White House pressures Australia to boost defence spending
White House pressures Australia to boost defence spending
Published 27 June 2025, 9:42 am
The White House has delivered a veiled warning to the Australian Government to increase defence spending as a proportion of GDP, in the wake of NATO's commitments to boost support. It comes after Spain broke with the NATO position and is now facing the threat of increased US tariffs.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Advertiser
an hour ago
- The Advertiser
Arbitrarily increasing defence spending would be a tremendous waste of money. Here's why
The United States is again putting a full-court press on Western nations to boost defence spending. There were reports this week that NATO members are expected to raise defence spending until they spend 5 per cent of GDP on defence. This would include almost doubling spending on defence platforms and assets (from 2 per cent of GDP to 3.5 per cent of GDP) and committing a further 1.5 per cent of GDP on defence-related investments including cyber security. The Treasurer pushed back, saying Australia had already taken significant steps by boosting spending to 2.3 per cent of GDP. He is right to rebuff this target, but not because Labor's defence spending commitment is sufficient for the job. The better reason to reject arbitrary spending levels for defence against GDP is that they tell you almost nothing about the defence capabilities Australia has - or the appropriateness of our defence spending arrangements. In truth, if Australia was to expand its defence spending but continue to spend it in the same way, there is little guarantee of a genuine improvement in our position. Unfortunately, the reality is that both sides of politics have allowed industry concerns and state government parochialism to dominate defence needs when it comes to procurement. There is no better example than our submarine program. Defence ministers continue to insist it is imperative for Australia to have the capability to design and manufacture submarines. This has led to us adopting risky, bespoke submarine designs, creating expensive orphan submarine classes (ones that are used by only one country). Risky procurements like orphan submarines inevitably run over time and over budget. There is also the potential for significant redesign and development costs - especially when those designing and constructing the submarines are effectively learning on the job. The terrible troubles that plagued the Collins Class for the first decade after it was commissioned were a case in point. The fact that we have made so little actual progress on the Collins replacement more than 15 years after the replacement project was first announced is further testament to that fact. Australia is now looking at a path of manufacturing nuclear submarines, an even more complex industry development task than the one we embarked on in the 1980s with the Collins. If Australia wanted to a see an actual return from investing money in industry development, we'd be better off committing to improving the US supply chain for Virginia Class submarines. At least, we'd know from the beginning that those companies can build and deliver a submarine. This is not at all guaranteed should we commit to building an entirely new sub here. Given the risks of cost and time blowouts are well known, why do governments like Australia persist with such a risky procurement strategy? The answer is simple: politics. When it comes to defence spending, there is enormous political pressure from states like South Australia and Victoria to use defence dollars to conduct industry policy. In the case of the submarines, Australia's defence needs have been running a distant second to the need to commit to spending the money in Adelaide. Instead of focusing on how to get the best value capabilities for the money being invested, or ensuring that Australia can fulfil its required defence goals, the states compete to outbid each other for federal defence dollars to be spent in their state. The point is not that Australian defence industry is incapable of producing quality defence equipment; it's that spending the money in Australia for its own sake does nothing for defence. In fact, a disturbing percentage of our defence spending amounts to little more than money laundering handouts to the state governments. In that sense, we are right to push back against NATO and the US. Our approach shouldn't be to raise defence spending, it should be to improve defence capability to meet the tasks required of us. In practice, this means two things. First, Australians need far more clarity on what our defence force is actually for. Without greater clarity on what we are hoping to achieve in the defence space, it is all but impossible for people to understand whether we are headed down the right path. In a world where there is enormous competition for every dollar of government spending, the defence establishment must be as vocal as any other interest group as to why it needs more money. Second, we must genuinely commit to acquiring the capabilities that will best enable us to achieve the goals we have set for our defence force. This may mean some politically unpopular decisions need to be made. So be it. Our politicians are not elected to compete with each other over who can give the most money to the states. In an environment of genuine threats to Australia's safety, we must be ruthless in culling projects that are not meeting our needs. This change in approach should enable us to be far more agile in our defence planning. At the moment, because we are beholden