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Speaker 1: Bloomberg Audio Studios, podcasts, radio News.

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Speaker 2: We're just here outside of Durban for the G twenty

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Speaker 2: Finance Ministers in the Central Bank meeting that it's been

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Speaker 2: going on here for the last couple of days. Wrapping

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Speaker 2: up today, hopeful that there will be a bit of

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Speaker 2: solidarity and a communicate coming a little bit later. We're

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Speaker 2: very pleased to be joined by a guest that Jim Chalmers,

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Speaker 2: who is the Treasurer of Australia's come a long way

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Speaker 2: for this meeting, so thank you very much for taking

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Speaker 2: the time.

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Speaker 1: Thanks for the opportunity all of them.

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Speaker 2: Yeah, I think we have to stay with the elephant

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Speaker 2: in the room. Two weeks away from this Trump deadline.

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Speaker 2: What is the status of negotiations between Australia and the

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Speaker 2: United States right now?

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Speaker 3: Well, Australia has the baseline tariff of ten percent and

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Speaker 3: some additional areas like steel in aluminium, copper, pharmaceuticals, and

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Speaker 3: so we're engaging with our counterparts in the US like

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Speaker 3: almost every other country is in the world. We're pretty

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Speaker 3: well placed and we're well prepared to deal with these tariffs.

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Speaker 3: The direct impact is relatively manageable. Our bigger concern is

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Speaker 3: the impact on global man of all of this uncertainty

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Speaker 3: and volatility and unpredictability, which puts global growth and indeed

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Speaker 3: global inflation at risk. And so in our modeling, the

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Speaker 3: bigger risk comes from the impact on the global economy

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Speaker 3: rather than the direct impact.

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Speaker 2: OK, because ten percent is basically, as far as we

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Speaker 2: can tell, the lowest passible deal. It's effectively what you'll

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Speaker 2: have with the United Are you happy with that? And

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Speaker 2: does that warrant retaliation or no?

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Speaker 3: We've decided to go for resilience in our own economy

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Speaker 3: rather than retaliation. You know, the ten percent tariff is

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Speaker 3: the lowest of any countries, but we've made it really

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Speaker 3: clear that we think the appropriate tariff, consistent without trade

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Speaker 3: agreemen is zero. We see these tariffs as self defeating,

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Speaker 3: we see them as an act of economic self harm.

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Speaker 3: We've made that very clear. Bad for the US economy,

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Speaker 3: bad for the global economy, and therefore not good for Australia.

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Speaker 2: Do you see any progress passable on stealing aluminum?

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Speaker 1: It remains to be seen.

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Speaker 3: I mean we've been engaged more or less constantly for

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Speaker 3: some months now, whether it's still and aluminium or some

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Speaker 3: of the more recent announcements around.

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Speaker 1: Copper and pharmaceuticals.

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Speaker 3: Our approach to is to engage at every level as

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Speaker 3: much as we can to get a better deal for

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Speaker 3: our workers and our industries, our exporters, our industry and

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Speaker 3: our investors. And that approach will continue to guide us.

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Speaker 2: And in terms of the negotiations around pharma, we've for

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Speaker 2: two hundred percent as a possible figure from the United States.

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Speaker 2: Is the changes to Australia's pharmaceutical benefits scheme? Is that

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Speaker 2: something that's on the table because the Trump ad Mistress

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Speaker 2: have been very focused on non tariff barriers, that part

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Speaker 2: of the conversation.

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Speaker 1: Absolutely zero chance. You know, we couldn't be clear.

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Speaker 3: Our pharmaceutical benefit scheme is a crucial part of our architecture,

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Speaker 3: our policy architecture.

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Speaker 1: It's something we're very proud of.

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Speaker 3: We've made it really clear that we're not prepared to

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Speaker 3: negotiate or diminish or weaken the PBS in order to

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Speaker 3: get a deal.

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Speaker 1: We've been clear about that from the beginning.

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Speaker 3: We're working through the potential consequences of pharmaceuticals being caught

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Speaker 3: up in these escalating trade tensions. We do have quite

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Speaker 3: a substantial export offering into the US when it comes

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Speaker 3: to pharmaceuticals. But how this potential tariff might work. We're

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Speaker 3: working through with the industry and with the administration.

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Speaker 2: And I'd like to also get your appraisal of the

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Speaker 2: evolution of the multilateral kind of co op cooperative system,

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Speaker 2: because obviously it's been dealt quite a shark over the

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Speaker 2: last couple of months. You set sort of interestingly between

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Speaker 2: the nexus of a lot of different sort of spheres

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Speaker 2: of influence in terms of the conversations that are happening here,

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Speaker 2: how is the G twenty and the sort of larger

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Speaker 2: global framework of cooperation dealing with this US situation, and

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Speaker 2: what does the sort of potentially further cooperation look like.

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Speaker 3: Well, I've been involved in the G twenty in different

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Speaker 3: roles for a big chunk of the last two decades,

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Speaker 3: and we've been through four economic shocks in that period.

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Speaker 3: The one that's the reason this one, the fourth one,

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Speaker 3: is different to the first three is that it's primarily

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Speaker 3: induced by policy, by decisions.

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Speaker 1: Taken around tariffs.

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Speaker 3: And so I think what that means for this type

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Speaker 3: of multilateral engagement is that people recognize here that at

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Speaker 3: a time when there's lots of volatility.

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Speaker 1: Uncertainty and unpredictability.

