“These tariffs are an act of economic self-harm,” said Treasurer Jim Chalmers in a television interview, responding to Donald Trump’s renewed push to impose baseline tariffs on US trade partners, including Australia. The Albanese Government is working on the assumption that the current 10 per cent tariff remains in place, although Chalmers confirmed there has been no formal confirmation from Trump’s team.
“As far as I’m aware,” he told Channel 9, when asked whether any direct clarification had been received. “We don’t pretend that anything in this environment is necessarily set in stone.”
Chalmers said the tariff measures were bad for the US, bad for global trade, and not good for Australia either. He pointed out that while the US has kept interest rates on hold for over a year, Australia is starting to see relief. “Inflation is coming down, that’s a good thing,” he said. “But we know the job is not finished.” Food inflation in Australia has slowed, though he acknowledged that grocery bills remain high, especially for eggs, lamb and coffee.
When pressed further on global trade uncertainty, Chalmers pointed to a more dramatic example. “There was another one about India overnight,” he said, referencing Trump’s decision to impose a 25 per cent tariff on Indian imports, with an added penalty. The measure, announced on Trump’s Truth Social account, cited India’s high tariffs, its non-monetary trade barriers, and its continued defence and energy ties with Russia.
Trump wrote, “Remember, while India is our friend, we have, over the years, done relatively little business with them because their tariffs are far too high, among the highest in the world.” He added that India had always sourced most of its military equipment from Russia and is now one of Moscow’s biggest energy buyers. “ALL THINGS NOT GOOD,” Trump declared, before confirming that new tariffs would take effect from August 1st.
India is the United States’ ninth-largest trading partner, with goods trade between the two countries exceeding US$118 billion last year. The new tariff, if fully implemented, is expected to affect exports ranging from pharmaceuticals and machinery to textiles and steel. India’s foreign ministry has not issued a formal response, but officials are believed to be assessing options quietly behind the scenes.
The move comes at a delicate time. Australia, India, the US and Japan have deepened ties through the Quad, positioning themselves as a regional counterbalance to China. India’s inclusion is seen as essential, and any disruption to US–India ties could complicate broader Indo-Pacific cooperation. Australia has its own reasons to watch closely. As Chalmers noted, the US runs a trade surplus with Australia, and Canberra has worked hard to maintain constructive engagement on both economic and defence fronts.
“We’ve got the lowest tariff rate of any of the countries. We’ve got the baseline,” he said, referring to the current 10 per cent level applied to Australia. Still, he admitted the absence of a US ambassador in Canberra and the ongoing uncertainty around AUKUS timelines haven’t gone unnoticed.
“It hasn’t prevented us from working closely with the Americans on issues of mutual interest,” he said. But the pressure is mounting. With no direct meeting between Trump and Prime Minister Albanese, a tariff policy in constant flux, and questions around submarine delivery timelines, Australia is walking a cautious line.
For India, the stakes are equally high. With its economy expanding and its exports becoming more competitive, being caught in a trade penalty could undermine key sectors. While Trump framed the tariffs as a reaction to India’s protectionism and Russian alignment, critics say the move may play better in US domestic politics than it does in international diplomacy.
For now, both Australia and India are left navigating a trading partner who signals loudly but rarely confirms. The tariffs are real, the consequences are pending, and the diplomacy continues in the background.
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