to state government interests, we are committing to defence expenditure decades in advance that may or may not be wasted by the time it is spent. It is clear there has been a significant change in global attitudes to defence and, in particular, defence spending. This is an opportunity for Australia to start taking the issue of defence more seriously. However, throwing tens of billions more dollars at the existing system would be a terrible way to do that. The United States is again putting a full-court press on Western nations to boost defence spending. There were reports this week that NATO members are expected to raise defence spending until they spend 5 per cent of GDP on defence. This would include almost doubling spending on defence platforms and assets (from 2 per cent of GDP to 3.5 per cent of GDP) and committing a further 1.5 per cent of GDP on defence-related investments including cyber security. The Treasurer pushed back, saying Australia had already taken significant steps by boosting spending to 2.3 per cent of GDP. He is right to rebuff this target, but not because Labor's defence spending commitment is sufficient for the job. The better reason to reject arbitrary spending levels for defence against GDP is that they tell you almost nothing about the defence capabilities Australia has - or the appropriateness of our defence spending arrangements. In truth, if Australia was to expand its defence spending but continue to spend it in the same way, there is little guarantee of a genuine improvement in our position. Unfortunately, the reality is that both sides of politics have allowed industry concerns and state government parochialism to dominate defence needs when it comes to procurement. There is no better example than our submarine program. Defence ministers continue to insist it is imperative for Australia to have the capability to design and manufacture submarines. This has led to us adopting risky, bespoke submarine designs, creating expensive orphan submarine classes (ones that are used by only one country). Risky procurements like orphan submarines inevitably run over time and over budget. There is also the potential for significant redesign and development costs - especially when those designing and constructing the submarines are effectively learning on the job. The terrible troubles that plagued the Collins Class for the first decade after it was commissioned were a case in point. The fact that we have made so little actual progress on the Collins replacement more than 15 years after the replacement project was first announced is further testament to that fact. Australia is now looking at a path of manufacturing nuclear submarines, an even more complex industry development task than the one we embarked on in the 1980s with the Collins. If Australia wanted to a see an actual return from investing money in industry development, we'd be better off committing to improving the US supply chain for Virginia Class submarines. At least, we'd know from the beginning that those companies can build and deliver a submarine. This is not at all guaranteed should we commit to building an entirely new sub here. Given the risks of cost and time blowouts are well known, why do governments like Australia persist with such a risky procurement strategy? The answer is simple: politics. When it comes to defence spending, there is enormous political pressure from states like South Australia and Victoria to use defence dollars to conduct industry policy. In the case of the submarines, Australia's defence needs have been running a distant second to the need to commit to spending the money in Adelaide. Instead of focusing on how to get the best value capabilities for the money being invested, or ensuring that Australia can fulfil its required defence goals, the states compete to outbid each other for federal defence dollars to be spent in their state. The point is not that Australian defence industry is incapable of producing quality defence equipment; it's that spending the money in Australia for its own sake does nothing for defence. In fact, a disturbing percentage of our defence spending amounts to little more than money laundering handouts to the state governments. In that sense, we are right to push back against NATO and the US. Our approach shouldn't be to raise defence spending, it should be to improve defence capability to meet the tasks required of us. In practice, this means two things. First, Australians need far more clarity on what our defence force is actually for. Without greater clarity on what we are hoping to achieve in the defence space, it is all but impossible for people to understand whether we are headed down the right path. In a world where there is enormous competition for every dollar of government spending, the defence establishment must be as vocal as any other interest group as to why it needs more money. Second, we must genuinely commit to acquiring the capabilities that will best enable us to achieve the goals we have set for our defence force. This may mean some politically unpopular decisions need to be made. So be it. Our politicians are not elected to compete with each other over who can give the most money to the states. In an environment of genuine threats to Australia's safety, we must be ruthless in culling projects that are not meeting our needs. This change in approach should enable us to be far more agile in our defence planning. At the moment, because we are beholden to state government interests, we are committing to defence expenditure decades in advance that may or may not be wasted by the time it is spent. It is