S1: From the newsrooms of the Sydney Morning Herald and The Age.
S1: This is inside politics. I'm Jacqueline Maley, it's Friday, March 14th.
S1: The verdict is in. Australia will not be granted an
S1: exemption from US tariffs on steel and aluminium, despite hopes
S1: that President Trump would look favourably on one of its
S1: most loyal allies and grant us one.
S2: The white House, in just the last hour, ruling out
S2: Australia's bid to be excluded from the 25% tax tariffs
S2: come into effect today.
S1: But the news was greeted with dismay, with the Prime
S1: Minister saying the decision was not a friendly act and
S1: the opposition blaming it on the government, with Peter Dutton
S1: saying Anthony Albanese had been weak and incompetent. They say
S1: Albanese should have travelled to Washington to lobby Donald Trump
S1: in person. So what does this mean for our relationship
S1: with our closest ally? Will the US impose more tariffs
S1: on us in the future? Did the government cock up
S1: the handling of this delicate diplomatic issue? Plus, we will
S1: delve into the strange case of the caravan full of
S1: explosives and the fake terror plot with both sides of
S1: politics accusing the other of weaponizing this incident. Who is
S1: in the right? Joining me this week, we have chief
S1: political correspondent David Crowe, as usual, and a very special
S1: guest online from Washington. We have our US correspondent Michael Koziol.
S1: Welcome to the pod, gentlemen.
S3: Hello, Jackie.
S4: Well, hello, Jackie. And hello, Michael.
S1: So thank you for making time for us. I just
S1: want to get a sense of what it's like there
S1: on the ground for you. When did you find out
S1: about the tariff decision? How did you find out? Are
S1: you talking to people in the administration, or is there
S1: some sort of edict that is emailed? How does this
S1: news get communicated?
S3: Look, it's a bit of a chaotic white House. There's
S3: a lot of things happening very fast. So I wish
S3: that I could say there was some smooth process for
S3: engaging with it, but there really isn't. And I'm quite
S3: new here. So, uh, whatever kind of back door tricks
S3: there are, um, I wouldn't really know them yet, but
S3: in this case, it just so happened that on that
S3: Tuesday at 1:00, the white House press secretary, Caroline Leavitt,
S3: was doing a press briefing. I went along to that.
S3: There was another Australian reporter there, Carrington Clark from the ABC.
S5: Good afternoon everybody. Good afternoon. How are you? Good. I
S5: let my staff get settled. There's a lot of news today,
S5: so I look forward to taking your questions.
S3: It's a very packed briefing. I'm told that this is
S3: a bit different to how things were under Joe Biden,
S3: when perhaps media interest had waned a little bit by
S3: the end. So the room is packed. It's standing room only.
S3: You're very unlikely to get your question in the 30
S3: or 40 minutes of the briefing, which was the case.
S5: And I'll see you guys later. Perhaps you'll see the
S5: president in a Tesla later this afternoon. Have a good one. Thanks.
S3: So we decided to just go around the back and
S3: poke our heads in to the press office. Uh, the
S3: white House is very small, but it's quite accessible. So
S3: you can just walk into the press secretary's office and
S3: we said hello. And you know, what's the deal with
S3: these tariffs, you know. Donald Trump said that he was
S3: going to give great consideration to exempting Australia from the tariffs. Um,
S3: what's his decision. And she was very clear and emphatic.
S3: She said he's considered it and he's considered against it. Um,
S3: there won't be any exemptions. Uh, you know, if you're
S3: steelmakers want to move their operations to the US, then
S3: they're welcome to do that. So that was how the
S3: news broke.
S1: I mean, that's fascinating. I love that you just had
S1: to kind of buttonhole the the white House press secretary
S1: after her briefing. Um. Well done. What was the reaction
S1: of the Australian diplomatic community in Washington? It wasn't unexpected,
S1: but was it still a shock?
S3: Yeah. You're right. I mean, I think they were. And
S3: we're just still, at the time of this recording, um,
S3: we're trying to kind of glean a little bit more
S3: information as to the exact sequencing of how this all
S3: worked out, but I've seen a reporter that Kevin Rudd
S3: was meeting with Howard Lutnick, the commerce secretary, uh, probably
S3: earlier in the day on Tuesday. So that would have
S3: been Tuesday morning, US time. Um, and, and, uh, left
S3: that meeting, I think, with, with an understanding that we
S3: almost certainly weren't going to be exempted. But perhaps, you know,
S3: given that midnight hadn't come around yet, there was still,
S3: you know, half a day left to, to, uh, give
S3: it a go. And that was certainly what, you know,
S3: the Australians were saying once we broke the story that,
S3: you know, the Australian government was saying, hey, you know,
S3: there's there's this is bad, but there's still time. Uh,
S3: whereas the impression that we got from Carolyn Levitt, which,
S3: you know, again, was quite clear, was that this decision
S3: had already been made, there would be no exemptions. That
S3: and let's remember here, these tariffs have already been essentially
S3: written down in an executive order that is due to
S3: that was due to start on this date. So in
S3: fact there would have to be a new executive order
S3: introducing these exemptions in order for that to be given.
