First installment of the dossier Madness and Civilization: International Perspectives on the MAGA 2.0 Tariffs, edited by the Heatwave media collective

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By Clearinghouse¹

"You can't believe how much fun we're having."

— a Trump aide

The Australian state is currently caught in a cleft stick, like so many of its Asian neighbours.² Long a junior partner to the United States within the Asia-Pacific, it has provided a broad suite of military and intelligence support since the Second World War: from troops for US-led military conflicts (Korea, Vietnam, Iraq, Afghanistan) through to bases for US military and regional surveillance. Most recently, there has been the AUKUS agreement which — supported by all the major political parties — was sealed with an agreement to buy US-made nuclear submarines (that some commentators now fear may never arrive). Meanwhile, over the last fifteen years or so, China has overtaken Japan as Australia's major trading partner,³ a situation common to economies across the region. Along with raw materials such as iron ore, gold and petroleum gas, a range of services are sold to China, including tourism and post-secondary education.⁴ Overall, however, the economy in Australia is notably "less complex than expected for its income level".⁵ Despite some setbacks under the previous federal government, which led to a temporary exclusion of certain local industries from the Chinese market, this connection with the PRC is celebrated in Australian business and political circles alike as proof of a natural "fit" that epitomises the concept of comparative advantage. Thus it is no surprise to hear the head of the Australian Chamber of Commerce and Industry stating recently that "It would certainly not be in Australia's interest to be ... contemplating that we would impose trade measures in alignment with the United States".⁶ How best to maintain this ménage à trois, given the apparent rising tensions between China and the US, is a puzzle whose solution has so far eluded the Australian political class. Whether there is movement on this front, now that the recent federal election has seen the Labor Party government returned, remains to be seen.

For us, the intertwined, yet conflicting, economic and political alliances with the US and China comprise the uneasy terrain within which Australia has responded to Trump's recent tariff announcements. On April 3rd, Prime Minister Albanese developed an initial 5-point plan:

1. Provide A$50 million to peak bodies within sectors hit by tariffs, to aid in finding new markets

2. Establish an AUD$1 billion economic resilience program to provide interest-free loans to enterprises wishing to take advantage of new markets and export opportunities.

3. Establish a critical minerals reserve - a stockpile of key minerals held back from export.

4. Prioritise Australian businesses in government procurement contracts.

5. Strengthen laws against commodity dumping.⁷

Albanese commented that "all these countries (United States, European Union, Canada, Japan, South Korea etc) are investing in their industrial base, their manufacturing capability and their economic sovereignty. This is not old fashioned protectionism or isolationism. It is the new competition."⁸

The Australian Manufacturing Workers Union (AMWU) has likewise responded to the tariffs, calling on the government to mandate the use of Australian metals in all domestic infrastructure and energy projects.⁹ The Australian Workers' Union made a similar call.¹⁰ The AMWU has a particular focus on aluminium and steel industries, as well as advanced manufacturing and component production through small and medium enterprises. The AMWU's response also included reference to the idea of "green metals," a discourse that is becoming more common in the global context of renewable energy transitions. The national peak union body, the Australian Council of Trade Unions (ACTU) has welcomed the government's plans.¹¹ This is unsurprising given the deep ties between the union bureaucracy and the Labor Party. Unions once again wish to guide the government's response, in the same way that the AMWU and other unions responded to the Senate inquiry into the "Future Made In Australia" bill.¹²

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Direct impacts to Australia's trade with the US have been limited so far, with the US accounting for only 6% of Australia's goods exports in 2023-24.¹³ Services, which can't be tariffed as easily as goods arriving in a port, have been an increasingly important component of Australian exports to the US, although not yet on the scale of goods. However, 26% of Australia's two-way trade is with China,¹⁴ and while decreased exports to the US may not deeply affect primary producers in Australia, greater impacts may be felt if the Chinese and Southeast Asian markets contract and demand for Australian goods and services declines.¹⁵ In the meantime, some Australian industries may benefit from the reconfiguring of global trade.

Currently Australia's most valuable goods export to the US is beef. Since the tariffs were announced, Australian beef exports to China have increased dramatically, filling the void left by the complete halting of US beef sales to China. Australian beef exports to China increased in February-March 2025, up 40% compared to the same period last year.¹⁶

Australia's second largest goods export to the US is gold. While not directly related to the tariffs, gold prices have drastically increased over the last year as the gold fetishists in the world's Central Banks rush to buy up gold bullion. So far, this has not led to increased investment in gold exploration in Australia. Instead, capital is flowing more rapidly into existing ventures, allowing mining enterprises to exploit known, lower-yield deposits that were previously too labour-intensive to mine profitably.¹⁷

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Viewed from the perspective of the local dominant class here, the tariff regime may be less the central issue — especially as it remains unclear what commodities will still be subject to customs duties in three months' time, and at what rate — than what (if at any) broader plans exist on the part of the US state for rejigging its complex relationship with China. If this is indeed the former's long-anticipated move to finally and decisively decouple the PRC's economy "from the upper segments of the world market to which Beijing continues to strive to secure access,"¹⁸ it seems to have been very poorly executed, to say the least. Not only is the whole thing chaotic and capricious, but Trump's penchant for talking big with threats, only to back down, has not been lost on the CCP (or US Treasury bond markets, for that matter). Much will depend on whether the newly-imposed 10% tariff on Australian goods stays in place — if so, little may change for the local state's economic and strategic policies in the region. As for the choices made by other Asia-Pacific social formations, many of which face similar dilemmas, we will have to wait and see, although increased commerce within the region itself seems probable. Finally, those fractions of local capital which have invested heavily in the US, such as the powerful superannuation industry managing almost $US2.6 trillion in pension funds, must be reassessing their offshore exposure policies after disastrous losses on Wall Street following "Liberation Day".¹⁹

