Trade war unlikely, former US speaker says

A trade war driven by the Trump-administration’s protectionist policies is probably unlikely, former US House of Representatives speaker John Boehner told a Perth audience last night, words that may offer some comfort for those in Western Australia’s export industries.

Speaking at an event hosted by the Perth USAsia Centre, Mr Boehner, who served as America’s most senior legislator for nearly five years, said Donald Trump’s style was different to his.

But despite the president’s anti-trade rhetoric, Mr Boehner said he thought the strategy was motivated by a desire for dealmaking.

“The president has been on this anti-trade (crusade) for some time during the campaign,” Mr Boehner told the audience.

“The more I watch this, the more I understand what the game plan is.

“The game plan isn't to start a trade war.

“The game plan is to get some of these countries to the bargaining table and get a deal.”

Mr Trump fired the first volley in a rising trade dispute earlier this year when he imposed tariffs on aluminium and steel imports.

Australia has had some success in avoiding the damage, with the federal government securing an exemption for NSW steel exports.

But a more significant impact for Australia would be on the iron ore market, with the majority of iron ore production heading to China for use in that country’s steel manufacturing sector.

A shock to that market would flow through to iron ore.

Mr Boehner viewed a major shake up as unlikely, however.

“(Mr Trump is) applying his style of pressure to get people to the bargaining table,” he said.

“We're not going to see big dislocations in our trade agreements or in our trade.”

Chinese support would also be needed to get a deal with North Korea, Mr Boehner said.

Nonetheless, the US’s election campaign in 2016 had dragged free trade through the mud, he said.

It had probably been set back 10 years, he added.