Retracing the steps of Gough Whitlam atop the Great Wall of China, Anthony Albanese brushed off Chinese concerns about unfair business practices.

The prime minister pitched himself as continuing the work of his famous Labor forebear to “build stability and security in the region” through engagement.  

Just a day earlier, Mr Albanese and Chinese Premier Li Qiang signed a series of agreements to boost business links as US President Donald Trump upends the global trade order.

Australia and China must deepen economic co-operation given increasing trade frictions elsewhere, Mr Li said after a lavish welcome in Beijing’s Great Hall of the People. 

“In recent years, co-operation has encountered headwinds,” he said, adding that it was hard to find two countries with more complementary economies than Australia and China.

But despite the positive dialogue and warm welcome the prime minister has received on his six-day visit, he can’t deny the fundamental differences in the relationship. 

China has chafed at Australia’s stringent foreign investment regime on Chinese firms. 

Mr Li said China would protect the rights of foreign businesses and treat them in accordance with the law, in an oblique reference to Australian plans to tear up a Chinese-owned company’s lease of Darwin Port. 

“I trust Australia will treat Chinese enterprise fairly and properly resolve issues regarding market access and investment review,” he told a gathering of Australian and Chinese business leaders.

Mr Albanese said restrictions weren’t targeted at China specifically but were an agnostic effort to protect Australia’s national interests. 

“We have a case-by-case issue when it comes to foreign investment,” he told reporters at the Wall on Wednesday. 

“It is viewed not on the basis of any one country, but on the basis of an objective assessment of our national interest.”

One issue raised by Chinese business leaders was a concern about existing LNG contracts that could be impacted, for instance, if Australia were to unilaterally change the market through a gas reserve. 

“We don’t interfere with those sovereign issues when it comes to gas, whether it be for China, for Japan or for the Republic of Korea,” Mr Albanese said. 

The prime minister next flies out to the southwestern capital of Chengdu, where he will spruik Australia’s sporting ties with China and meet some pandas. 

US President Donald Trump says the United States will impose a 19 per cent tariff on goods from Indonesia under a new agreement with the Southeast Asian country.

He said more deals were in the works as he continued to press for what he views as better terms with trading partners and a path to reducing a massive US trade deficit.

The pact with the relatively minor US trading partner is among the handful struck so far by Trump’s administration ahead of an August 1 deadline for tariffs on most US imports to rise again, and it came as the top US trading partner – the European Union – readied retaliatory measures should talks between US and its top trading partner fail.

As that deadline approaches, talks were underway with other trading partners eager to avoid yet more levies being imposed on their exports to the US beyond a baseline 10 per cent on most goods that has been in place since April.

It is a policy regime – rolled out often chaotically by Trump – that has upended decades of trends toward lower trade barriers, often roiling global financial markets and economic activity along the way.

Based on Trump tariff announcements through July 13, Yale Budget Lab estimates the US effective average tariff rates will rise to 20.6 per cent from between two per cent and three per cent before Trump’s return to the White House in January.

Trump outlined an Indonesia deal that had rough contours resembling a pact struck recently with Vietnam, with a flat tariff on exports to the US roughly double the current 10 per cent and no levies placed on US exports going there.

It also included a penalty rate for so-called transhipments of goods from China via Indonesia, and a commitment to buy some US goods.

“They are going to pay 19 per cent and we are going to pay nothing … we will have full access into Indonesia, and we have a couple of those deals that are going to be announced,” Trump said outside the Oval Office.

In addition, Trump said later on his Truth Social platform that Indonesia had agreed to buy $US15 billion ($A23 billion) of US energy products, $US4.5 billion of farm products and 50 Boeing jets although no time frame for the purchases was specified.

Indonesia’s total trade with the US – totalling just under $US40 billion in 2024 – does not rank in the top 15 but it has been growing.

US exports to Indonesia rose 3.7 per cent last year while imports from there were up 4.8 per cent, leaving the US with a goods trade deficit of nearly $US18 billion.