S3: So from the White House's point of view, it was
S3: sort of like, hey, there's nothing to see here. We've
S3: already said what we're going to do. Um, and we're
S3: not changing it. So, you know, they were fairly, um,
S3: you might say, blasé about it, even though it was
S3: obviously a very big deal for the Australians.
S6: Tariffs and escalating trade tensions are a form of economic
S6: self-harm and a recipe for slower growth and higher inflation.
S6: They are paid by the consumers. This is why.
S1: And is there any chance the decision might be reversed?
S3: Well, I would say yes, because you never know what's
S3: going to happen in this white House. I mean, look,
S3: they've given no indication that that's going to happen, but
S3: we've seen in the relationship with Canada that, you know,
S3: things can change very quickly. I mean, on the same
S3: day that this was all happening, Donald Trump was going
S3: to double the tariffs on Canadian steel and aluminium to 50%,
S3: and that lasted about three hours before, you know. The
S3: Canadians reacted and then it was all off. So, you know, look, Donald.
S3: Trump can always decide, um, based on a deal that
S3: he makes that this is. An exemption is going to
S3: be introduced or something's going to be reversed. At the moment,
S3: there's no indication of that. But, you know, given the way.
S3: That decisions are made in this white House, you would
S3: just you would never rule it out.
S1: Mhm. Mhm. It's fascinating. I mean it is really actually
S1: quite hard to keep track of this news now David,
S1: what was the reaction from Canberra just briefly from the PM,
S1: the foreign minister, the deputy Prime minister. I mean it
S1: was it was pretty strong wasn't it.
S4: Actually I think it was you know cautious. They're not
S4: happy with it. But I thought it was interesting that
S4: Ed Husic, the industry minister, called it a dog act
S4: by America. But Anthony Albanese didn't back in that comment
S4: in quite as forceful a way he says it's disappointing.
S4: I think what's been happening here is that behind the scenes,
S4: whenever I've talked to people in the government, there's been
S4: an expectation that there would be no exemption. As the
S4: time went on, they were gloomier about getting an exemption
S4: just because of the unpredictability of the white House and
S4: the fact that there were no signals from any of
S4: the people around Donald Trump, that they were going to
S4: make the argument for Australia. Howard Lutnick being one of
S4: the examples, you know, really singling Australia out as a
S4: source of dumping in the American market so strongly against
S4: Australia that's made it challenging for Anthony Albanese and for
S4: Jim Chalmers as treasurer. But they didn't want to say publicly, look,
S4: we're going to cop it here and there's not much
S4: we can do about it because that looked defeatist. And
S4: the public remarks are still words like, oh, we're going
S4: to keep fighting. We're going to keep arguing, keep making
S4: the case in the hope that we can get a
S4: good outcome. So that's the public line for obvious reasons.
S4: But behind the scenes look, they can see the way
S4: Donald Trump works just like everybody can. And they didn't
S4: have much hope of an exemption.
S1: Mhm. So what about the opposition. Because they've been much
S1: stronger and they've basically blamed the government for this haven't they.
S4: Yeah. And the line from Peter Dutton is that he
S4: could get a better deal.
S7: It's not just Australians who see the Prime Minister as
S7: weak and incompetent. It's our trading partners as well. And
S7: the sad reality is because of the Prime Minister's inability
S7: to deal with this issue, Australian jobs are at risk
S7: and Australian industry is at risk.
S4: And I think that's a very interesting line. When you
S4: think that, is he really going to go to the
S4: election saying I can get a better deal on tariffs
S4: if you elect me prime minister? That's a very big call.
S4: It's a very big promise to make and I think
S4: it's an unlikely scenario.
S8: Have you called Donald Trump?
S7: I haven't I haven't as opposition leader, but I will
S7: as prime minister and we'll get a deal done and
S7: we'll make sure that we can protect jobs and protect industry,
S7: because otherwise Australians are the ones who are going to
S7: lose out under Mr. Albanese's inability to.
S4: That doesn't seem to be the way Donald Trump works here.
S4: Donald Trump loves tariffs. The people around Donald Trump love tariffs.
