Australia, Trump, and Lessons for Europe
Most Australians have been astonished by the onslaught of controversial actions taken in the first weeks of President Donald Trump 2.0. Many local commentators have responded to this “flooding the zone” strategy with alarm. However, the center-left Labor government, led by Prime Minister Anthony Albanese, has largely kept its own counsel, calmly restating Australian policies and avoiding critique of the new US administration. Even when this small-target approach generated sharp criticism following Trump’s unprecedented Gaza proposals, Albanese reaffirmed he was not going to “give a daily commentary” on Trump’s statements.
With the Australian side avoiding complications, early interactions with senior members of the Trump administration have been constructive and confirmed continuity on agendas that matter most to Australia. US Secretary of State Marco Rubio’s first international engagement was a meeting with “Quad” foreign ministers (the United States, Japan, India, and Australia) and provided reassurance about US commitment to Indo-Pacific regionalism.
Ministerial-level defense talks in February with US Defense Secretary Pete Hegseth (also his first foreign counterpart meeting) provided a recommitment to Indo-Pacific strategic policy pillars and to the AUKUS (Australia, the United Kingdom and the United States) nuclear submarine and advanced capabilities partnership. This positive sentiment was reinforced by Australia’s payment of the first $500 million tranche of its multibillion-dollar contribution to the US industrial base to support the AUKUS program. Australia pointedly emphasized its standing as a model partner through increased defense spending and a commitment to continue “paying our way”. This is a message Australia is likely to keep on repeat given Trump’s past excoriation of allies for unsatisfactory defense expenditures.
However, just as a rising tide lifts all boats, rough seas can knock them all around. Australia has not (yet) found safe harbor from one application of Trump’s go-to statecraft tool: tariffs. Trump’s announcement on February 10 of a 25% tariff on all steel and aluminum imports surprised Australia, particularly as it had had secured an exemption from a similar imposition during Trump’s first term. Although US demand for Australian steel and aluminum is modest, the center-right opposition has sought to portray the development as a test of the Albanese government’s ability to win US concessions. While Albanese quickly secured a commitment from Trump to give “great consideration” to an exemption for Australia, at the time of writing it had not materialized and is opposed by hard-liners.
In making this commitment, Trump highlighted one of Australia’s comparative political advantages: it is one of the few nations with which the US runs a trade surplus. Australia is a major customer for US heavy machinery, high-tech equipment, pharmaceuticals, and aircraft. And the United States has an annual services trade surplus of nearly $13 billion. This data will remain prominent in Australia’s messaging to an administration focused on mercantilist outcomes.
Australia also enjoys unique entrees into the president’s inner circle through business and sporting links that have previously proven effective in opening doors. Moreover, Australia is deeply integrated into US defense and national security systems and has strong connections with related stakeholders across the US government—all of which have intensified with the AUKUS agreement.
Australia is thus as well placed as any country to weather the turbulence of Trump 2.0 and mitigate immediate collateral damage. However, Australia’s longer-term international outlook could be more troubled if the United States persists in the uncompromising manifestation of “America First” unilateralism on display since January.
Even if Australia escapes direct tariff measures, a large-scale global trade war will not be good for an economy that relies on selling resource commodities into the beginning of global supply chains for nearly 60% of its exports and 12% of its GDP. Substitution effects may soften the blow but are unlikely to outweigh reduced demand from key trade partners if their exports to the United States fall significantly.
Poor US policy choices in the Indo-Pacific would undermine Australia’s efforts to influence the evolution of regional strategic competition. Australia aims, using multiple policy tools, to facilitate a balance that preserves regional stability, moderates the People’s Republic of China’s (PRC) exercise of its growing power, and deters excesses. Effective US engagement is critical to those goals, in terms of both the direct security effects it produces in the region and the contribution it makes to regional architecture and development. US missteps could see regional nations pivot into closer alignment with the PRC.
Any broad self-harm to the United States’ international standing and its commitment to the international rules-based order will weaken the credibility of that order. Like other “non-great” powers, Australia depends on broad acceptance of international institutions, laws, and customs to civilize international relations. Should Washington take on a diminished or counterproductive role, its competitors, especially the PRC and Russia, will gain greater opportunities to shape that order, providing space for illiberal regimes elsewhere. For its part, the PRC has been making adjustments over recent years that enhance its ability to influence international systems. It has softened its “wolf-warrior” posture, made progress in addressing longstanding disputes with India and Japan, been more accommodating in its regional economic engagement, sought a larger footprint in multilateral institutions, and encouraged wider participation in forums such as BRICs and the Shanghai Cooperation Organization where it wields substantial influence.
As Australians grasp the potential wider implications of the latest iteration of “America First”, there are signs of their corrosive effect on attitudes towards the US alliance. Left-leaning commentators in Australia have long argued that Australia should be less strategically enmeshed with the United States. However, Trump’s early international actions have prompted more centrist-oriented commentators to express similar sentiments. Most notably, former Foreign Affairs and Trade Secretary Peter Varghese recently argued that, while Australia should remain a committed alliance partner, it should seek greater independent agency internationally, including by increasing sovereign defense investment.
A more critical domestic debate will sharpen the dilemma for Australian policymakers if they are pressed by the United States to support uncomfortable or poorly conceived international initiatives. Nonetheless, even as Trump has demonstrated his willingness to abandon multilateral endeavors Australia cares about, such as the Paris Climate Agreement, the bilateral US-Australia strategic partnership is entrenched enough to endure an isolationist US presidency.
What cues, if any, can Europe take from Australia’s circumstances? Europe’s trade story is mixed: overall, Europe has the largest trade surplus with the United States after China, but services trade is much more favorable to the United States, with the EU running a services deficit of over $76 billion in 2023. Emphasizing Europe’s strong consumption of US technology services may have particular significance given the administration’s connections with Silicon Valley.
Europe naturally has broader connections to the US system than does Australia, and some of those connections, even if unconventional, are close to Trump’s orbit. Cooperating with—and influencing—potentially useful elements of the Trump agenda should be a priority. For example, Australia-US collaboration on critical minerals commenced during the first Trump administration and continued under Biden, to mutual strategic advantage.
Most importantly, Australia and Europe share an abiding interest in the durability of the international rules-based order and its institutions. Like-minded nations will need to take greater responsibility—politically and financially—for the health and welfare of these systems and would be wise to treat this as a permanent realignment.
Despite geographic separation, European policymakers should pay attention to the Australian experience of alliance management—for better or worse.