President Donald Trump’s declaration that he will impose a blanket 25 percent tariff on steel and aluminium imports to the US has exposed the reality that Australia will not be exempt from the massive global political and economic instability associated with the coming to power of an “America First” regime.

It has also underscored the weakness of the federal Labor government. Prime Minister Anthony Albanese’s response could be described as one of quiet desperation. His attempts to carve out an exemption received a humiliating slapdown the same day as his statements of hope that Australia would not be hit by the imposts.

When Trump made the steel and aluminium announcement, the response was one of panic. Labor’s Trade Minister Don Farrell said he was urgently seeking talks with his US counterparts. Farrell and other Labor leaders repeated earlier talking points aimed at discouraging Trump from hitting Australia with tariffs. They include the US trade surplus with the country, as well as the close strategic and military alliance.

On Tuesday morning, Albanese had a video call with Trump to make the case. In comments afterwards, Trump described Albanese as a “very fine man.” That was revealing, with the prime minister, who hails from the Labor “left” faction, receiving open praise from a fascistic figure whose policies are a massive assault on immigrants, war and dictatorship.

Trump acknowledged the trade surplus. Albanese described the discussion as “constructive and warm,” and said, “We agreed on wording to say publicly, which is that the US President agreed that an exemption was under consideration in the interests of both of our countries.”

Within hours, Trump declared from the Oval Office that there would be “no exemptions,” before contradicting himself and recalling the agreement to give “consideration” to the Australian request.

But then the proclamation of the tariffs was released. “Australia has disregarded its verbal commitment to voluntarily restrain its [aluminium] exports to a reasonable level,” it declared, clearly indicating that the tariffs would go ahead.

Later on Tuesday, that was made even more explicit, with Trump’s senior counsellor for trade and manufacturing, Peter Navarro, telling CNN: “Australia is just killing our aluminium market. President Trump says no, no, we’re not, we’re not doing that anymore.”

Beyond the possible economic consequences down the road, the episode has immediate political implications.

With a federal election due in Australia by May, the Labor government is in a deep-going crisis. It is widely-reviled among working people, due to its imposition of sweeping cuts to living standards amid the inflation surge, as well as its broader reactionary agenda, including support for the Israeli genocide in Gaza and record military spending bound up with Australia’s frontline role in US plans for war with China.

Within ruling circles, there is evident frustration with the weakness of the Labor government. The corporate elite, like its counterparts internationally, is demanding far deeper cuts to social spending than have yet been implemented, and a productivity offensive, aimed at driving up exploitation and boosting profits.

The Labor government has been among the most servile in the world in its embrace of Trump. Albanese has repeatedly expressed his fawning congratulations to the US fascist, while Foreign Minister Penny Wong declared her “honour and privilege” at being present at his inauguration and Defence Minister Richard Marles visited Washington for talks with the administration over the weekend.

As the WSWS has previously noted, this alignment reflects the fact that the dominant sections of the ruling elite view their interests as being bound up with US imperialism, including in its war drive against China. As a middle-order power, the Australian bourgeoisie has always prosecuted its own predatory aims in alliance with the dominant imperialist hegemon of the day, first Britain and then the US.

The embrace of Trump also expresses the lurch to the right of Labor amid its crisis, with the government’s signature policies having been militarism, austerity and an assault on democratic rights, including anti-immigrant measures modelled on those implemented by the US.

However, there is also a sense that Labor had hoped to avoid any frictions with Trump, lest they become a factor in the upcoming election. Labor has presented the smallest target possible to the US strongman, as he has carried out aggressive economic and military policies against foes and erstwhile allies like Canada.

The centrepiece of Marles’ visit to the US was a joint commitment that the AUKUS pact with the US and Britain, for Australia to acquire nuclear-powered submarines directed against China, would proceed. As part of that, Marles provided the first instalment of $US500 million in a $US3 billion Australian commitment to help prop up the US naval shipbuilding sector. The cash handout was also an attempt to head off any tariffs.

But now those calculations have been dealt a blow. Media coverage has pointed to the weak and humiliating optics of Albanese’s call with Trump and his rapid slapdown. The Liberal-National Coalition, while positioning itself as better placed to work with Trump due to shared far-right proclivities, has called for a more aggressive defence of the national interest, including with the US.

To the extent that there has not been a more vociferous attack on Albanese from the media and corporate establishment, it is because they recognise that his weakness is theirs as well, bound up with the parlous position of Australian capitalism.

The economy is in an anaemic state. Annual GDP growth fell from 1 percent in the June quarter to 0.8 percent in the year to September, with growth in the third quarter recording an increase of only 0.3 percent.

The annual growth rate is the weakest since the recession of 1990–91, outside the effect of the COVID-19 pandemic. If not for population increases, the country would be in a recession. GDP per capita has declined for seven quarters in a row—the longest decline since seasonally adjusted records began in 1973. The federal budget is predicted to be in deficit for at least a decade.

Moreover, the ruling elite is caught between its full strategic alignment with the US and its trade dependence on China. Last financial year, bilateral trade between Australia and China increased by 9.2 percent to a record $A326.9 billion. There are fears that, amid an existing slowdown in the Chinese economy, Trump’s trade war agenda will further impact China’s demand for exports, with a flow-on impact on Australia.

The claims of Australian aluminium flooding the US market are clearly overblown. In 2024, Australia was the eighth largest exporter of the metal to the United States. Assertions that there has been a massive growth in exports over the past decade are also false, with repeated fluctuations over that period. There was a sharp increase in 2022–23, but that was bound up with a US search for new supplies amid sanctions on Russia over the Ukraine war. Australian exports declined sharply last year to around 83,000 tonnes in a market of more than 5 million tonnes.

The Australian steel export sector is also small, having been largely dismantled by governments and the corporate elite over the past three decades. In 2023, Australian steel and iron exports to the US were valued at only around $237 million.

The US threats to press ahead regardless of the limited size of the exports are a clear signal that there will be no exemptions from the “America First” drive, again putting allies and opponents on notice.

A comment in the Australian Financial Review this week pointed to another possible motive. It suggested that Trump was using the tariff threat as a thinly-veiled demand that Australia boost its military spending to the 3 percent or more of GDP that Washington has insisted is necessary to drive forward the advanced preparations for war with China, which is viewed as the chief threat to American imperialist dominance.