WWN#42 – Trump & Australia: Trade Agreements & Tariffs

POTUS - Steel and Aluminium Tariffs.jpg

Source: Reuters

What’s Been Happening?

In January 2017, US President Trump signed a presidential memorandum to withdraw the United States from the Trans-Pacific Partnership (TPP). Trump had previously argued that the agreement harms the U.S economy and the TPP was a “disaster done and pushed by special interests who want to rape our country”.

Despite their most influential country dropping out of the agreement, trade ministers from 11 remaining countries decided to press ahead in March this year, saying that they were showing resolve against protectionism through global trade. The new TPP deal covers Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Altogether, the pact covers 500 million people who account for 13 percent of the global economy.

What Now?

Trump has alienated the United States from its allies and other countries further by declaring that he will impose levy penalties of 25 percent on steel and 10 percent on aluminium imports as part of his “America first” pitch for local jobs. Exemptions based on national security grounds and the economic relationships between various countries and the U.S will ideally be granted within the two week waiting period before the tariffs take effect. Neighbours Canada and Mexico have already been excluded by Trump as long as they negotiate a new North America Free Trade agreement.

On the other hand, China immediately threatened to curb imports of U.S soybeans in retaliation while the E.U has simply stated that they will react firmly with countermeasures to be proposed within days.

Following the announcement, Australia’s PM Malcolm Turnbull phoned President Trump and said “a good and very productive discussion” took place. It was verbally confirmed between the two that tariffs would not be imposed on Australian companies exporting steel and aluminium. Turnbull has said that he reminded the U.S President of the good trade and military relationship between and the US. 60 percent of Australia’s “warfighting assets” are derived from the US and thousands of U.S marines rotate through Darwin every year.

What’s Next?

There are concerns that the implementation of tariffs can launch a trade war that will hurt other industries under a tit-for-tat approach. House Speaker Paul Ryan hopes that Mr Trump would “consider the unintended consequences of this idea and look at other approaches before moving forward”.

Some business leaders suspect that the steel and aluminium moves are a prelude to an increasingly protectionist administration, with upcoming moves likely to target China who, according to the Commerce Department, sold $375 billion more goods and services in the United States than what it had ordered.

There is also no time limit on how long the tariffs can last. If Trump wants to change the tariffs or introduce exemptions, he can file follow-on orders. Although countries can file a complaint at the World Trade Organisation, it would take years to make and enforce a ruling against the U.S who will likely argue that tariffs should be allowed to protect national security.


WWN21# – The Qatar Crisis: Trump Talks & Saudi Arabia Listens


What’s Been Happening?

A few weeks ago, President Trump made his first overseas trip to Saudi Arabia where he delivered an address to at least dozens of Arab and Muslim-majority countries at the Arab Islamic American Summit.

His speech focused on the long-standing fight against extremists as he urged Middle East nations to do more. “Drive them out of your places of worship. Drive them out of your communities. Drive them out of your holy land. And drive them out of this Earth.”

Later on though, his speech turned to harsh criticism of Iran as a government that speaks openly of mass murder, with vows to destroy Israel, America and other nations in the room. The anti-Iran language is likely to resonate well with Saudi Arabia being a largely Sunni Muslim population as opposed to Iran who is the region’s Shia Muslim power.


What Now? Operation Isolate Qatar Commences

Trump’s speech seems to have successfully galvanized some Arab nations into action as Bahrain, Egypt, Saudi Arabia, the United Arab Emirates and Yemen simultaneously severed diplomatic ties with Qatar for supporting terrorism.

Some action points:

  • Saudi Arabia has closed its land border with Qatar through which the tiny nation imports most of its food.
  • All countries have ordered their citizens to leave Qatar and for Qataris abroad to return to their country within 14 days.
  • Diplomatic staff from the Arab nations will be withdrawn from Qatar and Qatar’s diplomats will be ejected.

All nations plan to cut air and sea traffic with some regional airlines having already announced that they would suspend services (e.g. Etihad, Emirates, Air Arabia, Bahrain’s Gulf Air).

Trump congratulated Saudi Arabia and himself, taking some credit for the action by tweeting on Twitter: “So good to see the Saudi Arabia visit with the King and 50 countries already paying off… they said they would take a hard line on funding extremism and all reference was pointing to Qatar”.

All of this however, is actually a big problem for the United States who happens to maintain its biggest concentration of military personnel in the Middle East,at Qatar’s Al Udeid Air Base in its fight against ISIS. It needs everyone getting along for its operations to continue smoothly. U.S Intelligence Officials have said that they believe the diplomatic crisis could instead be the result of a Russian hack involving the planting of a fake news story with Qatar’s State News Agency. The false news item reportedly carried false remarks from Qatar’s ruler that were friendly to Iran and Israel.

What’s Next?

Trump’s twitter messages is likely to worsen the dispute between Qatar and the other countries. In fact, it only adds further to his own credibility crisis as the messages seem to directly contradict his previous praise of Qatar during the summit as a strategic partner in the war on terrorism.

Meanwhile, the Saudis will certainly be hoping that Qatar acquiesces to its demands including: curb its State news agency Al-Jazeera, agree to Saudi positions on various conflicts in Eygpt, Israel-Palestine, Libya and Syria, and most importantly, take a harder stance towards Iran. The last one would be the most difficult to achieve as Qatar and Iran share the world’s largest independent gas field beneath the waters of the Persian Gulf and have played at being friendly neighbours with each other in the past.