S4: The thing that's going to make a difference here is
S4: the impact in America. When people see higher prices, that's
S4: actually going to be the impact. The other impact, of course,
S4: is what's happening on the share market with prices falling.
S4: Donald Trump doesn't like that. I'm thinking about this for
S4: my Friday column. Is there anybody in the world who
S4: is as driven by money as Donald Trump? Like he
S4: measures a lot of things by money.
S1: I think it's his only metric.
S4: And when the market is tanking, that sends him a message.
S4: And I do wonder whether that would have an impact,
S4: far more an impact on Trump than any lobbying from Australia.
S1: Michael. Is Australia potentially in line for further US tariffs
S1: on other goods? Beef exports have been mentioned. I notice
S1: in dispatches.
S3: Yes. Look I think that's certainly possible. So there's another
S3: round of tariffs that are due to come in in
S3: less than a month. What Donald Trump calls the reciprocal tariffs,
S3: which is basically, in his parlance, you know what what
S3: other countries charge us. We're now going to charge on
S3: on them and rolled up in all of that is
S3: the sort of, you know, bunch of other grievances that
S3: the US may have with various countries, uh, you know,
S3: non-tariff measures that a lot of countries have around protecting products,
S3: particularly agriculture. And I must say, I'm not au fait
S3: with what the rules around, um, Australian agriculture might be
S3: and not, for example, letting you know US agricultural products
S3: into the country. Um, David might have more detail about
S3: some of that, but I mean, I do know, as
S3: everyone who flies into the country knows, we're very, very
S3: protective of our agriculture. Um, not only from a safety
S3: point of view, but trying to protect the livelihoods of
S3: our farmers, as is the US. And we don't really
S3: know where that's going to land yet, and that's certainly
S3: something that we need to try and find out over
S3: the coming weeks. But there seem to be all sorts
S3: of grievances. I've seen the Pharmaceutical Benefits Scheme mentioned as
S3: one grievance that the US had when they were negotiating
S3: the free trade agreement with Australia 20 years ago.
S1: Why is that? Whatever pharmaceuticals, the US exports to Australia
S1: are subsidised and too cheap. I've never understood that.
S4: There's a government decision basically on subsidies for some pharmaceuticals
S4: and not for others. And so I guess in that sense,
S4: it's not completely open slather because a government advisory committee says, look, this,
S4: this pharmaceutical is worth supporting and will subsidize it under
S4: the PBS. And the Americans have got concerns with that.
S4: But I think that that's a risky fight to pick,
S4: because some of the subsidies are going to drugs sold
S4: by American suppliers that helps them sell in Australia. So
S4: if they want to pick a fight over that, maybe
S4: they'll lose.
S1: But so the argument is that pharmaceuticals from other countries
S1: are being subsidized, and that would prejudice US companies who've
S1: got similar products on the market.
S4: Well, I think the subsidy from the Pharmaceutical Benefits Scheme
S4: isn't country by country, it's product by product.
S1: Yeah.
S4: So I don't actually see the logic for the Americans
S4: in picking a fight over it. But, you know.
S1: Yeah. Because us pharmaceutical companies would presumably take advantage of
S1: it as well. I guess that's another fight that we're
S1: going to see play out. I just I just want
S1: to talk more broadly now. And I want to ask
S1: you both, both vocally about this. What does this tell
S1: us more broadly about the reliability of the US as
S1: an ally? There's been a lot of talk about Aukus
S1: and how much we're going to be able to count
S1: on the Americans now to deliver those submarines that we're
S1: paying so very much money for and that we've already
S1: put down. I think it's an $800 million down payment recently. Michael,
S1: what are the implications more broadly?
S3: Well, we've paid $800 million just to help boost American
S3: submarine building industry. That's before you know that that doesn't
S3: bias any of the actual boats. We have to pay
S3: for those separately. And we'll be paying another, uh, form.
S3: I'll do the math for 100.
S1: We're journalists. We're not supposed to be good at maths.
S3: Well, we're paying another 4.2 billion towards that industry capacity
S3: building before any boats even are put up for sale. Now, look,
S3: I mean, Donald Trump won't be the one who makes
S3: the decision on whether we ultimately get those boats. It
S3: will be the president of the day in, you know,
S3: the 2030s. But they will have the capacity to say, actually, no,
S3: the US needs this boat and we're going to hold
S3: on to it. So there's no guarantee in there that
S3: we will get anything. And, uh, you know, look, in
S3: terms of the broader question of the alliance, I think, uh,
S3: you know, well, we've been shown where we stand, but
S3: we're not alone there. Um, that, uh, that this administration
S3: basically thinks everyone around the world, including our friends, has
S3: been ripping us off for a long time. Um, and
S3: we're now going to get our own back. That's that's
S3: the basic view of the Trump White House. So they
S3: will gladly say, you know, we'll take that 800 million.
