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Transcripts
July 10, 2025
PETER STEFANOVIC: Let's bring in the Shadow Finance Minister, James Paterson. James, good to see you. So we've gone through this report. There's no one on record. But what's your reaction to it if it's true?
SENATOR JAMES PATERSON: Well, good morning, Pete. What this report shows is that there's a range of views within the Trump administration on AUKUS. In some ways, it's up for grabs, or in a more pessimistic view, it's in the balance. And it shows that energetic Australian statecraft could save AUKUS, could secure support for AUKUS, and should ensure the transfer of those Virginia-class submarines. But negligent or passive Australian diplomacy could put it at risk. And unfortunately, that's exactly what we're seeing from the Albanese government. I think they are taking our American friends for granted.
PETER STEFANOVIC: I was just going to pick up on that point, because the government has said up until this point that the U.S. is perfectly entitled to a review, given a new administration has stepped in.
SENATOR JAMES PATERSON: Well, sure, that's fine. But we are entitled to try and influence that process. And any country with any diplomatic heft or ability to move quickly would be all over this. And I've got no sense that all of that's happening from the Albanese government. It is now 247 days since President Trump was elected. And Prime Minister Albanese is one of the only world leaders not to have a face-to-face meeting with him, not to sit down with him, not to even have made an attempt to go to Washington, D.C. to meet with the President. And that is alarming. Now, we've also got a problem where there are credible media reports that speculate that our U.S. Ambassador, Kevin Rudd, is not able to get a meeting in the White House. Now, if that is true, then that is making this an even harder task for us. So we should be able to save AUKUS. But we are not going to save AUKUS if we just let this thing on cruise. If we don't take charge of it, if the Prime Minister doesn't personally take charge, get over to Washington, D.C. and persuade the President in person of the merits of this deal and the things that America gains from this deal, which are very significant.
PETER STEFANOVIC: So, do you think it's those comments from Rudd in the past that are affecting things?
SENATOR JAMES PATERSON: I can only speculate, Pete. I have been to Washington, D.C., while Kevin has been the ambassador. I have seen that he does have good access to Congress, for example. I know he has good access in the intelligence community, even in the Defence Department. But this decision will be made in the White House. This is an administration that is driven from the White House, from the President in particular. His personal whims and views influence policy in a more profound way than any previous President. And so if you don't have access to the White House, which is speculated in the case of the ambassador, then you can't influence that worldview. And it's doubly worse if your Prime Minister hasn't been to the White House to meet with a President. And that's why I think they're being reckless, I think they are being negligent, they're taking it for granted.
PETER STEFANOVIC: Yeah, just a final note on this before we get to tariffs, etc. This report also goes on to say that the proviso would be that if China moves on Taiwan, the AUKUS subs would be necessary to help the U.S. out. So effectively, our hands would be tied, and we'd be forced into war. Do you see that as being the case?
SENATOR JAMES PATERSON: Two very brief things I'd say about that. Firstly, Australia's interest in relation to Taiwan are very clear. We believe in the peaceful preservation of the status quo. We want no unilateral changes by force to the status quo across the Taiwan Straits, and our interest is in preventing conflict over Taiwan through deterrence with our allies, including the United States. But the second thing I would say is that if you read military strategists and analysts closely, the timelines that they are worried about are frankly far before any AUKUS submarine or Virginia-class submarine is transferred to Australia in the early 2030s. They're worried about the next few years in the mid to late 2020s. So I doubt that will be the decisive factor or question for the next U.S. administration to certify the transfer of the Virginia-class submarines.
PETER STEFANOVIC: Okay, that's a good point. Let's get to tariffs, because going through Trump's list and there's been a few more letters that have been sent out this morning, James. Brazil's got one, 50% tariff hike that it's going to face. We're not on there. We haven't received a letter up until this point. And it's getting to the point now where you think, well, we're probably not going to get one, so 10% baseline it is. I mean, should we be happy with that? All things considered.
SENATOR JAMES PATERSON: Well, this is one of those cases, Pete, where we hope no news is good news, but until it's confirmed, I think we have to wait and see. And even if we were to have a 10% tariff on Australia, that would be 10% too high. The only fair tariff rate on Australia is 0% given the US-Australia free trade agreement, given the U.S. trade surplus with Australia, which has been a lifetime of trade surplus. But again, this is an issue where I'm really worried about the negligent and reticent approach that the government is taking. The Prime Minister should be over there making the case in person with the President of why Australia deserves an exemption, as Keir Starmer has successfully advocated for in relation to steel and aluminium. And I'm particularly worried about the reports today that pharmaceuticals could be hit with an enormous tariff. We export about $3 billion worth of pharmaceuticals to the United States every year. It's a very significant industry in Australia, which employs a large number of people. It is advanced, high-end manufacturing, which is a very lucrative industry and a very good trading relationship for both the United States and Australia, and if that were hit, then that will have a very profound effect, and we're just not fighting enough to make sure that it doesn't happen.
PETER STEFANOVIC: But I mean, is this, and we'll just have to close on this point, I mean, you've got companies like CSL that have already set up shop in the United States, if more businesses do that, then they won't cop that, which is the President's point. So is this an encouragement, if you will, a slight nudge that some Australian companies should just have moved to the U.S.?
SENATOR JAMES PATERSON: Certainly, it appears to be the President's intention to encourage domestic manufacturing in the United States and investment in the United States, and we can't control what he does there. What we control is firstly, putting our best case forward as to why we don't deserve tariffs, and secondly, making sure that our economy is as competitive as possible, so whether it's the United States or any other trading partner that puts tariffs in place, we can still compete. And what we need to do is have an actual productivity agenda, not just a talkfest. And that remains to be seen from this government. They're saying the right things about productivity, but their record on productivity in their first term in office is atrocious. We went back a decade to 2016 levels, and that's why living standards are falling in Australia, and they will continue to, until we can actually deal with the red tape burden that this government inflicted on the country in their first term.
PETER STEFANOVIC: All right, that'll do. James, good to talk to you, though. We'll see you again next week.
ENDS