clear there has been a significant change in global attitudes to defence and, in particular, defence spending. This is an opportunity for Australia to start taking the issue of defence more seriously. However, throwing tens of billions more dollars at the existing system would be a terrible way to do that. The United States is again putting a full-court press on Western nations to boost defence spending. There were reports this week that NATO members are expected to raise defence spending until they spend 5 per cent of GDP on defence. This would include almost doubling spending on defence platforms and assets (from 2 per cent of GDP to 3.5 per cent of GDP) and committing a further 1.5 per cent of GDP on defence-related investments including cyber security. The Treasurer pushed back, saying Australia had already taken significant steps by boosting spending to 2.3 per cent of GDP. He is right to rebuff this target, but not because Labor's defence spending commitment is sufficient for the job. The better reason to reject arbitrary spending levels for defence against GDP is that they tell you almost nothing about the defence capabilities Australia has - or the appropriateness of our defence spending arrangements. In truth, if Australia was to expand its defence spending but continue to spend it in the same way, there is little guarantee of a genuine improvement in our position. Unfortunately, the reality is that both sides of politics have allowed industry concerns and state government parochialism to dominate defence needs when it comes to procurement. There is no better example than our submarine program. Defence ministers continue to insist it is imperative for Australia to have the capability to design and manufacture submarines. This has led to us adopting risky, bespoke submarine designs, creating expensive orphan submarine classes (ones that are used by only one country). Risky procurements like orphan submarines inevitably run over time and over budget. There is also the potential for significant redesign and development costs - especially when those designing and constructing the submarines are effectively learning on the job. The terrible troubles that plagued the Collins Class for the first decade after it was commissioned were a case in point. The fact that we have made so little actual progress on the Collins replacement more than 15 years after the replacement project was first announced is further testament to that fact. Australia is now looking at a path of manufacturing nuclear submarines, an even more complex industry development task than the one we embarked on in the 1980s with the Collins. If Australia wanted to a see an actual return from investing money in industry development, we'd be better off committing to improving the US supply chain for Virginia Class submarines. At least, we'd know from the beginning that those companies can build and deliver a submarine. This is not at all guaranteed should we commit to building an entirely new sub here. Given the risks of cost and time blowouts are well known, why do governments like Australia persist with such a risky procurement strategy? The answer is simple: politics. When it comes to defence spending, there is enormous political pressure from states like South Australia and Victoria to use defence dollars to conduct industry policy. In the case of the submarines, Australia's defence needs have been running a distant second to the need to commit to spending the money in Adelaide. Instead of focusing on how to get the best value capabilities for the money being invested, or ensuring that Australia can fulfil its required defence goals, the states compete to outbid each other for federal defence dollars to be spent in their state. The point is not that Australian defence industry is incapable of producing quality defence equipment; it's that spending the money in Australia for its own sake does nothing for defence. In fact, a disturbing percentage of our defence spending amounts to little more than money laundering handouts to the state governments. In that sense, we are right to push back against NATO and the US. Our approach shouldn't be to raise defence spending, it should be to improve defence capability to meet the tasks required of us. In practice, this means two things. First, Australians need far more clarity on what our defence force is actually for. Without greater clarity on what we are hoping to achieve in the defence space, it is all but impossible for people to understand whether we are headed down the right path. In a world where there is enormous competition for every dollar of government spending, the defence establishment must be as vocal as any other interest group as to why it needs more money. Second, we must genuinely commit to acquiring the capabilities that will best enable us to achieve the goals we have set for our defence force. This may mean some politically unpopular decisions need to be made. So be it. Our politicians are not elected to compete with each other over who can give the most money to the states. In an environment of genuine threats to Australia's safety, we must be ruthless in culling projects that are not meeting our needs. This change in approach should enable us to be far more agile in our defence planning. At the moment, because we are beholden to state government interests, we are committing to defence expenditure decades in advance that may or may not be wasted by the time it is spent. It is clear there has been a significant change in global attitudes to defence and, in particular, defence spending. This is an opportunity for Australia to start