S3: We'll take the next 4.2 billion. And by the way,
S3: you know, you need to up your defense spending to 3%
S3: of GDP while you're at it. So, you know, they
S3: don't even think that the 800 million we've given them
S3: is enough, essentially. Um, they want us to be upping
S3: our own, uh, defense spending to 3% of GDP, which
S3: is a story that, um, our colleague, um, Matthew, not, uh,
S3: broke last week. That's their view. And they basically think that, uh,
S3: we and many other friends and allies of the US
S3: haven't been paying our way and need to do so.
S1: Mhm. So what's your sense, particularly in Canberra, of how
S1: much we can now rely on the United States as
S1: an ally generally.
S4: Why would you listen to the United States telling us
S4: to lift defense spending to 3% if they are an
S4: unreliable ally? It doesn't make sense, does it? The whole
S4: situation is forcing a rethink about the alliance. And I
S4: think there is a, you know, an undeniable fact that
S4: Aukus has made us more dependent on the United States
S4: at the very time when the United States is less dependable.
S4: And this is a really huge problem. But I think
S4: it's quite separate from tariffs and the tariff. Economic impact
S4: in steel and aluminium is minimal. If there is a
S4: China shock because of tariffs, that will hurt the Australian
S4: economy big time. But at the moment we can actually
S4: navigate this tariff dispute because it's focused on those industries. Look,
S4: if it broadens to beef that's a problem. But aukus
S4: is a is a huge question that's entirely separate. And
S4: I know there are even ideas about going back to
S4: the French and saying, look, remember that contract we tore up?
S4: Is there another way to do it? I mean, that's
S4: a pretty out there concept.
S1: Just go crawling back to Emmanuel Macron.
S4: But now people are canvassing these ideas because of what
S4: Michael's pointed out with the Virginia class submarines. The Americans
S4: may not want to sell them to us in the 2030s.
S1: Mhm. I want to just ask quickly, what's your sense
S1: of the domestic political fallout, whether or not voters will
S1: blame Albanese for the tariff decision as the coalition is,
S1: you know, really trying to do, or will they just
S1: sort of figure that's all part of the madness of
S1: Trump 2.0 in the white House and give the government
S1: a bit of a pass on it?
S4: It's really a gut, gut call at this point, but
S4: everybody can see the unpredictability of Donald Trump, and Australians
S4: generally don't like him. They would have preferred Kamala Harris
S4: to be president. Clearly we polled that and we saw that.
S4: At the same time, a lot of people think that
S4: Peter Dutton is better able to handle Donald Trump. But
S4: at the moment we've got Anthony Albanese saying that Peter
S4: Dutton is being, in a sense, not on Team Australia.
S4: By picking this domestic fight over the impact of the
S4: Trump tariffs, will that play out in a way that
S4: helps Anthony Albanese convince Australians that they need to back him,
S4: rather than Peter Dutton, who labor is trying to pin
S4: as a more Trump like candidate? I don't know whether
S4: that will succeed, but that is the dynamic we're in
S4: for in the election campaign.
S1: It's fascinating. Michael Koziol, you have a dinner to attend.
S1: I hope you are going somewhere very glamorous. Have a
S1: martini on us. Thank you for being such a champ.
S3: Thanks. See you buddy.
S1: See you soon. So, David, I want to talk about
S1: a more domestic political conflict now, which is this fight
S1: over the caravan full of explosives that was discovered in
S1: Sydney in January, and the caravan also had a list
S1: of synagogues and a note displaying anti-Semitic messages. And it
S1: obviously put a lot of fear into the Jewish community.
S1: But it was revealed this week that it was actually
S1: a fake terror plot, designed not for sort of truly
S1: antisemitic purposes, but to distract police resources away from organised
S1: crime figures. How did this issue become politicised?
S4: There are a sequence of events, really, beginning with the
S4: fact that it was leaked to the Daily Telegraph in Sydney.
S4: They got a good story and good luck to them.
S4: They reported the fact of the discovery of the caravan,
S4: which hadn't been known until that point. And I'm not
S4: going to get into the guessing game about their sources. Right.
S4: They they reported a story that was newsworthy and they
S4: got stuck into it. That then triggered a press conference
S4: by New South Wales Premier Chris Minns and police officers
S4: in Sydney, where they talked about this, and that's where
S4: Chris Minns made that fateful remark about how this was terrorism,
S4: and it was potentially a mass casualty event.
