Kieran Gilbert, Host: Now, on some other matters, I speak to the Trade Minister, Don Farrell. Of course, I began by asking him about the Trump tariffs. He's about to head to the United States, so I asked him will he be seeking an exemption from the latest round of the Trump trade policy.
Minister for Trade and Tourism, Don Farrell: We'll continue Kieran, with our opposition to any tariffs on our goods into the United States. We have a free trade agreement with the United States. We honour our part of that deal, and don't charge tariffs on American goods that come into Australia. We expect the Americans to do the same and provide tariff-free access to all Australian goods coming into the United States.
Kieran Gilbert: This 15 per cent global tariff, what sort of economic impact will it have on us, and what sectors are likely to be hardest hit?
Minister Farrell: Yeah, look, there's a little bit of confusion at the moment about that, to be honest, Kieran, because the executive order that President Trump signed in response to the decision by the United States Supreme Court on Friday actually says that the figure is 10 per cent. So, all we know about a 15 per cent tariff is some tweets by the President over the weekend. But --
Kieran Gilbert: So, it's just social media at this stage? It hasn't been --
Minister Farrell: Just social media --
Kieran Gilbert: It hasn't been confirmed?
Minister Farrell: No, it has not been confirmed, and the figure at the moment, based on the executive order that President Trump signed on Friday, is still 10 per cent. Now, given that he said it's going to be 15 per cent, I assume that at some stage into the future the figure will come in at 15 per cent.
The paradox, I suppose I should mention, Kieran, is that since so-called Liberation Day in April last year, our trade with the United States for most goods has actually increased.
Kieran Gilbert: Why is that?
Minister Farrell: Well, of course, we came in at the lowest level of tariffs of any country, and our competitors came in at a higher tariff. So we had a competitive advantage getting into the United States. We were very quick to take advantage of that competitive position. And by and large, both in terms of value and volume, our trade has gone up. Now, this changes the picture.
Kieran Gilbert: It does.
Minister Farrell: If there's now a 15 per cent across-the-board figure, then we are then treated exactly the same as every other country.
Kieran Gilbert: So we lose that competitive edge then?
Minister Farrell: We lose that competitive advantage. So my job now is to talk with my counterpart. We already had some meetings lined up. We'll try and do some more.
Kieran Gilbert: Is that when you're there over the next few days?
Minister Farrell: We've got the World Trade Organisation meeting in a couple of weeks' time. We were going to have some discussions about tariffs at that meeting. I'm going to try and bring that forward, so that we can talk as quickly as we can. I know my European counterpart --
Kieran Gilbert: Is that Lutnick?
Minister Farrell: No, this will be Jamieson Greer.
Kieran Gilbert: Jamieson Greer, right.
Minister Farrell: He's the most closely allied representative in the United States Government to the Trade Minister. He's called the United States Trade Representative, Ambassador Greer. So, he's the person that we mostly talk to about these sorts of issues.
Kieran Gilbert: Okay.
Minister Farrell: I've established a good relationship with him. But, you know, we have to make it very clear to them, to the Americans, that we're not happy with this decision. It's not consistent with our trade agreement, and it's not consistent with the way allies should be treating one another.
Kieran Gilbert: When you look at the debt level, though - and this is the basis upon which Donald Trump makes the argument - it's US$37.6 trillion, US debt. Last year, they paid $1.2 trillion in interest on that debt. Can you see why he wants the tariffs to help drive down that debt level?
Minister Farrell: Yeah, look, there's a couple of aspects to this. We didn't twist the Americans' arm to sign a free trade agreement with them; they freely went into that agreement. And when you reach agreements, international agreements, you should honour them. That's the first point here.
Secondly, you might recall, originally, President Trump put a 10 per cent tariff on beef from Australia into the United States. We argued that all you're going to do is push up prices in the United States, and that's exactly what happened.
Kieran Gilbert: Hamburgers. Yeah.
Minister Farrell: They eat a lot of hamburgers in the United States, Kieran. And that's exactly what happened. So what did President Trump do? He removed that tariff because, simply, it was pushing up prices. So there are other aspects to the economy that get affected when you make these changes.
Now, interestingly enough --
Kieran Gilbert: But he has paid down debt to an extent with the tariff revenue.
Minister Farrell: Well, good luck to him. Good luck to him for that. But there is a cost to ordinary Americans in terms of their standard of living. They're paying more, inflation is going up, they're paying more for things. So, you know, that affects ordinary Americans. And so, we think that, look, we have an agreement. All we're asking them to do is to honour that agreement.
Kieran Gilbert: Given our debt is up near a trillion - $995.5 billion at last check, should we be looking at something like tariffs to try and pay down our level of debt?
Minister Farrell: No.
Kieran Gilbert: We paid $25 billion in interest last year.
Minister Farrell: No. We're a trading nation. We believe in free and fair trade. The best thing I can do as Australia's Trade Minister is to boost our trade to increase our income, increase the wages that employees get, increase the profits that Australian companies make. And how do we do that? Well, we expand our free trade agreements. So the last couple of weeks I've been talking with my European counterparts --
Kieran Gilbert: Yeah, how close is that? Because von der Leyen was supposed to come last week. Apparently there's talk she might come in the next few weeks. If she schedules her visit, we can expect the signing of a deal?
Minister Farrell: Look, I think we're just one step ahead of ourselves there, there Kieran. We haven't yet got an agreement with the Europeans.
Kieran Gilbert: It's close, though, isn't it?
Minister Farrell: It is close, and we've made more progress in the last few weeks than in the last 25 years. I again spoke to my counterpart Maroš Šefčovič over the weekend. When I get back from America, we'll be talking again. We are close to a deal, but until everything is agreed, nothing is agreed.
Kieran Gilbert: Are you confident though?
Minister Farrell: I'm optimistic. And I think what President Trump has done over the weekend gives us further impetus. We have to be able to demonstrate as a trading nation that we believe in free and fair trade, and we can find other trade partners in the world.
Kieran Gilbert: Will it include meaningful access for our agriculture, any deal?
Minister Farrell: We won't agree to anything that doesn't give us fair access to the European market for our agricultural products. The last few weeks, the Europeans reached agreement with the Indians, but there was no access to agricultural products for the India free trade agreement with the Europeans. But we want --
Kieran Gilbert: But you want access for Australian beef?
Minister Farrell: Yes --
Kieran Gilbert: Improved access?
Minister Farrell: -- For all of Australian agricultural products we want access to the European market. I believe that there's a willingness on the part of the Europeans --
Kieran Gilbert: Is this the sticking point? Ag and beef particularly?
Minister Farrell: There are a few last-minute sticking points, as I told one of your colleagues, Andrew the other day. It's not appropriate to do this negotiation on TV.
Kieran Gilbert: No, no.
Minister Farrell: I've got to do this with my counterpart. You know, he will expect confidentiality with me; I expect confidentiality with him. But, look, I think there's a determination on both sides, made more important by the decisions in the United States over the weekend, to get this deal done.
Kieran Gilbert: Trade Minister Don Farrell, safe travels to the United States. Thanks for your time.
Minister Farrell: Nice talking with you, Kieran.