taking the issue of defence more seriously. However, throwing tens of billions more dollars at the existing system would be a terrible way to do that. The United States is again putting a full-court press on Western nations to boost defence spending. There were reports this week that NATO members are expected to raise defence spending until they spend 5 per cent of GDP on defence. This would include almost doubling spending on defence platforms and assets (from 2 per cent of GDP to 3.5 per cent of GDP) and committing a further 1.5 per cent of GDP on defence-related investments including cyber security. The Treasurer pushed back, saying Australia had already taken significant steps by boosting spending to 2.3 per cent of GDP. He is right to rebuff this target, but not because Labor's defence spending commitment is sufficient for the job. The better reason to reject arbitrary spending levels for defence against GDP is that they tell you almost nothing about the defence capabilities Australia has - or the appropriateness of our defence spending arrangements. In truth, if Australia was to expand its defence spending but continue to spend it in the same way, there is little guarantee of a genuine improvement in our position. Unfortunately, the reality is that both sides of politics have allowed industry concerns and state government parochialism to dominate defence needs when it comes to procurement. There is no better example than our submarine program. Defence ministers continue to insist it is imperative for Australia to have the capability to design and manufacture submarines. This has led to us adopting risky, bespoke submarine designs, creating expensive orphan submarine classes (ones that are used by only one country). Risky procurements like orphan submarines inevitably run over time and over budget. There is also the potential for significant redesign and development costs - especially when those designing and constructing the submarines are effectively learning on the job. The terrible troubles that plagued the Collins Class for the first decade after it was commissioned were a case in point. The fact that we have made so little actual progress on the Collins replacement more than 15 years after the replacement project was first announced is further testament to that fact. Australia is now looking at a path of manufacturing nuclear submarines, an even more complex industry development task than the one we embarked on in the 1980s with the Collins. If Australia wanted to a see an actual return from investing money in industry development, we'd be better off committing to improving the US supply chain for Virginia Class submarines. At least, we'd know from the beginning that those companies can build and deliver a submarine. This is not at all guaranteed should we commit to building an entirely new sub here. Given the risks of cost and time blowouts are well known, why do governments like Australia persist with such a risky procurement strategy? The answer is simple: politics. When it comes to defence spending, there is enormous political pressure from states like South Australia and Victoria to use defence dollars to conduct industry policy. In the case of the submarines, Australia's defence needs have been running a distant second to the need to commit to spending the money in Adelaide. Instead of focusing on how to get the best value capabilities for the money being invested, or ensuring that Australia can fulfil its required defence goals, the states compete to outbid each other for federal defence dollars to be spent in their state. The point is not that Australian defence industry is incapable of producing quality defence equipment; it's that spending the money in Australia for its own sake does nothing for defence. In fact, a disturbing percentage of our defence spending amounts to little more than money laundering handouts to the state governments. In that sense, we are right to push back against NATO and the US. Our approach shouldn't be to raise defence spending, it should be to improve defence capability to meet the tasks required of us. In practice, this means two things. First, Australians need far more clarity on what our defence force is actually for. Without greater clarity on what we are hoping to achieve in the defence space, it is all but impossible for people to understand whether we are headed down the right path. In a world where there is enormous competition for every dollar of government spending, the defence establishment must be as vocal as any other interest group as to why it needs more money. Second, we must genuinely commit to acquiring the capabilities that will best enable us to achieve the goals we have set for our defence force. This may mean some politically unpopular decisions need to be made. So be it. Our politicians are not elected to compete with each other over who can give the most money to the states. In an environment of genuine threats to Australia's safety, we must be ruthless in culling projects that are not meeting our needs. This change in approach should enable us to be far more agile in our defence planning. At the moment, because we are beholden to state government interests, we are committing to defence expenditure decades in advance that may or may not be wasted by the time it is spent. It is clear there has been a significant change in global attitudes to defence and, in particular, defence spending. This is an opportunity for Australia to start taking the issue of defence more seriously. However, throwing tens of billions more dollars at the existing system would be a terrible way to do that.