In the case of Qatar, they are more than likely hoping for some help from the international community in defusing the dispute and restore diplomatic ties with everyone. It seems that much of it may be up to Trump – whether he will walk the talk or simply talk the talk.


WWN #11 – Blocked again?! Trump’s Travel Ban Version 2.0

What’s been happening?

Earlier this year, Trump signed an executive order which temporarily banned nearly all travellers coming from seven Muslim-majority countries (see WWN #6 – Trump’s Travel Ban & Appeal). It wasn’t received well to say the least, creating chaos at airports and confusion for everyone. After several attorney-generals took the matter to the courts and won, the ban was put on hold.

As a consequence, Trump seems to have decided to write a new ban, one that he has said himself to be a “watered-down version of the order that was blocked by another judge and should never have been blocked to start with”.  The second executive order excludes Iraq and narrows the countries down to six – Iran, Syria, Sudan, Somalia, Libya and Yemen. It also explicitly exempts people with valid visas and green cards while making it clear that US agencies will review case-by-case exceptions. These changes appear to be an attempt to

What Now? 

The order was supposed to take effect on 16th of March but in the hours before it could happen, judges in two federal courts (Maryland and Hawaii) have issued temporary restraining orders (TRO) that have blocked Trump’s second travel ban nationwide on the basis that his order is “likely” to violate the constitution. The federal judge in Hawaii said that the order was clearly “issued with a purpose to disfavour a particular religion”. In his ruling, he notes statements in January made by Trump’s adviser Rudolph Gulliani who quoted Trump as having said “Muslim ban” and “Show me the right way to do it legally”. As the rulings are only temporary, further hearing must take place to determine whether they should be extended as the “merits” of the case have not been fully argued.

In an evening rally in Nashville, Tennessee, a visibly irate Trump branded the rulings as an “unprecedented judicial overreach”. His administration contends that the president should retain the power to suspend immigration when he deems it to be in the national interest of the country.

What’s Next? A Legal Battle Ahead

In Trump’s words, he will “take the case as far as it goes”. It’s therefore likely that the revised order will be taken to the courts again, with the Hawaii decision expected to go to the Ninth Circuit Court of Appeals. This would be the same court that upheld the ruling made by a Seattle court to stay the original travel ban. Other states such as California, New York and Washington state are also looking to take legal action against the revised ban.

Trump also suggested that he may reinstate the first executive order that was blocked but the possibility of this occurring seems quite low as such a move is expected to lead to public backlash against the Trump administration which was apparent during the very short time that the first travel ban was in effect.


WWN #6 – Trump’s Travel Ban & Appeal

What’s been happening?
Countries affected by Travel Ban.png

8 executive orders and 12 memoranda. Those are the latest numbers so far for President Trump who has issued more orders and memoranda than any other president before him in the same period. One of his most controversial executive orders was a travel ban signed in late January which applied to nearly all travellers that were from seven Muslim-majority countries. Under the order, they were not permitted to enter the U.S for at least 90 days. According to 2015 data published by the World Bank, this would affect at least 218 million people from those countries.

Needless to say, chaos ensued across America as airports struggled to adjust to the new directives. Some people arriving in the U.S were detained indefinitely while others were prevented from boarding flights. Protests occurred at airports and numerous lawsuits were filed in courts around the country with Washington State’s attorney general Bob Ferguson being one of the first to do so. U.S District Court Judge James Robert of Seattle was one of many judges that granted a temporary restraining order on Trump’s travel ban.

What Now? 3-0

On the 9th of February, all three judges from the U.S. Court of Appeals for the 9th Circuit upheld the Seattle judge’s ruling. It is important to note that the decision was made only on the issue of the temporary block on Trump’s immigration ban and the legality of the President’s order under the Constitution was not examined. The Justice Department’s argument that suspension of the immigration order should be lifted immediately for national security reasons was dismissed due to insufficient evidence presented. The judges also rejected the last minute argument that the courts lacked the right to review the president’s executive order. In their unanimous opinion, the judges wrote that there is “no precedent to support this claimed unreviewability, which runs contrary to the fundamental structure of our constitutional democracy.”

As always, Trump promptly resorted to Twitter to publicise his response to the ruling:

What’s Next?

Given the outcome, Trump and his administration have a couple of options:

  • Instruct the Justice Department to escalate the case to the Supreme Court. This would be very unlikely as a senior official of the Trump administration has already made a statement that they would not pursue this. In the event that the statement is withdrawn and they ask the Supreme Court to reconsider the case, it would still be a lengthy review process and would need at least five out of eight votes to overturn the lower court’s decision as a tie (4-4) will mean that the previous ruling stands.
  • Have the case reconsidered by a larger panel of judges in the Court of Appeals. This could prove difficult to succeed in as the San Francisco-based court is considered to be one of the most liberal in the country.
  • Signing a new executive order that would effectively replace the existing one to carry out his immigration policies in a different manner. Trump said himself that this was an option that he was definitely considering, “a brand new order” that could be issued as soon as Monday or Tuesday next week.
  • Modify the executive order in terms of scope or duration in light of the controversy that it has generated. It’s a nice way of “backing out” and restoring favour with the public.

Looking ahead, it seems that Trump is officially between a rock and hard place.