Australia faces economic pain from Trump win, Chalmers warns


Australia Treasurer Jim Chalmers. — Bloomberg

CANBERRA: Australia faces the threat of short-term economic pain in the form of reduced output and further inflation pressures as a result of incoming US President Donald Trump’s policy agenda, according to Treasurer Jim Chalmers.

Revealing the findings of Treasury modelling undertaken in anticipation of a Trump win, Chalmers said while there would be a “small reduction in our output and additional price pressures”, the features of Australia’s economy would leave it better off compared to other nations.

“The timing of this, and the responses and ramifications that might follow – what economists call second-round effects – are difficult to predict,” Chalmers will say in a speech, according to extracts provided in advance by his office.

“But we wouldn’t be immune from escalating trade tensions that might ensue.”

Anxious to avoid the panicked scrabbling that followed Trump’s election in 2016, the Australian government has been working behind the scenes to build bridges to the former president’s team in advance of his election win last week.

Foreign Minister Penny Wong met with Trump’s former Secretary of State Mike Pompeo in Washington during her visit in October, while Chalmers sat down with the former president’s economic adviser Scott Bessent, who has been flagged as a potential Treasury Secretary in the administration.

The government also commissioned Treasury modelling on the potential impacts of a second Trump administration, or the election of Vice-President Kamala Harris.

Chalmers said the Australian government was “well placed and well prepared” to navigate the change in Washington, but with the centre-left Labour party facing a tough battle to re-election within six months, small changes in the economic outlook could be highly significant.

The latest Newspoll survey released on Sunday revealed Labour is trailing the Liberal-National coalition on voting intention 49% to 51%.

That is the same as three weeks ago, and comes amid voter frustration over high inflation, a national housing crisis and interest rates which sit at a 13-year high. — Bloomberg

Follow us on our official WhatsApp channel for breaking news alerts and key updates!

Australia , inflation , Jim Chalmers

   

Next In Business News

Dollar lingers at six-month peak as US inflation comes in focus
China unveils tax incentives to revive struggling property sector
MClean Technologies gets Bursa Securities nod for proposed private placement
Scientex's subsidiary proposing to establish RM1.5bil sukuk wakalah programme
Aizo secures RM24.1mil infrastructure contract
Ringgit continues to end lower vs US dollar
Pasdec to dispose of industrial land for RM73.5mil
Uzma gets integrated well continuity services contract from PETRONAS
Dayang Enterprise secures two contracts from PETRONAS Carigali
VSTECS optimistic about 4Q, expects strong FY24 finish

Others Also Read