The Advertiser
an hour ago
- The Advertiser
Australia to feel US squeeze for more defence cash
The US will continue to put pressure on Australia to boost its defence spending after a pledge from European leaders, a former ambassador says. NATO member nations have agreed to spend five per cent of their economic output on defence, and security more broadly, following demands by US President Donald Trump. The US has called on Australia to massively increase the defence budget by tens of billions of dollars to 3.5 per cent of gross domestic product. But Anthony Albanese is standing firm and has maintained Australia will decide its spending. Former ambassador to the US Arthur Sinodinos said the best strategy for Australia was to engage with the US on extra capabilities that would best complement the two countries' aims for the Indo-Pacific. "The pressure from the US for allies and partners in the Indo-Pacific to increase defence spending will continue, particularly in the light of commitments made at the recent NATO summit," he told AAP. Mr Albanese is trying to secure his first face-to-face meeting with Mr Trump, after planned talks on the sidelines of the G7 summit earlier in June were cancelled due to the escalating conflict between Israel and Iran. Analyst Andrew Carr said the federal government was very aware the Trump administration represented a more "vindictive" ally in Washington. "Access to Australian facilities has often been to the Americans far more important than Australia's own military capabilities," he said. "If we're being seen to kind of 'play ball' on a whole range of political intelligence, basing and other areas, then the spending is going to be a small part of that story." The Pentagon's 30-day review of its nuclear submarine deal with Australia under the AUKUS partnership is under way. Mr Sinodinos said there was strong support for the security pact within the state department and Congress. Defence analysts believe Mr Trump is unlikely to scrap the $368 billion submarine program altogether but might demand a bigger contribution from Australia for the US submarine industrial base. Australia has already made a first $800 million down-payment of a total $4.7 billion for its plan to acquire nuclear-powered submarines. The US will continue to put pressure on Australia to boost its defence spending after a pledge from European leaders, a former ambassador says. NATO member nations have agreed to spend five per cent of their economic output on defence, and security more broadly, following demands by US President Donald Trump. The US has called on Australia to massively increase the defence budget by tens of billions of dollars to 3.5 per cent of gross domestic product. But Anthony Albanese is standing firm and has maintained Australia will decide its spending. Former ambassador to the US Arthur Sinodinos said the best strategy for Australia was to engage with the US on extra capabilities that would best complement the two countries' aims for the Indo-Pacific. "The pressure from the US for allies and partners in the Indo-Pacific to increase defence spending will continue, particularly in the light of commitments made at the recent NATO summit," he told AAP. Mr Albanese is trying to secure his first face-to-face meeting with Mr Trump, after planned talks on the sidelines of the G7 summit earlier in June were cancelled due to the escalating conflict between Israel and Iran. Analyst Andrew Carr said the federal government was very aware the Trump administration represented a more "vindictive" ally in Washington. "Access to Australian facilities has often been to the Americans far more important than Australia's own military capabilities," he said. "If we're being seen to kind of 'play ball' on a whole range of political intelligence, basing and other areas, then the spending is going to be a small part of that story." The Pentagon's 30-day review of its nuclear submarine deal with Australia under the AUKUS partnership is under way. Mr Sinodinos said there was strong support for the security pact within the state department and Congress. Defence analysts believe Mr Trump is unlikely to scrap the $368 billion submarine program altogether but might demand a bigger contribution from Australia for the US submarine industrial base. Australia has already made a first $800 million down-payment of a total $4.7 billion for its plan to acquire nuclear-powered submarines. The US will continue to put pressure on Australia to boost its defence spending after a pledge from European leaders, a former ambassador says. NATO member nations have agreed to spend five per cent of their economic output on defence, and security more broadly, following demands by US President Donald Trump. The US has called on Australia to massively increase the defence budget by tens of billions of dollars to 3.5 per cent of gross domestic product. But Anthony Albanese is standing firm and has maintained Australia will decide its spending. Former ambassador to the US Arthur Sinodinos said the best strategy for Australia was to engage with the US on extra capabilities that would best complement the two countries' aims for the Indo-Pacific. "The pressure from the US for allies and partners in the Indo-Pacific to increase defence spending will continue, particularly in the light of commitments made at the recent NATO summit," he told AAP. Mr Albanese is trying to secure his first face-to-face meeting with Mr Trump, after planned talks on the sidelines of the G7 summit earlier in June were cancelled due to the escalating conflict between Israel and Iran. Analyst Andrew Carr said the federal government was very aware the Trump administration represented a more "vindictive" ally in Washington. "Access to Australian facilities has often been to the Americans far more important than Australia's own military capabilities," he said. "If we're being seen to kind of 'play ball' on a whole range of political intelligence, basing and other areas, then the spending is going to be a small part of that story." The Pentagon's 30-day review of its nuclear submarine deal with Australia under the AUKUS partnership is under way. Mr Sinodinos said there was strong support for the security pact within the state department and Congress. Defence analysts believe Mr Trump is unlikely to scrap the $368 billion submarine program altogether but might demand a bigger contribution from Australia for the US submarine industrial base. Australia has already made a first $800 million down-payment of a total $4.7 billion for its plan to acquire nuclear-powered submarines. The US will continue to put pressure on Australia to boost its defence spending after a pledge from European leaders, a former ambassador says. NATO member nations have agreed to spend five per cent of their economic output on defence, and security more broadly, following demands by US President Donald Trump. The US has called on Australia to massively increase the defence budget by tens of billions of dollars to 3.5 per cent of gross domestic product. But Anthony Albanese is standing firm and has maintained Australia will decide its spending. Former ambassador to the US Arthur Sinodinos said the best strategy for Australia was to engage with the US on extra capabilities that would best complement the two countries' aims for the Indo-Pacific. "The pressure from the US for allies and partners in the Indo-Pacific to increase defence spending will continue, particularly in the light of commitments made at the recent NATO summit," he told AAP. Mr Albanese is trying to secure his first face-to-face meeting with Mr Trump, after planned talks on the sidelines of the G7 summit earlier in June were cancelled due to the escalating conflict between Israel and Iran. Analyst Andrew Carr said the federal government was very aware the Trump administration represented a more "vindictive" ally in Washington. "Access to Australian facilities has often been to the Americans far more important than Australia's own military capabilities," he said. "If we're being seen to kind of 'play ball' on a whole range of political intelligence, basing and other areas, then the spending is going to be a small part of that story." The Pentagon's 30-day review of its nuclear submarine deal with Australia under the AUKUS partnership is under way. Mr Sinodinos said there was strong support for the security pact within the state department and Congress. Defence analysts believe Mr Trump is unlikely to scrap the $368 billion submarine program altogether but might demand a bigger contribution from Australia for the US submarine industrial base. Australia has already made a first $800 million down-payment of a total $4.7 billion for its plan to acquire nuclear-powered submarines.
