United States President Donald Trump says most trading partners that do not negotiate separate trade deals will soon face tariffs of 15 per cent to 20 per cent on their exports to the US, well above the broad 10 per cent tariff he imposed in April.
Trump's warning came during a meeting with UK Prime Minister Keir Starmer on Monday (local time), and follows the announcement of a trade deal between the US and the European Union.
Trump told reporters his administration will notify about 200 countries soon of their new "world tariff" rate.
The Australian government says the prospect of changing tariffs is "unsurprising" but continues to assert they are "unjustified". They have also drawn criticism from the federal Opposition, which has also raised concern over the state of the Australia-US relationship.
'Act of economic self-harm'
Responding to the announcement, a spokesperson for Trade Minister Don Farrell said the government's position is unchanged and "any tariffs on Australian goods are unjustified and an act of economic self-harm."
"We will continue to engage at all levels to advocate for the removal of all tariffs, in line with our free trade agreement with the United States," Farrell said.
Assistant treasurer Daniel Mulino told Sky News the government is speaking to the US administration about the situation which has "been in a state of flux for some time".
"It's not surprising that there would be a statement that would suggest a change. The president's been wanting to adjust his bargaining position in a range of ways along the way."
Mulino said Australia has "a good a deal as anybody" with the US right now and the government will "continue to engage with the US government intensely on these matters."
Opposition trade minister Kevin Hogan described Trump's latest proposal as "bad policy", and one he said could impact inflation in the US, hurt American consumers, and was a danger to global economic growth.
Hogan also said Prime Minister Anthony Albanese should seek a face-to-face meeting with Trump to put forward a "very strong sovereign case ... that their policy is bad".
Albanese was meant to meet with Trump on the sidelines of the G7 summit in June but the talks were cancelled when the US president departed amid conflict between Israel and Iran.
There could be a new opportunity for talks around the time of the United Nations General Assembly meeting in New York in September, or the Quad leaders' summit in India later this year.
Opposition frontbencher James Paterson said Albanese should have had a face-to-face meeting with Trump by now and that there was "enough evidence" to suggest there was a problem in the Australia-US relationship.
"I am concerned by the way in which the Australian government continually seems to be surprised by these developments," The Liberal senator told Sky News.
"I absolutely concede this is an unconventional US administration that changes its policy, often at short notice, but I think there’s enough evidence now in the public realm that we do have a problem in the bilateral relationship between Australia and the United States."
University of Sydney US politics expert David Smith told the Australian Associated Press it's proving hard for countries to talk their way out of tariffs on their exports to the US.
Australia, like other nations, might instead have to pivot approaches and try to strategically position its industries within these deals, he said.
For example, the US pharmaceutical sector has long taken issue with Australia's Pharmaceutical Benefits Scheme (PBS) and urged the president to act.
In early July, Trump threatened a 200 per cent tariff on pharmaceuticals, which could be seen as a way for the US to chip away at the PBS in exchange for a trade deal.
Both of Australia's major parties have maintained the program is not up for negotiation.
Instead, the federal government revealed it would lift restrictions on certain US beef imports — a decision the Trump administration hailed as a "major trade breakthrough".
"Australia is thinking about other areas where we would be prepared to make concessions, because we were not going to be making concessions on (the PBS)," Smith said.
Albanese says the government is engaging in Australia's national interest.
While the government said its decision to lift restrictions followed a decade-long scientific review and noted the measure would not compromise biosecurity, the opposition and figures within the cattle industry have called for an independent examination of the issue.
With additional reporting by the Australian Associated Press and Reuters news agencies.
