Treasurer Acknowledges Australia’s Vulnerability to Potential Trump Tariffs, But Believes in Country’s Ability to Thrive
The Labor government has reaffirmed that AUKUS will continue to progress.
Treasurer Jim Chalmers warned of potential negative impacts on Australia from import tariffs that could be imposed by an incoming Trump administration during a speech on Nov. 11 at the Australian Institute of International Affairs (AIIA).
The incoming president has proposed tariffs of 10 percent on all imported goods, with higher rates of up to 60 percent and 100 percent on imports from China and Mexico, respectively.
World leaders and media outlets have been concerned about the potential impacts of changes to trade rules following President-elect Trump’s electoral victory.
The Australian government has stated that it is prepared for these scenarios, with long-term outcomes expected to be favorable for the country.
“We anticipate that the incoming U.S. administration will introduce different policies, and we are confident in our ability to adapt to these changes as partners,” Chalmers stated.
Australia has already begun establishing personal connections with potential key members of the incoming president’s team behind the scenes. Chalmers mentioned meeting Trump’s economic adviser Scott Bessent, who may become Treasury Secretary in the new administration.
Foreign Minister Penny Wong also engaged with former Secretary of State Mike Pompeo during her visit to Washington in October, before Pompeo was excluded from the new administration’s cabinet.
One potential candidate for a cabinet position is former Green Beret and current Florida Congressman Mike Waltz (R-FL).
Treasury Says Australian Economy Flexible Enough
Australia’s Treasury modelling indicates that while there will be some negative impacts like reduced output and price pressures, the country’s economy is expected to fare better compared to other nations.
Australia’s flexible exchange rate and independent central bank are expected to mitigate the impacts of escalating trade tensions. The strong and enduring relationship between the two countries is also seen as a positive factor.
Treasurer Chalmers expressed support for Australia’s Ambassador to the United States Kevin Rudd, despite previous critical remarks made by Rudd about President-elect Trump.
Chalmers highlighted Ambassador Rudd’s efforts in building connections across political aisles and introducing key financial figures to the Biden administration and Republican economic team.
Concerns have been raised about potential costs to American consumers due to the proposed tariffs, but some experts believe that any inflation could be offset by regulatory cuts that may stimulate economic growth and personal wealth.
Minister for Defence Capability Pat Conroy remains “very confident” in the progress of the trilateral AUKUS pact.
Conroy emphasized the strategic importance of AUKUS for enhancing defense capabilities in the Indo-Pacific region and highlighted strong bipartisan support for AUKUS in the United States.
Overall, Australia is continuing to invest in its defense capabilities while also focusing on cost-of-living relief measures.