The Advertiser
an hour ago
- The Advertiser
US trade deals may be wrapped up by September: Bessent
Trade deals between US President Donald Trump's administration and other countries could be done by the September 1 Labor Day holiday, US Treasury Secretary Scott Bessent says. Bessent on Friday cited talks with 18 main United States trading partners and new revisions to a deal with China aimed at expediting rare earths shipments. The United States sent a new proposal to the European Union on Thursday and India sent a delegation to Washington DC for more talks. "So we have countries approaching us with very good deals," Bessent said on Fox Business Network. "We have 18 important trading partners. ... If we can ink 10 or 12 of the important 18, there are another important 20 relationships, then I think we could have trade wrapped up by Labor Day," Bessent said. He did not mention any changes to a July 9 deadline for countries to reach deals with the United States or have tariffs spike higher, but has previously said that countries negotiating in good faith could get deals. Trump told reporters at the White House on Friday that he could extend the tariff deadline or "make it shorter," adding that within the next week and a half, he would notify countries of their tariff rates. "I'd like to just send letters out to everybody: Congratulations. You're paying 25 per cent" tariffs, Trump said in an apparent joke. Bessent said the United States and China had resolved issues surrounding shipments of Chinese rare earth minerals and magnets to the US, further modifying a deal reached in May in Geneva. As part of its retaliation against new US tariffs, China suspended exports of a wide range of critical minerals and magnets, upending supply chains central to car makers, aerospace manufacturers, semiconductor companies and military contractors around the world. During US-China talks in May in Geneva, China committed to removing the measures imposed since April 2 but those critical materials were not moving as fast as agreed, Bessent said, so the US put countermeasures in place. "I am confident now that we - as agreed, the magnets will flow," Bessent said, adding that these materials would go to US firms that had received them previously on a regular basis. He did not disclose details of the latest agreement, which Trump administration officials said was reached earlier this week. Efforts to resolve the dispute included a phone call between Trump and Chinese President Xi Jinping which led to teams from both sides meeting again in London, as negotiators try to end a trade war between the world's biggest economies. China's commerce ministry said on Friday the two countries have confirmed details on the framework of implementing the Geneva trade talks consensus. It said China will approve export applications of controlled items in accordance with the law. It did not mention rare earths. China has dual-use restrictions in place on rare earths which it takes "very seriously" and has been vetting buyers to ensure that materials are not diverted for US military uses, according to an industry source. This has slowed down the licensing process. Indian government sources told Reuters that a trade delegation from New Delhi was back in Washington DC on Friday aiming to sew up a limited US trade deal ahead of the July 9 deadline. Trump administration officials frequently count India among countries with which trade talks are at an advanced stage, along with Japan. But early optimism about a simple deal to reduce India's high tariffs has hit roadblocks over disagreements on US import duties for car parts, steel and farm goods, Indian officials with direct knowledge said. Trump said that his administration was looking to get a "full trade barrier dropping" deal with India. "I'm not sure that that's going to happen but as of this moment, we've agreed to that - go into India and trade," Trump said. Trade deals between US President Donald Trump's administration and other countries could be done by the September 1 Labor Day holiday, US Treasury Secretary Scott Bessent says. Bessent on Friday cited talks with 18 main United States trading partners and new revisions to a deal with China aimed at expediting rare earths shipments. The United States sent a new proposal to the European Union on Thursday and India sent a delegation to Washington DC for more talks. "So we have countries approaching us with very good deals," Bessent said on Fox Business Network. "We have 18 important trading partners. ... If we can ink 10 or 12 of the important 18, there are another important 20 relationships, then I think we could have trade wrapped up by Labor Day," Bessent said. He did not mention any changes to a July 9 deadline for countries to reach deals with the United States or have tariffs spike higher, but has previously said that countries negotiating in good faith could get deals. Trump told reporters at the White House on Friday that he could extend the tariff deadline or "make it shorter," adding that within the next week and a half, he would notify countries of their tariff rates. "I'd like to just