On Wednesday morning, Treasurer Jim Chalmers spoke with his US counterpart, Treasury secretary Scott Bessent, about the US-Australia economic relationship.

On Tuesday (24 June), Chalmers flagged that he would use the opportunity to lobby Bessent for tariff exemptions and discuss global economic volatility amid rising geopolitical tensions.

“I expect the conversation to traverse issues like critical minerals, legislation before the US Congress, obviously trade and tariffs, but also this global economic uncertainty that we’re seeing around the world in the Middle East but also in Eastern Europe, also closer to home,” Chalmers told reporters.

Australia’s critical mineral reserves could be an important bargaining chip in tariff negotiations as it continues to lobby for an exemption from the 10 per cent US tariff rate.

The government’s $1.2 billion critical minerals strategic reserve would likely be welcomed by the US as an early step in reducing China’s ongoing dominance over the global critical minerals sector, Commonwealth Bank economists said last month.

China accounted for 61 per cent of rare earth element (REE) production and 92 per cent of their processing in 2023, the International Energy Agency (IEA) estimated, giving it a near monopoly on the critical minerals that the US relies upon for its national security.

Outside of China, Australia is one of the few countries well-placed to establish capabilities in mining and refining critical minerals. Australia’s 2023–30 critical minerals strategy has sought to establish sovereign capability in critical minerals processing.

However, the Center for Strategic and International Studies (CSIS) noted that Australia is expected to remain reliant on China for REE refining until at least 2026.

The Israel-Iran conflict was also likely a hot topic during the treasurers’ discussion on Wednesday. A prolonged conflict in the Middle East would likely spark a global oil price shock which could shave between 0.15 per cent and 0.20 per cent off Australia’s GDP in 2025 through its effect on oil prices, KPMG said.

“We do have very substantial concerns about the global economy, whether it’s the impact on oil prices of what we’re seeing in the Middle East, whether it’s the ongoing implications of Russian aggression in Ukraine, whether it’s the potential impact on global demand of these escalating trade tensions,” Chalmers said on Tuesday.

President Trump’s ‘Big Beautiful Bill’, which could impose higher tax rates on Australian taxpayers earning US-sourced income, was also a likely topic of conversation.

The bill, due to be voted on in the US Senate on Saturday (AEST), could subject Australian entities to US tax rates up to 20 per cent higher than usual.

Under the bill, “discriminatory foreign countries” would be targeted with retaliatory tax hikes. It identified the digital services tax, undertaxed profits rule and diverted profits tax rules as unfair tax policies that warrant retaliation, Pitcher Partners said.

Pitcher Partners warned that Australia's adoption of OECD global minimum tax rules and multinational anti-avoidance tax provisions could be targeted under this criteria.

“The bill will ensure the United States remains the premier destination for global capital, while protecting American companies and workers from foreign taxes,” Bessent said last Tuesday.

“The passage of this bill will deliver the permanence and certainty both individual taxpayers and businesses alike are looking for, driving growth and unleashing the American economy.”

Chalmers told Sky News on Wednesday morning that global economic uncertainty, geopolitical tensions and the US tax and spending bill would all be on the table in his discussion with Bessent.

“That will be a really important opportunity for us to talk about the uncertainty in the global economy, the implications of higher oil prices … critical minerals and how we work together there [and] some of the international tax issues including issues before the US Congress.”