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Speaker 3: The best defense against that, the best antidote to that,

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Speaker 3: is more engagement, more resilient economies, more robust supply chains,

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Speaker 3: more reliable markets for our exports. And so I think

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Speaker 3: that's really the color and the context for these discussions.

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Speaker 3: And from an Australian point of view, Australia is a

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Speaker 3: huge believer in multilateralism. We're a huge beneficiary of free

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Speaker 3: and open markets, and so we come to these discussions

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Speaker 3: in that light.

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Speaker 2: And so concretely, where do you see you kind of

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Speaker 2: the most motion sort of being affected that in terms

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Speaker 2: of different relationships with countries, ones that you maybe have

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Speaker 2: not talked to in the same way in the past, Well,

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Speaker 2: have you seen that sort of changing Concretely, I just.

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Speaker 3: Think there's a real recognition here that when these tariffs

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Speaker 3: and escalating trade tensions, the uncertainty that comes from that,

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Speaker 3: but also from conflict in the Middle East, conflict in

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Speaker 3: Eastern Europe, whole range of uncertainty.

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Speaker 1: I think heartening message from.

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Speaker 3: The colleagues here that we've been engaging with these people

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Speaker 3: are not retreating into their own corners. They're working out

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Speaker 3: how to make our own economies resilient. That's a big

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Speaker 3: part of the Australian agenda as well. But we're trying

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Speaker 3: to de risk these relationships without the coupling, and I

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Speaker 3: think that's a major theme.

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Speaker 1: It's a heartening.

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Speaker 3: Theme, because the alternative would be to pretend that at

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Speaker 3: a time when these trade tensions are escalating and these

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Speaker 3: conflicts and important parts of the world, to pretend that

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Speaker 3: we can just retreat into our own corners. That again,

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Speaker 3: I think would be self defeating. It's certainly not the

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Speaker 3: Australian strategy.

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Speaker 2: And you mentioned defense as one of these the sort

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Speaker 2: of issues has been a huge amount of pressure from

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Speaker 2: the United States for allies to spend more on defense.

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Speaker 2: You saw that most concretely a NIEDO a couple of

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Speaker 2: weeks ago, where you had that boost in pledges for

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Speaker 2: three and a half percent effectively of defense. Do you

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Speaker 2: think Australia could get to that figure at three and

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Speaker 2: a half percent? Do you think that would be appropriate

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Speaker 2: to join sort of allies at that level?

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Speaker 3: Well, first of all, I mean it is a big

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Speaker 3: part of the conversation here, particularly with European friends. You

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Speaker 3: know how they will find the three and a half

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Speaker 3: percent of GDP and how they'll account for the other

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Speaker 3: one and a half percent of GDP for national security

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Speaker 3: related spending. For Australia, we are already quite by our standards,

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Speaker 3: quite dramatically escalating our defense spending. You know, we're taking

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Speaker 3: it from two percent of GDP up to two point

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Speaker 3: three at the start of the next decade. That already

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Speaker 3: represents tens of billions of dollars in extra investment. It's

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Speaker 3: a much higher trajectory than when we came to office

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Speaker 3: three years ago. And so we are increasing our defense spending.

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Speaker 3: We make those decisions trading them off against all kinds.

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Speaker 1: Of other budget priorities.

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Speaker 3: But we say to American friends, and we say to

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Speaker 3: the world more broadly, we are already increasing our defense

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Speaker 3: spending because we think it's important at a time where

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Speaker 3: we are seeing this heightened uncertainty in the world.

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Speaker 2: And given just sort of the global volatility uncertainty and

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Speaker 2: the outlook, how continent about are you of your inflection

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Speaker 2: forecas and your growth forecast. How susceptible do you think

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Speaker 2: those are to downward revision book.

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Speaker 3: There's always an element of uncertainty when it comes to

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Speaker 3: forecasting economic outcomes, but especially when you know global markets

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Speaker 3: are extremely.

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Speaker 1: Volatile right now.

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Speaker 3: But one of the things we're very proud of as

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Speaker 3: Australians is there's only two countries here at the G

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Speaker 3: twenty that last year had continuous economic growth, inflation with

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Speaker 3: the two in front of it, and unemployment in the

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Speaker 3: low furs. No major advanced economy has been able to

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Speaker 3: over the last three years maintain that growth and have

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Speaker 3: those inflation and employment outcomes, and so why.

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Speaker 1: We're proud of that is we've made very.

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Speaker 3: Substantial progress on inflation now sustained progress on inflation. It's

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Speaker 3: given our central Bank the confidence to cut rates twice

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Speaker 3: already this year. But we've done that without paying for

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Speaker 3: it with much higher unemployment. Unemployment is now four point

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Speaker 3: three percent, historically low, the lowest average unemployment over the

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Speaker 3: last three years for any other government. In the last

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Speaker 3: fifty years, we've created one point one million jobs and

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Speaker 3: so our labor market's been a source of strength. We

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Speaker 3: had a little tick up yesterday in the unemployment data,

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Speaker 3: but we've got inflation down without paying for it with

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Speaker 3: a big spike in unemployment, and that's something we're.

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Speaker 1: Very proud of.

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Speaker 2: Well, Jim Cholemas, thank you so much for your time

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Speaker 2: here on the sidelines of the G twenty outside of

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Speaker 2: Durban and South Africa. Thank you very much so those

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Speaker 2: are the thoughts there from the Australian Treasurer. And sort

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Speaker 2: of multilateralism in the age of MAGA and the path

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Speaker 2: forward here at the G twenty