Senator’s big call after Trump win

Nationals senator Matt Canavan supports Australia playing hard ball like the United States and slapping tariffs on Chinese products.

Throughout his campaign US President-elect Donald Trump was trumpeting the use of tariffs to boost American manufacturing.

Inflation on annual terms in the US is currently running at 2.4 per cent – less than in Australia – but stateside inflation peaked far higher, at 9.1 per cent in mid-2022.

The cost of living was central in the US election, and now Mr Trump’s win has Australia trying to forecast the economic outcomes his second presidency will have.

“I do think we should put tariffs on China to protect our own industry,” Senator Canavan said on Q&A on Monday.

“We’re on the cusp of losing our second last steel mill in Whyalla … we are not self-sufficient.”

The Queensland senator said Australia mined vast amounts of coal and iron ore, but ships most of it overseas for processing.

“Wouldn’t it be nice to have a world where we actually are sovereign in our own interests and somewhat independent?,” the Senator said.

“Because we have all the resources to do that and why should we allow subsidised Chinese steel to continue to flood our market.”

Mr Trump has threatened to impose an across-the-board 20 per cent tariff on all imported goods, with a potentially higher rate for competitor nations such as China.

A trade war between the US and China would leave Australia between an economic rock and a hard place; between our largest military and cultural ally, and our largest trading partner.

Mr Trump, who decisively won last week’s presidential election against Kamala Harris, plans to install a blanket tariff of 10 to 20 per cent across every country, with additional tariffs of 60 to 100 per cent for goods imported from China.

He said it was a way of extracting money from rival nations, although economists disagree.

In the short-term the Trump tariffs are unlikely to have much of an impact on Australia and shouldn’t slow the Reserve Bank’s rate cutting cycle, despite fears of an inflation spike.

But over the longer term, economist Saul Eslake said other countries would impose tariffs back on the US in retaliation.

“There is a strong likelihood other countries will retaliate against Trump’s tariffs and that is incredibly stupid,” he said.

“In effect it is countries saying if you’re going to shoot yourself in the foot and hurt your consumers, well I will shoot myself in the foot and hurt my consumers.”