As elsewhere, the Chinese government has made overtures to Australia, inviting Australia to "join hands" in solidarity with China in the face of the tariffs. During the recent election campaign, Defence Minister Richard Marles refused Ambassador Xiao Qian's offer point blank, arguing that Australia should instead pursue deeper ties with Indonesia, India, the UK and the UAE. However, other sources within the Federal government have hinted that trade with China could deepen, provided it happens on Australia's terms.²⁰

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Australia has unique protections in industries such as pharmaceuticals, medical devices, agriculture (particularly beef), and the much smaller steel and aluminium industries.²¹ Also under threat is the media bargaining code which forces large companies to pay for hosting news in Australia, as well as the recent social media ban for children under 16. Silicon Valley technocrats despise these practices, and despite their occasional opposition to Trump, are fairly happy to see him on the attack. Critical minerals, especially in the context of Ukraine, are becoming more and more important in the looming tech/arms race. According to one site, "recently Japan, Korea and some European nations have either signed agreements or started talks with the Albanese Government to secure access to Australian minerals."²²

With the current absence of any collective subject within the region to serve as a reference point, talk of identifying "openings" strikes us as premature. As for identifying local and regional factors, this presumes a) a detailed mapping of the hierarchies of labour-power across the Asia-Pacific b) an understanding of the various regimes of accumulation and value chains operating there, and how these articulate with both the US and Chinese economies c) a materialist analysis of regional geopolitics informed by a) and b). To date we have yet to encounter even the beginnings of any such analysis in or about our wider region, which is both why we have started our own modest project, and are keen to engage with others pondering these same problems. It is also why, however inadequate our own provisional responses to Heatwave's questions might be, we have thought it worthwhile to make some sort of initial contribution to what can only be a much broader collective process.

With that said, discontent around the cost of living (particularly housing, but also utilities) has been simmering within Australia since at least the outbreak of COVID in the ashes of the summer bushfires of 2019-2020. The extensive and intensive lockdowns in key parts of the country revealed for a brief moment the population's dependence on so-called "essential service" workers, while exacerbating divisions between those who were able to receive a regular income while working from home, and everybody else. Many contradictions surrounding "the Australian way of life" were already in plain sight by this point of time, and have only continued to feed this growing unease: the place of First Nations people within the polity; the sharp uptick in reportings of domestic violence; the meaning of "Australia the multicultural society"; growing portents of climate catastrophe (from floods to bushfires); debates around "appropriate" levels of migration; the degree of unpaid overtime for those in paid work; the difficulties facing the unwaged; increases in international tensions, from the genocide in Gaza to the war in Ukraine. Back in late 2020, one Italian friend flagged the challenges at that point facing efforts at "creating a general movement that, in starting from a particular terrain, is able to make one specific problem vital for the broad spectrum of the exploited."²³ Leaving aside for the moment the question of how future processes of class recomposition might actually be enacted, their ongoing absence has meant that discontent here has instead expressed itself in a number of (refracted? deflected?) forms, from a drop in support for both major parties, to a minor rise in trade union membership. Despite these simmering discontents, Australia has been notable for the absence of generalised struggles (organised or otherwise).

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Like other social formations in the region, Australia is largely subject to the fallout arising from the actions that bigger players enact as they jostle within the world market. While economic nationalism continues to be the dominant ideology of the local trade union movement, the liberalisation of trade and subsequent downscaling of manufacturing since the 1980s has turned this strategy into an uphill battle, beginning with the abolition of tariffs in the domestic textiles, clothing and footwear sectors in the 1980s, and culminating in the destruction of local auto production in the late 2010s. However, even before Trump's re-election, the federal government has lately begun talking of reviving certain local manufacturing sectors under the slogan "Building a Future Made in Australia," in an effort to reverse decades of deindustrialisation following similar moves from Japan, South Korea, Canada and the US. Geopolitically, this is conceived in terms of leveraging Australia's role as a longstanding "middle" power within the US global security system. In the last few weeks, there has been talk of using the country's considerable rare earths deposits as a bargaining chip — in the first instance, as a means to reduce "reciprocal" tariffs. For now, at least, the security alliance with the US remains part of mainstream political "common sense", although opinion polls suggest a marked "public" shift against it.²⁴ That said, even the opposition conservatives concede that "President Trump is somebody who is hard to predict, and we need to be able to defend ourselves."²⁵

As the dust settles following the Federal election on May 3rd that saw the Labor Party clench a second term, Australia appears to be in a holding pattern, albeit an uneasy one. Rather than a slide rightward, the centre seems to be holding for now. In the terrain of economy alone, Australia's position within global supply chains as an exporter of raw materials (most significantly of iron ore, coal and gas) has thus far provided a strong buffer against the economic turbulence of the 1990s and 2000s, with the national economy recording its first recession since 1991 in 2020, before restoring growth in the years since. Nevertheless, given that foreign direct investment into Australia was $4.7 trillion in 2023, some 181% of the year's GDP,²⁶ it seems fairly reasonable that Australian growth may suffer with the retraction of global investment spurred on by the tariffs. More work needs to be done on the nature of investment here, and the relative importance of value-productive industry versus large private equity firms and financial instruments/services. The tariffs remind us that, while at once a major source of its wealth, Australia's dependence on exports casts the fate of the national economy on the shifting sands of the world market, a totality which increasingly appears "to lurch from crisis to war."²⁷

Correspondence is welcomed at clearinghouse@proton.me

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