send letters out to everybody: Congratulations. You're paying 25 per cent" tariffs, Trump said in an apparent joke. Bessent said the United States and China had resolved issues surrounding shipments of Chinese rare earth minerals and magnets to the US, further modifying a deal reached in May in Geneva. As part of its retaliation against new US tariffs, China suspended exports of a wide range of critical minerals and magnets, upending supply chains central to car makers, aerospace manufacturers, semiconductor companies and military contractors around the world. During US-China talks in May in Geneva, China committed to removing the measures imposed since April 2 but those critical materials were not moving as fast as agreed, Bessent said, so the US put countermeasures in place. "I am confident now that we - as agreed, the magnets will flow," Bessent said, adding that these materials would go to US firms that had received them previously on a regular basis. He did not disclose details of the latest agreement, which Trump administration officials said was reached earlier this week. Efforts to resolve the dispute included a phone call between Trump and Chinese President Xi Jinping which led to teams from both sides meeting again in London, as negotiators try to end a trade war between the world's biggest economies. China's commerce ministry said on Friday the two countries have confirmed details on the framework of implementing the Geneva trade talks consensus. It said China will approve export applications of controlled items in accordance with the law. It did not mention rare earths. China has dual-use restrictions in place on rare earths which it takes "very seriously" and has been vetting buyers to ensure that materials are not diverted for US military uses, according to an industry source. This has slowed down the licensing process. Indian government sources told Reuters that a trade delegation from New Delhi was back in Washington DC on Friday aiming to sew up a limited US trade deal ahead of the July 9 deadline. Trump administration officials frequently count India among countries with which trade talks are at an advanced stage, along with Japan. But early optimism about a simple deal to reduce India's high tariffs has hit roadblocks over disagreements on US import duties for car parts, steel and farm goods, Indian officials with direct knowledge said. Trump said that his administration was looking to get a "full trade barrier dropping" deal with India. "I'm not sure that that's going to happen but as of this moment, we've agreed to that - go into India and trade," Trump said. Trade deals between US President Donald Trump's administration and other countries could be done by the September 1 Labor Day holiday, US Treasury Secretary Scott Bessent says. Bessent on Friday cited talks with 18 main United States trading partners and new revisions to a deal with China aimed at expediting rare earths shipments. The United States sent a new proposal to the European Union on Thursday and India sent a delegation to Washington DC for more talks. "So we have countries approaching us with very good deals," Bessent said on Fox Business Network. "We have 18 important trading partners. ... If we can ink 10 or 12 of the important 18, there are another important 20 relationships, then I think we could have trade wrapped up by Labor Day," Bessent said. He did not mention any changes to a July 9 deadline for countries to reach deals with the United States or have tariffs spike higher, but has previously said that countries negotiating in good faith could get deals. Trump told reporters at the White House on Friday that he could extend the tariff deadline or "make it shorter," adding that within the next week and a half, he would notify countries of their tariff rates. "I'd like to just send letters out to everybody: Congratulations. You're paying 25 per cent" tariffs, Trump said in an apparent joke. Bessent said the United States and China had resolved issues surrounding shipments of Chinese rare earth minerals and magnets to the US, further modifying a deal reached in May in Geneva. As part of its retaliation against new US tariffs, China suspended exports of a wide range of critical minerals and magnets, upending supply chains central to car makers, aerospace manufacturers, semiconductor companies and military contractors around the world. During US-China talks in May in Geneva, China committed to removing the measures imposed since April 2 but those critical materials were not moving as fast as agreed, Bessent said, so the US put countermeasures in place. "I am confident now that we - as agreed, the magnets will flow," Bessent said, adding that these materials would go to US firms that had received them previously on a regular basis. He did not disclose details of the latest agreement, which Trump administration officials said was reached earlier this week. Efforts to resolve the dispute included a phone call between Trump and Chinese President Xi Jinping which led to teams from both sides meeting again in London, as negotiators try to end a trade war between the world's