21 October 2025

Interview with Patricia Karvelas, Afternoon Briefing, ABC

Note

Subjects: critical minerals framework, tariffs, trade

Patricia Karvelas:

Treasurer, welcome to the program.

Jim Chalmers:

Thanks very much, Patricia.

Karvelas:

Did you expect the meeting with Donald Trump to go as well as it did?

Chalmers:

I hoped it would, and it’s been an outstanding success. I think by any measure, the progress that was made today between Prime Minister Albanese and President Trump represents a very good set of outcomes for Australia. A very, very successful meeting. And important progress made in a number of areas, including when it comes to this golden opportunity for Australia, which is rare earths and critical minerals.

Karvelas:

Okay, but you must have been a bit nervous ahead of this meeting. It obviously took a direction. It was a lucky day for Australia, right?

Chalmers:

I don’t see it that way. I mean, I’ve seen the work that goes into these meetings. The preparation at the Australian end, and I was able to spend some time with Ambassador Rudd in Washington, D.C. a couple of times last week as well. A lot of effort goes into these meetings from both sides. Australia did a lot of work to put our best foot forward in these really important discussions, and we’re really pleased to see the progress that was made. It was, by any measure, as I said, an outstanding meeting for Australia. And it means that we can go forward in a number of important areas, economic areas as well as national security.

Karvelas:

On Kevin Rudd, he was the one disruptor in the meeting, that was rather uncomfortable. Did he end up playing a negative role – at least in that meeting – by drawing negative attention from Donald Trump?

Chalmers:

I don’t think so. I think Kevin handled it really well, actually. And I don’t think anyone who has seen the extraordinary amount of work that Kevin has put into this meeting and to our engagement with the US and the administration more broadly, would conclude anything other than he has been a really important force for good for Australia in Washington, D.C.. I’ve seen it for myself. I work closely with him on the economic partnership. As I said, I spent time with him last week in Washington, D.C.. The government is really grateful for his work, and I personally think that we are very fortunate to have him there.

Karvelas:

I want to talk about some other issues. The US and Australian Governments intend to invest more than $3 billion in critical mineral projects in the next 6 months. I think recoverable resources in the projects are estimated to be $53 billion. Do we have any early forecasts on the budget impact?

Chalmers:

First of all, on the new framework that was agreed, it’s a very good outcome for Australia. This is all about ensuring that Australia can be a reliable supplier of rare earths and critical minerals. It’s about strengthening the economic partnership with the US, it’s about bolstering supply chains and it’s about making sure that Australia becomes a world leader in an industry which will become more and more important to the modern economy – whether it’s technology, defence industries and in other important areas as well.

When it comes to the budget treatment, we will reallocate unallocated funding from the Strategic Reserve, from the Critical Minerals Facility, from the National Reconstruction Fund, to make sure that we do this in the most responsible way that we can. But this is a really important investment. This is an investment which recognises the golden opportunity for Australia in critical minerals. It recognises that the world desperately wants what Australia can offer. And this is a really important part of the progress that was made today. These co‑investments are important, but the framework more broadly, really important as well –

Karvelas:

– but, Jim Chalmers –

Chalmers:

– it really does help position Australia as a world leader in critical minerals.

Karvelas:

It’s not legally binding or enforceable, though?

Chalmers:

It’s an important framework. I mean, it will deliver tangible results for our workers, our businesses, our communities, our mining communities in particular – whether it comes to mining or refining and processing. So, whatever legal status you want to apply to it, it is an extremely good outcome for Australia, for its people, for our economy. This is an area where we have extraordinary advantages, and we intend to maximise those advantages. And the framework today which was agreed between the Prime Minister and the President, should be seen in that light.

Karvelas:

Will buyers want what Australia’s rare earth firms offer when we know China is just cheaper?

Chalmers:

A couple of important things about that. I mean, the market for rare earths and critical minerals is not operating as effectively as a lot of countries, a lot of economies would like it to. That’s been a central feature of discussions that I’ve been having with colleagues and counterparts over the last couple of years. And so, Australia as a big supplier, big reliable supplier into these supply chains for critical minerals, has a role to play to make sure that we’re improving the market as well as supplying the market.

And we will continue to engage in good faith with all of our trading partners around the world. As I said before, we have exactly what the world needs when the world wants it, and critical minerals and rare earths are an important part of that offering. We need the market to operate as effectively as it can and we’re playing a role in ensuring that.

Karvelas:

Are you concerned that the US critical minerals deal will see China retaliate against Australia for, or Australian businesses, our miners, for instance?

Chalmers:

No, I don’t believe so. And I say the same thing about the Chinese relationship that I said in Washington, D.C. about the US relationship. I think both of those countries understand that Australia engages in good faith with our trading partners, whether they be in Beijing or whether they be in Washington, D.C.. We do that in good faith. We do that consistent with Australia’s national economic interest, and that will continue to be the case.

Karvelas:

We didn’t get a tariff deal today, the UK got a tariff deal. Is that a failure?

Chalmers:

I don’t believe so. I mean, Australia’s tariff arrangements with the US are the most accommodating of any country in the world. But we’ve made it clear that Australia’s economic interests are best served by more trade, not by more tariffs or more trade barriers. We’ve made our view very clear for some time. We’ve been able to make progress on a number of other important fronts today in this meeting, which was outstanding from our point of view, certainly from an economic point of view, but also in national security terms.

Karvelas:

Now, you’re a Treasurer. Treasurers, you know, are reluctant to spend more are always looking at budgets. What do you make, then of Donald Trump’s comments about our level of defence spending?

Chalmers:

First of all, I’d say that we’re spending substantially more on defence. I think that’s recognised. And when you measure our defence spending the same way that other parts of the world do, it is quite substantial, the increase is quite substantial. I thought the comments that President Trump made were accommodating when it comes to Australia’s position.

Now, as Treasurer, and Katy Gallagher would tell you the same thing as Finance Minister, we’re always looking for value for money. We’re enthusiastic about lifting our defence spending. We want to make sure that we get maximum value for that. That’s not unusual. But we’re investing, I think, increasing defence spending by more than at any other time during peace time in Australia –

Karvelas:

– So, is this something you’ll use in the Australia domestic debate then –

Chalmers:

– I think that’s understood in other parts of the world.

Karvelas:

Will you be able to say, hey, Donald Trump doesn’t, you know, isn’t suggesting we spend more, it’s all good?

Chalmers:

We’re capable of making our own case and we’ve been making our case consistently for some time now. Australia’s defence spending is going up. It is higher than what we inherited from our predecessors. There are good reasons for that. Our responsibility is to get maximum value for money, and we are able to make that case whether or not President Trump made those positive comments today.

Karvelas:

Just a final question. You’re in Korea for the APEC Summit. There’s a minor trade war obviously bubbling between China and the United States. How are economic ministers around the world at this summit viewing all of this?

Chalmers:

The region sees these trade tensions as casting a shadow over growth and casting a shadow over the global economy. The global economy is defined by risk and uncertainty. And trade tensions are part of the story. I said earlier, and I meant when I said that Australia’s interests are best served by more trade, not by more trade barriers. That’s true of the region as well.

And the economies represented around this big APEC table here in Incheon in South Korea, I think everybody’s focused on the economic impact of these tariffs, particularly when it comes to the escalating tensions between the US and China. Australia’s direct exposure is relatively limited. But like everyone here, we are concerned about the broader impacts, and that’s been part of the discussion here.

Karvelas:

Treasurer, thanks for joining us.

Chalmers:

Thanks so much, Patricia.