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Penny Wong to meet with US counterpart ahead of tariff pause expiry

Economy
01 July 2025

Australia’s foreign minister will visit the US this week to advocate for Australia’s economic and security interests as the 9 July tariff deadline looms.

On Sunday (GMT-4), US President Donald Trump flagged that he did not intend to extend the 90-day pause on US Liberation Day tariffs, set to expire on 9 July.

“We’ll look at how a country treats us — are they good, are they not so good — some countries we don’t care [about], we’ll just send a high number out,” Trump told Fox News’ Sunday Morning Futures.

The tariffs, which were imposed on 2 April with the aim of correcting US trade deficits, ranged from 10 per cent up to a prohibitive 50 per cent. Australia got hit with the baseline 10 per cent rate, likely spared from higher tariffs due to its own trade deficit with the US.

 
 

On 9 April, the US revised most ‘reciprocal’ tariff rates down to the baseline 10 per cent level for three months to allow time for trade negotiations with each country.

This week, Australia's Foreign Minister Penny Wong is set to meet with the Quad Foreign Ministers, a group including herself, US Secretary of State, Marco Rubio; India’s Minister of External Affairs, Subrahmanyam Jaishankar; and Japan’s Minister of Foreign Affairs, Takeshi Iwaya.

The discussions are likely to traverse economic and geopolitical affairs, including the looming 9 July tariff deadline.

“The United States is our closest ally and principal strategic partner. Our alliance contributes to the peace, prosperity and stability of our countries and the region we share,” Wong said in a release on Monday.

“We will continue to work together to further our important economic and security partnership and advance our mutual interests.”

Prime Minister Anthony Albanese told reporters on Monday that Australia would continue to push for the abolition of its 10 per cent tariff rate.

"We'll continue to put our case forward that it shouldn't be 10, it should be zero," he said.

"That is what a reciprocal tariff will be. We have a US Free Trade Agreement, of course, and we've put forward very clearly our arguments. We'll continue to do so.

Defence spending will also be a key point of discussion for the foreign ministers, after NATO members agreed to ratchet up their defence spending to 3.5 per cent of GDP following its summit in June.

Australia has so far resisted calls from the US to boost its own defence spending to 3.5 as fiscal deficits loom over the forward estimates.

Its current annual defence spending is a little over 2 per cent of GDP, a figure projected to rise to 2.4 per cent by 2033–24.

Maritime security specialist Jennifer Parker said that the NATO announcement would likely embolden the US to place stronger pressure on Australia to increase its defence spending.

“Trump’s strategy towards NATO has clearly been to sow ambiguity in the minds of European countries as to the US’ commitment to NATO, to get them to come to the table on defence spending,” Parker wrote for The Conversation.

“This may well be a future Australia faces, too. It could mean a bumpy road ahead for Australia and its most crucial alliance partner.”