biggest economies. China's commerce ministry said on Friday the two countries have confirmed details on the framework of implementing the Geneva trade talks consensus. It said China will approve export applications of controlled items in accordance with the law. It did not mention rare earths. China has dual-use restrictions in place on rare earths which it takes "very seriously" and has been vetting buyers to ensure that materials are not diverted for US military uses, according to an industry source. This has slowed down the licensing process. Indian government sources told Reuters that a trade delegation from New Delhi was back in Washington DC on Friday aiming to sew up a limited US trade deal ahead of the July 9 deadline. Trump administration officials frequently count India among countries with which trade talks are at an advanced stage, along with Japan. But early optimism about a simple deal to reduce India's high tariffs has hit roadblocks over disagreements on US import duties for car parts, steel and farm goods, Indian officials with direct knowledge said. Trump said that his administration was looking to get a "full trade barrier dropping" deal with India. "I'm not sure that that's going to happen but as of this moment, we've agreed to that - go into India and trade," Trump said. Trade deals between US President Donald Trump's administration and other countries could be done by the September 1 Labor Day holiday, US Treasury Secretary Scott Bessent says. Bessent on Friday cited talks with 18 main United States trading partners and new revisions to a deal with China aimed at expediting rare earths shipments. The United States sent a new proposal to the European Union on Thursday and India sent a delegation to Washington DC for more talks. "So we have countries approaching us with very good deals," Bessent said on Fox Business Network. "We have 18 important trading partners. ... If we can ink 10 or 12 of the important 18, there are another important 20 relationships, then I think we could have trade wrapped up by Labor Day," Bessent said. He did not mention any changes to a July 9 deadline for countries to reach deals with the United States or have tariffs spike higher, but has previously said that countries negotiating in good faith could get deals. Trump told reporters at the White House on Friday that he could extend the tariff deadline or "make it shorter," adding that within the next week and a half, he would notify countries of their tariff rates. "I'd like to just send letters out to everybody: Congratulations. You're paying 25 per cent" tariffs, Trump said in an apparent joke. Bessent said the United States and China had resolved issues surrounding shipments of Chinese rare earth minerals and magnets to the US, further modifying a deal reached in May in Geneva. As part of its retaliation against new US tariffs, China suspended exports of a wide range of critical minerals and magnets, upending supply chains central to car makers, aerospace manufacturers, semiconductor companies and military contractors around the world. During US-China talks in May in Geneva, China committed to removing the measures imposed since April 2 but those critical materials were not moving as fast as agreed, Bessent said, so the US put countermeasures in place. "I am confident now that we - as agreed, the magnets will flow," Bessent said, adding that these materials would go to US firms that had received them previously on a regular basis. He did not disclose details of the latest agreement, which Trump administration officials said was reached earlier this week. Efforts to resolve the dispute included a phone call between Trump and Chinese President Xi Jinping which led to teams from both sides meeting again in London, as negotiators try to end a trade war between the world's biggest economies. China's commerce ministry said on Friday the two countries have confirmed details on the framework of implementing the Geneva trade talks consensus. It said China will approve export applications of controlled items in accordance with the law. It did not mention rare earths. China has dual-use restrictions in place on rare earths which it takes "very seriously" and has been vetting buyers to ensure that materials are not diverted for US military uses, according to an industry source. This has slowed down the licensing process. Indian government sources told Reuters that a trade delegation from New Delhi was back in Washington DC on Friday aiming to sew up a limited US trade deal ahead of the July 9 deadline. Trump administration officials frequently count India among countries with which trade talks are at an advanced stage, along with Japan. But early optimism about a simple deal to reduce India's high tariffs has hit roadblocks over disagreements on US import duties for car parts, steel and farm goods, Indian officials with direct knowledge said. Trump said that his administration was looking to get a "full trade barrier dropping" deal with India. "I'm not sure that that's going to happen but as of this moment, we've agreed to that - go into India and trade," Trump said.
