Extract from ABC News
Analysis
Donald Trump says the US will place tariffs of at least 10 per cent on foreign imports. (AP: Evan Vucci)
Donald Trump announces plans to impose tariffs on Australian imports.
Beef with Aussie imports
Australia will be captured by the US's new minimum "base" tariff — all Australian goods exported to the US will cost Americans 10 per cent more, the same rate as has been applied to the UK.
In the Trump tariff shake-up, 10 per cent appears to be the figure applied to countries not seen as tariff offenders.
The fact Australia mostly has a trade deficit with the US has presumably ensured that we are hit with the lowest of all the tariff penalties.
But that also raises the question: putting aside Australia's strategic importance to the US, why should a country with a trade deficit be hit with any penalty?
This new tariff regime is merely the beginning of a whole new process.
What Trump showed in his first term — and has reinforced in the first months of this second term — is that his world is a constant negotiation.
In his White House address to announce the changes, Trump made clear that he believed countries around the world were trying to "rip off" Americans.
He named Australia, particularly in relation to beef exports to the US.
Australian beef is among the items that will become more expensive for US consumers under Trump's tariffs scheme. (ABC News: Marty McCarthy)
Trump said that when it came to tariffs, in many cases "the friend is worse than the foe".
While Australia has in recent weeks been lobbying heavily, new efforts will immediately begin to try to get the 10 per cent on all goods reduced to zero if possible.
The key to what is happening at the moment is the psychology of Donald Trump.
Tariffs in Trump's sights for decades
This new world order of trade is driven by a central belief of President Trump: that the US, over decades, has built one of the world's biggest and most successful economies but over many years other countries have tried to take advantage of that success, reducing the wealth of Americans.
He believes that by imposing these taxes on goods coming into the US he will earn money to pay down US debt levels.
He argues that to get around these tariffs many companies currently based in countries such as Japan or Malaysia should set up factories in the US, creating US jobs and reviving the country's long-struggling manufacturing.
Trump said the trade tariffs would help America prosper and bring in a "golden age". (AP: Mark Schiefelbein)
Trump's rhetoric when announcing the tariffs as part of what he called "Liberation Day" gave insights into his outlook.
Foreign leaders had "stolen our jobs," he said; the US and its taxpayers had been "ripped off" for more than 50 years; this was one of the most important days in American history.
Other countries, Trump said, created non-monetary barriers to "decimate" our industries and created "filthy pollution havens."
While there will be resistance from Americans as the prices they pay increase, Trump will use his considerable political skills to try to convince them that the tariff path is the way to go.
In his comments, for example, he argued that Americans were vulnerable because of the current trading system.
He gave the example that in a time of war it could be a problem as the US was reliant on imported pharmaceuticals.
The subtext being that by imposing this tariff regime the US would develop its own domestic supply chains for products such as pharmaceuticals.
Trump is saying that by prying open foreign markets he will usher in "the golden age of America."
"Now it's our turn to prosper,"he said.
Trump spoke about what he sees as an imbalance of car imports and exports as he announced the tariffs. (Reuters: Mike Blake)
President Trump gave one example in his White House address highlighting the situation as he sees it: that 81 per cent of cars sold in South Korea were made in South Korea — and that while Toyota sells 1 million foreign cars into the US, US car maker General Motors sells virtually none into Korea.
For decades Trump has believed that should he ever be in a position to do so he would attempt to dismantle the tariff system.
He's now in that position.
Having amassed an enormous amount of power — perhaps the most powerful president in history — Donald Trump is now pushing ahead with his agenda.
One thing with Trump is that this policy, and others he's pursuing, were clearly flagged during his election campaign.
In his White House address to announce the tariffs, Trump held up a chart showing two columns — the first was the impost he said the countries were charging the US while the second column was the rate that he said the US would impose, in response.
But he referred to "discounts" — saying that the US had decided not to match full rates.
The chart included China, which he said effectively added a 67 per cent impost on top of the normal price while the US, in response, would impose 34 per cent tariffs on China.
Others on the Trump chart included the European Union charging the US 39 per cent (US to impose 20 per cent in these new tariffs); Vietnam 90 per cent (46 per cent); Taiwan 64 per cent (32 per cent); Japan 46 per cent (24 per cent); India 52 per cent (26 per cent); South Korea 50 per cent (25 per cent); Thailand 72 per cent (36 per cent); Switzerland 61 per cent (31 per cent ); Indonesia 64 per cent (32 per cent ); Malaysia 47 per cent (24 per cent); UK 10 per cent (10 per cent); South Africa 60 per cent (30 per cent).
Trump showed a large chart listing the tariffs for several countries, with China at the top. (AP: Mark Schiefelbein)
Burgers, vegetables and car parts up
Donald Trump is something of a rare breed in modern politics — in general he does exactly what he says he's going to do.
He's a true ideologue — his ideology is so strong, and his self-confidence so great, that (so far at least) he is not allowing political considerations to intervene.
But that self-confidence will be tested in coming months.
While middle and working class America like much of Trump's rhetoric, the US financial markets are uncomfortable with many of his policies.
They do not like this scorched earth tariff policy as it ushers in enormous uncertainty.
How will China react to the 34 per cent tariffs it has just had imposed on it? Will the European Union simply accept the 20 per cent tariffs imposed on all European exports to the US? Is this the beginning of a major new trade war?
So while Wall Street ponders a major retreat from US stocks, the American consumer will be another pressure point for Trump.
Within weeks the US consumer will begin feeling the pain of higher prices.
Watch the price of McDonalds burgers increase as the beef inside them, from Australia, goes up 10 per cent.
Watch the cost of fruit and vegetables from Mexico increase, as well as auto parts from Canada.
How much will this worry Donald Trump? He doesn't need to face re-election, although he has begun talking about the possibility of a third term.
For that, he would need to try to change the US Constitution.
By nature, Trump is the ultimate crash-through politician.
Will he do something he rarely does — read the room of discontent from financial markets, American consumers, traditional friends and allies and the obstacle of the constitution?
Or will he take on all these realities at once?
If he decides to try to crash through, the world is facing a very rocky few years.
Trump's new trade tariffs will start to drive higher the price of goods in the US within a few weeks. (AP: Evan Vucci)
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