capacity. Cascading risk emerges if the US and Australia become so distracted with ‘fairness’ that we fail to appropriately counter China’s malign activity.
Canberra should institutionalise tariff consultation mechanisms for treaty allies to manage continuous risk, accelerate diversification and sovereign capability to blunt concurrent risk, and embed coordinated industrial policy within AUKUS and allied frameworks to arrest cascading exposure.
Strategic competitors—meaning China and its partners, such as Russia—have fused their economic, technological and military power, and alliances that fail to align will increasingly lose technological competitiveness, the domestic narrative battle and the credibility necessary to sustain deterrence.