Susiwijono Moegiarso, a senior official with Indonesia’s Coordinating Ministry for Economic Affairs, told Reuters in a text message: “We are preparing a joint statement between US and Indonesia that will explain the size of reciprocal tariff for Indonesia including the tariff deal, non-tariff and commercial arrangements. We will inform (the public) soon.”

Trump had threatened the country with a 32 per cent tariff rate effective August 1 in a letter sent to its president last week.

He sent similar letters to about two dozen trading partners this month, including Canada, Japan and Brazil, setting blanket tariff rates ranging from 20 per cent up to 50 per cent, as well as a 50 per cent tariff on copper.

The August 1 deadline gives the targeted countries time to negotiate agreements that could lower the threatened tariffs.

The US president also said he will “probably” announce tariffs on pharmaceutical drugs.

Trump told reporters such an announcement could come at the “end of the month.”

Trump said he would start out at a lower tariff rate and give companies a year to build domestic factories before they face higher import tax rates.

“… there are two ways you do it. You make money, or you have them move here so they don’t have to pay the tariff. Those are the two ways.

“The pharmaceutical companies are moving back to America, where they should be.”

Earlier this month the US president laid out plans to impose 200 per cent tariffs on drug imports, threatening Australia’s third-most significant export.

with AP

In the face of extreme uncertainty, collaboration will be top of mind as the treasurer prepares to meet with leaders from some of the world’s most important economies.

Days before the first parliamentary sitting week of Labor’s second term, Treasurer Jim Chalmers is set to head to Durban in South Africa for a gathering of finance ministers and central bank governors from G20 countries.

As conflict in the Middle East, Eastern Europe and the threat of US tariffs continue to shake global markets, Dr Chalmers said there has never been a more important time to collaborate, noting the international economic environment would shape domestic policy.

“We are navigating a world where volatility, uncertainty and unpredictability are now the norm, not the exception,” he said.

“Subdued global growth, extreme uncertainty and fragmentation demands more engagement, more collaboration and more resilience and that’s what guides our strategy.”

He has also stressed the importance of free and open markets, and will prioritise strengthening ties and bolstering supply chains in his meetings.

Australia has not yet received a tariff letter from the US president, but Donald Trump has imposed a baseline 10 per cent tariff on most of its goods and a 50 per cent levy on steel and aluminium.

The federal government has floated using critical minerals as a bargaining chip to try to carve out a tariff exemption and Dr Chalmers confirmed he would discuss the resource with other countries’ leaders at the event.

He is also expected to meet with his counterparts from Japan, Indonesia, Canada, the UK, South Africa and Germany, many of which will have a higher tariff rate imposed on their goods from August 1.

“The Australian economy is not immune from global uncertainty but we are well-placed and well-prepared to face the challenges ahead,” Dr Chalmers said.

All of this would form the backdrop to Labor’s second-term economic agenda, which includes ambitious goals to boost flagging productivity.

The coalition has signalled a willingness to work with Labor on productivity, but specifically through cuts to red tape and regulation, Liberal senator Jane Hume said.

Parliament will resume on Tuesday.

New homes picked from pre-approved designs could be ticked off for construction in 10 days in another bid to accelerate house building in Australia’s most expensive market.

In what the the NSW government has called its “pattern book” of low-rise designs, eight terrace, townhouse and manor house plans are available and will be heavily subsidised to encourage market activity.

It will give people that have been locked out of housing due to rising costs and a planning system that made it too difficult to build homes the chance to live in communities, the government said.

Premier Chris Minns has previously declared war on red tape and blamed a sluggish planning system for his state’s poor progress on nationally-agreed housing targets.

NSW is committed to building 377,000 new homes by July 2029 but data has consistently shown it is on track to fall well short.

Master Builders Australia data released in 2024 found the state would come closer to building 300,000 in that timeframe.

“For too long, too many people in NSW have been locked out of the housing market by rising costs and a system that made it too hard to build – we’re changing that,” the premier said.

“This Pattern Book is about giving people more choice, faster approvals, and affordable, high-quality homes – whether you’re a young person trying to get in, a family needing more space, or a downsizer looking to stay close to the community you know.”

Planning Minister Paul Scully said the pattern book took the guesswork and delay out of home building, with the pre-approved designs “cost-effective” and “high-quality”.

