I WRITE to you this week from Canberra in a week which most of us expect to be the final sitting fortnight before the election.
On Tuesday Prime Minister Albanese had his scheduled chat with U.S. President Donald Trump and pretended he’d made great progress on Mr Trump’s tariff threat.
Who knows where that will now stand by the time you read this – the Trump Administration Mark II is unpredictable.
A tariff is a financial penalty a country can charge at the border on goods from another country.
Tariffs have largely been going out of fashion in global markets but Mr Trump’s ‘America First’ platform is built on reinstating tariffs.
Isaac Newton observed that every action has an equal and opposite reaction, and so it goes with tariffs and trading markets. As the Trump administration launches a tariff ‘trade war’ on foreign goods entering the USA, markets retaliate and look for product from elsewhere.
California produces almost all the US’ almonds, with America producing around 80 per cent of the world’s almonds. Australian steel and aluminium were highly vulnerable 25 per cent tariff targets from the President’s executive order on Tuesday, but one beneficiary might be our horticultural sector.
Almond prices have improved of late and the low Aussie dollar is helping our trade prospects. I hope our wine grape export prospects also improve given the huge oversupply and miserable prices for our wine grape growers. For almond growers who planted seven years ago, the timing could be perfect.
Australia’s position under the Coalition has for free trade without tariffs, which now enviably positions use with free trade agreements with the growing markets of China and India, the two biggest markets that import almonds. Tariffs deteriorate trade relationships so the Trump Administration’s ‘trade war’ could deal Australia into the game.
On his recent form, I doubt the PM will secure a good deal with the US – like the Coalition did with Mr Trump during his first trade war in 2018. Thankfully, an opportunity to install new, strong leadership is due by May at the election.
