John Menadue asked me what I thought Trump 2.0 could mean for Australia, but there are two similar, easier questions: what should and what will Trump mean for Australia?

The last is the easiest to answer – nobody, including Donald J. Trump, knows. The fickle and feckless nature of the next US president, let alone that of the oddballs jockeying for cabinet positions, has removed any idea of certainty about US policy.

What is especially uncertain is how the next administration will react when events don’t magically go the way Trump wishes they would go. Throw a tantrum, toss the toys out of the cot with no regard to what they hit – or pretend that whatever does happen is what he actually wanted and promised all along? This is someone who seems to believe his own lies, whatever version of reality he prefers.

That is what makes Tony Abbott’s reaction to the election about his silliest effort short of eating an unpeeled raw onion.

Being US president does not come with guaranteed “leadership of the free world”, whatever that means these days. Trump wasn’t seen as foreman material the first time round and has deteriorated since then. Combining happy thoughts and faerie dust enabled Peter Pan to fly, but simply believing you can doesn’t work for actual humans. It’s a very thin line between Trump having self-belief “in spades” and being deluded.

As to what Trump 2.0 could mean for Australia, there’s the quick money market consensus of stickier inflation and weaker growth. That is built on the belief that Trump will carry through with his promise of greater protectionism, imposing higher tariffs on all imports (and therefore increased inflation in the US) and much higher tariffs on China, leading to bets on weaker Chinese economic growth which would have knock-on effects in Australia.

Well, maybe – but maybe not as much as currently being forecast and not for long.

Trump’s China policy only differs by degree from that of Biden. Broad Sinophobia and the desire to contain China both economically and militarily is a rare area of Democrat and Republican bipartisanship.
China has seen it coming – it would be impossible not to – and has proven agile in dealing with it and strategically looking ahead, increasingly investing in and trading with the global South, which is where the greater growth promises to be anyway.

Just as most of the Australian trade impacted by Chinese restrictions during the Morrison v Wolf Warriors chapter found other markets, China had little trouble selling stuff elsewhere when Trump 1.0 imposed restrictions.

The South now accounts for just over half of China’s trade, up from 42 per cent in 2017, and there is little appetite within the West for solidarity with the US in launching an all-out trade war. The European Union’s share of imports from China increased from 19 to 21 per cent in the same period.

It’s a common mistake to think of China’s trade as a monolithic state effort. Far from it. China’s trade success is based on myriad enterprising businesses and families seeking opportunities anywhere they can be found.

The initial hit from much higher American tariffs would be balanced by increasing China’s appeal as a trade partner in the rest of the world that also will be penalised by Trump’s protectionism.

The instability and loudly-proclaimed self-centredness of Trump 2.0 does not create friends, does not lead to a better version of the “free world”. To the extent that Trump threatens to unleash an American bubble with higher inflation, reduced taxes, an even more inflated deficit and a stacked Federal Reserve Board – such bubbles are followed by busts.

This 2020 paragraph from former Australian Ambassador to China, Geoff Raby, still rings true:
“The exact shape of the new international order is rapidly coming into sharper focus, and China’s rise has been the principal catalyst in its remaking. This has been accelerated by the ‘black swan’ event of the election of Donald Trump with his Make America Great Again policies, under which the US has withdrawn from its accustomed role of providing global leadership of a unipolar international order.”

As for the impact of Trump increasing tariffs on Australian goods, it is the stuff of fevered speculation about how which minister or diplomat might be able to successfully wheedle a dispensation from the administration and would matter to some individual businesses, but overall, it would barely register.

The US enjoys a fat trade surplus with Australia but takes just 5 per cent of our exports, $33.6 billion worth last year out of our total exports of $671 billion. That American total is the same as just the growth in our exports to China in 2023.

A few American sheep and goat farmers might benefit and a few here do less well, but that’s about it. The tourists will keep coming, America will keep buying the minerals it needs.

The “could” category for Australia’s bipartisan absorption into America’s military apparatus is unlikely to be affected. The transactional Trump will like us paying all our way and then some, giving the US cold cash as well as navy, air force and troop bases on top of the long-standing spook (Pine Gap) and naval communications (Exmouth) facilities of nominal Australian command.

A supposed danger “could” is Trump speeding up an American retreat from Asia, as Professor Hugh White has long warned. Trump reaching an understanding with fellow “strong man” Xi is not impossible to imagine. For all his tough talk, Trump the draft dodger is proud of not taking the US into war in his first term.

Australia’s chronic insecurity about being part of Asia without big Anglo protectors would see us stranded with commitments to inappropriate military acquisitions for our defence. There’s no point buying nuclear-powered subs for sitting in the South China Sea as part of the US Navy if the US Navy has gone home.

So the external “could” question is wide, but not of itself so fearsome. The actual bad part is what the rise of Trumpism does to our domestic politics – encourages the Right to double down on Trumpism tactics, appealing to our baser nature.

As I’ve written before, Trump normalising poisonous politics, making the unacceptable acceptable, encourages others who follow his playbook to do the same.

The sight of Peter Dutton’s great friend and benefactor, Gina Rinehart, celebrating with kindred spirits at Mar-a-Lago demonstrates the influence from on high.

https://johnmenadue.com/trumping-australia/

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