The designs will be available for $1000, but heavy government subsidies mean they will cost just $1 per pattern for the first six months.

The government estimated the designs would typically cost upwards of $20,000 if developed through an architect.Committee for Sydney planning policy manager Estelle Grech said the plans were proof density can be “both beautiful and attainable”.

“It isn’t an abstract rezoning. It’s practical, design-led guidance that shows how you can get more bang from your block, build beautiful homes and help solve Sydney’s housing crisis,” she said.

“While these designs may not appear everywhere overnight and are more likely to be a slow burn, they set a strong benchmark for what’s possible when it comes to low-rise development.”

A NSW Productivity and Equality Commission report released in 2024 made several recommendations to boost housing supply, including zoning well-located areas for higher density and cutting apartment design requirements.

One of the government’s signature planning policies involves the blanket rezoning of land around metro stations and existing transport hubs for higher-density housing.

German Chancellor Friedrich Merz has urged the European Union to suspend implementation of a global minimum corporate tax, arguing the plan is no longer viable without US participation.

Speaking after a meeting atop the Zugspitze, Germany’s highest peak, Merz said continuing with the 15 per cent minimum tax in Europe would put the continent’s economy at a disadvantage.

“The Americans have withdrawn, and this concept no longer has a future,” Merz said, adding that the German government would now take up the issue.

The 15 per cent minimum tax is part of a global corporate tax reform endorsed by around 140 countries after years of talks. The aim is to ensure big companies pay a fairer share of tax.

The tax, which is at various stages of implementation depending on the country, hits multinational companies with annual revenues over $US871 million ($A1.3 billion), regardless of where their profits are generated.

The policy’s future was thrown into doubt after President Donald Trump declared it unenforceable in the United States.

Washington has argued the global agreement infringes on its fiscal sovereignty.

A recent G7 compromise allows US companies to be exempt from the global minimum tax as long as they remain subject to a domestic US tax regime.

Canada, which holds the G7 presidency, said the deal still represents progress in the fight against profit shifting and tax avoidance.

Inflation rose last month to its highest level since February as economists blamed US President Donald Trump’s tariffs for pushing up the cost of items such as groceries, clothes and furniture.

Consumer prices rose 2.7 per cent in June from a year earlier, the US Labor Department said on Tuesday, up from an annual increase of 2.4 per cent in May.

On a monthly basis, prices climbed 0.3 per cent from May to June, after rising just 0.1 per cent the previous month.

Worsening inflation poses a political challenge for Trump, who as a candidate promised to immediately lower costs but instead has engaged in a whipsawed frenzy of tariffs that have jolted businesses and consumers.

Trump insists that the US effectively has no inflation as he has attempted to pressure Federal Reserve chair Jerome Powell into cutting short-term interest rates.

Yet the new inflation numbers make it more likely that the US central bank will leave rates where they are.

Powell has said that he wants to gauge the economic impact of tariffs before reducing borrowing costs.

Excluding volatile food and energy, core inflation increased 2.9 per cent in June from a year earlier, up from 2.8 per cent in May.

On a monthly basis, it picked up 0.2 per cent from May to June.

Economists closely watch core prices because they typically provide a better sense of where inflation is headed.

The uptick in inflation was driven by a range of higher prices.

The cost of petrol rose 1 per cent just from May to June while grocery prices increased 0.3 per cent.

Appliance prices jumped for the third straight month.

Toys, clothes, audio equipment, shoes and sporting goods all got more expensive, and are all heavily imported.

“You are starting to see scattered bits of the tariff inflation regime filter in,” Eric Winograd, chief economist at asset management firm AllianceBernstein, said.

Winograd also noted that housing costs, a big inflation driver since the pandemic, have continued to cool, actually holding down broader inflation.

The cost of rent rose 3.8 per cent in June compared with a year ago, the smallest yearly increase since late 2021.

“Were it not for the tariff uncertainty, the Fed would already be cutting rates,” Winograd said.

“The question is whether there is more to come, and the Fed clearly thinks there is,” along with most economists.