S9: That anyone attempting terrorism, violence, hatred in our community will
S9: be met with the full force of the law that
S9: there are massive.
S4: And things got very high alert from there. From then on.
S4: Anthony Albanese backed in the terrorism word the next morning.
S4: And then we saw Peter Dutton go very hard on
S4: who knew what when.
S1: Yeah.
S7: The prime minister of our country wasn't notified for nine days,
S7: ten days of what was believed to be the biggest
S7: planned terrorist attack in our country, in our country's history.
S4: And it was apparent that Chris Minns had been told
S4: about this caravan. But reading between the lines, it seems
S4: that Anthony Albanese had not been told in the same
S4: time frame at least.
S1: But now we know that the police actually knew very
S1: early on. They say that this was not a genuine
S1: anti-Semitic plot. That it was actually this sort of fake
S1: terror plot by organized crime figures. So Tony Burke is
S1: saying that Dutton basically refused to have briefings along those
S1: lines and went around town talking about a terror plot,
S1: even though he knew that it might very well not
S1: be a genuine terror plot. Is that right?
S4: Peter Dutton never had the personal briefings that he could
S4: have had from the AFP to establish what they knew,
S4: where they could have told him in private what their
S4: various lines of inquiry were. Now, they never ruled out
S4: from the start terrorism. You know, it was a line
S4: of inquiry, but this other option was also a line
S4: of inquiry. And that was clear to us when we
S4: spoke to officials. And it became even clearer when we
S4: reported that the explosives were 40 years old and that
S4: there was this theory about organized crime.
S1: Yeah. So there was a there was a seed of doubt,
S1: a pretty strong seed of doubt there from the very beginning.
S1: And although Dutton himself didn't attend the briefing. Members of
S1: his staff did and senior ministers did. So I think
S1: James Paterson, for example, who's the shadow home affairs, never modified.
S4: They never modified their line of attack. So we don't
S4: know what they were told during those briefings. But even
S4: now they're going hard saying that Anthony Albanese should have
S4: been briefed immediately on this. But I have a real
S4: problem with that because I don't think, given what we
S4: know now, it actually reached a threshold that demanded instant
S4: attention from the Prime minister. It was an organised crime plot.
S1: Yeah. Okay. So Tony Burke, Home Affairs Minister, has said
S1: that Dutton leveraged the whole thing for political gain. Dutton
S1: has hit back and said that actually, it's the government
S1: who has politicised this. I just want to ask you
S1: one thing in sort of wrapping this up, we know
S1: that Dutton has been seen as not a particularly likeable leader,
S1: at least in the past. And his reputation, reputation, whether
S1: or not it's true, is someone who's very black and
S1: white about the issues of immigration and sort of law
S1: and order, you might say Some voters even think that
S1: he might be cold or hard hearted. I'm interested in
S1: your opinion whether or not you think this is going
S1: to sort of cement that view for voters or for
S1: some voters of Peter Dutton, or whether or not it's
S1: just going to look like a shemozzle. And actually, the
S1: Prime Minister himself looks weak because he didn't know what
S1: was going on.
S4: Peter Dutton did go very hard for weeks on this,
S4: and so there would have been a lot of attention
S4: and a lot of publicity, and households would have seen
S4: him talking up the threat from the caravan. The caravan
S4: now turns out to be not an imminent threat to people.
S4: So I think that will cost him in New South
S4: Wales in particular. And New South Wales is a key
S4: state for the coalition. They really need to make some
S4: gains in New South Wales. They can't win that many
S4: more seats in Queensland because they're so strong in Queensland.
S4: It's Victoria and New South Wales that are going to
S4: decide this election for the coalition. So I think as
S4: a problem for Peter Dutton in New South Wales, it
S4: does have political significance.
S1: Mhm. Okay. We've got to wrap up there. But it's
S1: been a fascinating chat and we will see you again
S1: next week David. And who knows what the news will
S1: be next week particularly out of the white House.
S4: It's a wild ride.
S1: It is. Strap in. Thanks, David.
S4: See ya.
S1: Today's episode of Inside Politics was produced by Julia Carr Katzel,
S1: with technical assistance from Debby Harrington and Josh towers. Our
S1: executive producer is Tami Mills. Inside politics is a production
S1: of The Age and The Sydney Morning Herald. To support
S1: our journalism, subscribe to us by visiting The Age or smh.com.au.
S1: Forward slash subscribe and sign up for our Inside Politics
S1: newsletter to receive a comprehensive summary of the week's most
S1: important news, analysis and insights into your inbox every week.
S1: Links are in the show. Notes. I'm Jacqueline Maley, this
S1: is Inside politics. Thank you for listening.