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Deal or no deal?
30 July 2025
Ahead of the looming 1 August tariff deadline, President of the European Commission Ursula von der Leyen flew to Scotland to meet face-to-face with President Trump on the sidelines of his golfing trip, to hash out a last-minute trade deal between the United States and the European Union. While a 15% baseline tariff for all EU goods imported to the United States with no EU tariff on US goods may sound like a bad outcome for Europe, it did halve the pending US tariffs on EU products.
President Trump has also announced trade deals with multiple countries, including the United Kingdom (reducing tariffs from 25% to 10%), Japan (reducing tariffs from 25% to 15%) and Indonesia (reducing tariffs from 32% to 19%). Each of these trade deals comes with additional agreements around the purchase of US military equipment, energy, investment or committing to certain national security measures.
The trade deals announced so far do not include Australia, which has been trying to negotiate a deal – including on critical minerals – for some time. While most countries are holding back concessions on their non-tariff trade barriers for negotiated deals, last week Australia repealed a longstanding point of friction, its ban on importing US beef that may have been sourced in Mexico or Canada. The review of US beef imports to Australia had been an ongoing process but the timing of the ban’s lifting does bode well for Australia-US trade negotiations, with President Trump able to declare a win and Prime Minister Albanese now able to confirm traceability of US beef.
Compared to other “Liberation Day” tariff recipients, Australia started from a different place. Australia has long had one of the largest trade deficits with the United States, importing more than double from the United States than it exports, and Australia has an existing free trade agreement. On 2 April, Australia received the baseline 10% tariff, the lowest of any country.
Yet the story for Australia has worsened over the past few months. Steel and aluminium tariffs doubled from 25% to 50%. President Trump has threatened a 200% tariff on pharmaceuticals, which are one of Australia's largest exports to the United States. And this week, President Trump publicly mused over a new “world tariff” rate of “somewhere in the 15-20% range.”
Australia has yet to line up a face-to-face meeting with President Trump, but it looks increasingly unlikely Australia – or any nation – will be able to secure any full tariff exemption. As Associate Professor David Smith told the AAP, “Trump really does see tariffs as something that is good in themselves.”
Mari Koeck
Director, Engagement and Impact
Lead image: President of the European Commission Ursula von der Leyen meets with US President Donald Trump at Trump Turnberry golf club on 27 July 2025 in Scotland. US President Donald Trump is visiting his Trump Turnberry golf course, as well as Trump International Golf Links in Aberdeenshire, during a brief visit to Scotland from 25-29 July (Photo by Andrew Harnik for Getty Images).
"If we are successful, I think it would be the biggest deal each of us has ever struck."
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Our experts in the news
AAP | 'Bad policy': Australia fears double US tariff rate
Associate Professor David Smith spoke to the AAP about President Trump's tariffs and despite initial hopes that "countries could negotiate their way out of tariffs — that’s not really happening.”
CNA | 'Mission complete': What's in the US-Japan trade deal?
CNA reports that United States President Donald Trump on Tuesday (Jul 22) announced a trade deal with Japan, with both countries agreeing to reduce additional tariffs on Japanese automobiles from 25% to 15%. The US and the Philippines also on agreed a trade deal that will see goods from the Southeast Asian country face a 19% tariff. USSC Director of Research Jared Mondschein spoke with the channel on these developments.
Topic snapshot
OVERVIEW
USSC Insights | America's AI Action Plan
On 23 July, President Donald Trump unveiled America’s AI Action Plan, a pro-innovation push to win the AI race against China. The plan outlines over 90 initiatives focusing on deregulation, industry support, accelerating AI adoption and securing the critical inputs to AI like chips, energy and talent. AI infrastructure projects – including data centres, power plants and semiconductor facilities – receive the biggest boost through federal financing and expedited approvals.
For allies and partners, the US will launch programs to export its AI technology stack and prevent countries from turning to Chinese alternatives. These AI exports come with some strings attached, with partners expected to comply with tighter export controls and security requirements.
The Action Plan is another clear sign that AI competition is heating up. America wants to win, and it will marshal all its financial and diplomatic tools and innovative capacity to do so. With Australia expected to release a National AI Capability Plan by the end of the year, now is the time to consider how Australia aligns with US strategies and what success could look like.
Stay tuned for an upcoming brief and podcast on America’s AI Action Plan and what it means for Australia. Sign up for research alerts to be the first to know when we release major research on this topic.
Olivia Shen
Director, Strategic Technologies
Johanna Lim
Research Associate, Strategic Technologies
Upcoming events
CONFERENCE
Sydney International Strategy Forum 2025: Navigating Disruption
From tariffs to artificial intelligence, one word best sums up 2025: disruption. President Donald Trump’s first 100 days featured norm-breaking policies at breakneck pace, often to be overturned days or weeks later. At the same time, the wars in Ukraine and Gaza have entered new eras with high-level negotiations, on-again off-again fighting and a new world order forming in real time to adapt to a changing strategic landscape. The 2024 election trend of turfing incumbents has given way to foreign elections that many perceive to be a referendum on US politics.
What is the future of the United States’ role in the world? How can governments and businesses plan in the midst of constant change? How should allies and partners approach security challenges in 2025 and beyond?
International experts across government, business and research will share their insider insights on the discussions happening in Washington, Tokyo and Canberra and what this means for US allies and partners around the world.
Confirmed speakers include:
- Dr Mira Rapp-Hooper, Former Special Assistant to the US President and former National Security Council Senior Director for East Asia and Oceania
- General David Berger (retired), Former Marine Corps Commandant
- Kori Schake, American Enterprise Institute Director of Foreign and Defence Policy and former National Security Council Director for Defence Strategy
- Lisa Curtis, Center for a New American Security Director of Indo-Pacific Security and former National Security Council Senior Director for South and Central Asia
- Clay Lowery, Institute of International Finance Executive Vice President and former US Treasury Department Assistant Secretary and National Security Council Director for International Finance
- Professor Nobukatsu Kanehara, Sasakawa Peace Foundation Executive Director and former Assistant Chief Cabinet Secretary
17 September 2025
The Four Seasons Hotel, Sydney, Australia
Full price ticket $875
Student ticket $475
PUBLIC FORUM
Japan's defence revolution and Australia-Japan-US trilateralism under Trump 2.0
A panel of experts will unpack Japan’s National Security Strategy and explore the opportunities and challenges for Australia-Japan-US trilateral strategic cooperation under Trump 2.0. The panel will feature Yuki Tatsumi, Senior Director at the Institute for Indo-Pacific Security; Hirohito Ogi, Senior Research Fellow with the Institute of Geoeconomics at the International House of Japan, and Tom Corben, Research Fellow in the Foreign Policy and Defence Program at the USSC, in a conversation moderated by USSC Professor and CEO Dr Michael Green.
6 August 2025
6.00-7.30pmLevel 5 Function Room, The Michael Spence Building (F23) at the Corner of Eastern Avenue and City Road, The University of Sydney NSW 2006
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United States Studies Centre
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University of Sydney NSW 2006