Some items got cheaper last month, including new and used cars, hotel rooms and airfares.

French Prime Minister Francois Bayrou has proposed scrapping two public holidays and freezing most public spending as part of a budget squeeze.

Bayrou’s plan involves freezing welfare spending and tax brackets in 2026 at 2025 levels, not even adjusting for inflation, which was immediately criticised by opposition MPs. 

Defence spending, however, will increase.

France’s budget deficit hit 5.8 per cent of gross domestic product last year, nearly double the official European Union limit of 3 per cent of GDP, as a political crisis left four successive governments paralysed and incapable of tackling an unexpected drop in tax income and surge in spending for a second year.

“Everyone will have to contribute to the effort,” Bayrou said, warning that public debt was a “mortal danger” for France and needed to be tackled head on.

The welfare spending freeze will likely be as unpopular for many voters as scrapping two public holidays – possibly Easter Monday and May 8, which commemorates the end of World War II in Europe.

There are simply too many public holidays in May and the French must get back to work that month, Bayrou said, adding that this would mean billions in additional revenues for the state as everybody will work more and produce more.

Bayrou’s proposals are “massively unfair,” Socialist politician Johanna Rolland, the mayor of Nantes, said on X.

Bayrou, a veteran centrist politician, must persuade the opposition ranks in France’s fractured parliament to at least tolerate his cuts, or risk facing a no-confidence motion like the one that toppled his predecessor in December over the 2025 budget.

Any risk of a no-confidence motion would likely only firm up once a detailed budget bill goes to parliament in October.

President Emmanuel Macron has left Bayrou the task of repairing the public finances with the 2026 budget, after his own move to call a snap legislative election last year delivered a hung parliament too divided to tackle the country’s spiralling spending.

If he fails, a new political crisis could trigger more credit ratings’ downgrades and drive up the cost of interest payments, which are already set to become the single biggest drain on the budget at more than 60 billion euros ($A107 billion).

Bayrou aims to reduce the budget deficit from 5.4 per cent of GDP this year to 4.6 per cent in 2026, ultimately targeting the EU’s 3 per cent fiscal deficit limit by 2029.

“It’s the last stop before the cliff, before we are crushed by the debt,” Bayrou said on Tuesday.

A rise in construction costs is likely to stoke inflation while pushing home-building targets further out of reach, fresh data analysis suggests.

Construction costs rose 0.5 per cent in the June quarter, picking up slightly from a 0.4 per cent rise in the March quarter, according to property analyst Cotality’s latest Cordell Construction Cost Index.

The re-acceleration is likely to weigh on inflation outcomes because the cost of new dwellings comprises the largest weight in the consumer price index, Cotality research director Tim Lawless said.

While noting the increase was half the pre-pandemic decade average of one per cent, Mr Lawless said builders struggle with feasibility assessments amid high material and labour costs.

“With the cost of building a new home continuing to rise, the (government’s) stretch target of building 1.2 million new homes by July 2029 is looking harder and harder,” he said.

Property Council of Australia policy and advocacy executive Matthew Kandelaars said the uptick in construction costs “chips away at the feasibility of new housing projects” when the nation needs to be accelerating towards the target of 1.2 million new homes.

Better investment and tax settings are needed, Mr Kandelaars said, along with smarter and more efficient approvals and more skilled workers to build the homes.

“Without this balance, we’ll remain stuck in a doom-loop of low margins, constrained project feasibility, cost blowouts and delivery delays.”

Independent government advice body the National Housing Supply and Affordability Council warned the federal government in a May report that it would fall short of its 2029 goal by about 300,000 dwellings.

Western Australia recorded the largest quarterly increase in construction costs in the three months to June at 0.7 per cent, followed by Victoria (0.6 per cent), NSW and South Australia (0.5 per cent) and Queensland (0.4 per cent).

Cotality said the latest data reinforces commentary from the Reserve Bank in its July 8 decision to maintain the cash rate at 3.85 per cent, which highlighted as a concern the re-acceleration of growth in the cost of new dwellings via the monthly CPI indicator.

In her rates commentary, the central bank’s governor Michele Bullock noted certain components of monthly inflation – particularly home-building costs – had been “slightly stronger than expected”, which contributed to the decision to hold rates. 

The RBA added that high construction expenses continue to exert upward pressure on inflation, reinforcing its cautious stance.

Competition for skilled trades also remains intense amid a record level of public infrastructure spending, with Infrastructure Australia forecasting a mismatch between the demand and supply of labour until mid-2028.

This means continued inflation pressure is likely from building costs centred on the labour market, Mr Lawless said.

Australia will miss many of its most important goals unless its environment laws undergo a long-overdue transformation, an economic heavyweight has warned.

Ken Henry – a former Treasury secretary, NAB chairman and prime ministerial adviser – has urged Australia to overhaul its main environment act as the Labor government pursues a litany of economic reforms.

Its plans to build 1.2 million houses by 2029, boost renewable energy, and develop the critical minerals industry have taken attention away from the languishing Environment Protection and Biodiversity Conservation Act.

But Dr Henry says Labor’s ambitious proposals cannot be achieved without major reform.

“If we can’t achieve environmental law reform, then we should stop dreaming about more challenging options,” the Australian Climate and Biodiversity Foundation chair will tell the National Press Club on Wednesday.

“To put it bluntly, there is no chance of Australia meeting stated targets for net zero, renewable energy, critical minerals development, housing and transport infrastructure without very high quality national laws.”

These goals are also an answer to Australia’s flagging productivity which the government has been determined to address in its second term.

“Economics has, for the most part, ignored the most important constraints on human choices,” Dr Henry will say.

“Our failure to recognise that the laws of nature affect the set of feasible choices available to us is now having a discernible impact on productivity – and things are getting worse with accelerating speed.

“We need to break the deadlock.”

Reforms to main environment laws would need to ensure Commonwealth, state and territory governments can co-operate for a shared purpose, finalise effective national standards and establish an expert, independent decision maker in the form of a national environmental protection agency.

For more than two decades, the country’s main environment legislation has remained largely unchanged, even after a landmark review released in 2021 found the act was not fit to address current or future challenges.

Labor came into office with a promise to fix the laws, but its proposals have stalled following staunch criticism from scientists, environmentalists and mining industry groups.

Sweet and tangy jujubes could soon be on the way to Australian shelves as part of a broadened trade pact with China.

The agreement was one of six signed by Prime Minister Anthony Albanese and Chinese Premier Li Qiang on Tuesday as Australia and China sought to boost business links as US President Donald Trump upends the global trade order.

Jujubes, a small apple-like fruit, will be exported to Australia while apples from the Australian mainland will be allowed to be exported to China for the first time. 

Another four memoranda of understanding were signed by the pair as Mr Albanese met the highest-ranking Chinese leaders – President Xi Jinping, Premier Li and Chairman Zhao Leji – in the centrepiece of his six-day visit to China.

Australia and China must deepen economic co-operation given increasing trade frictions elsewhere, Mr Li said after a lavish welcome in Beijing’s Great Hall of the People. 

“In recent years, co-operation has encountered headwinds,” he said, adding that it was hard to find two countries with more complementary economies than Australia and China.

His comments were echoed by Mr Albanese. 

“My government believes unequivocally in free and fair trade as a driver of global growth, and I know the discussions that we’ve had today have been very constructive,” he said.

But the relationship is not without its challenges. 

China has chafed at Australia’s stringent foreign investment regime on Chinese firms. 

Mr Li said China would protect the rights of foreign businesses and treat them in accordance with the law, in an oblique reference to Australian plans to tear up a Chinese-owned company’s lease of Darwin Port. 

“I trust Australia will treat Chinese enterprise fairly and properly resolve issues regarding market access and investment review,” he told a gathering of Australian and Chinese business leaders.

Mr Li and Mr Albanese also signed an agreement to kickstart a review of the 10-year-old free trade agreement between the two nations. 

Collaboration on steel decarbonisation, increasing tourism links and paperless certification of agriculture products were also broached at the meeting. 

The prime minister will visit the Great Wall on Wednesday before flying out to Chengdu in the southwestern province of Sichuan – known as the home of the giant panda.