Australia’s financial system will be capable to face up to world monetary shocks stemming from a second Donald Trump US presidency, Treasurer Jim Chalmers says.
In a speech to the Australian Institute of Worldwide Affairs on Monday, Chalmers will say Australia is prone to fare higher than different nations in dealing with potential financial pressures.
Trump has proposed important tariffs on imports into the USA as a part of his second-term agenda.
However Chalmers says Australia is ready for such a state of affairs ought to the measures be carried out.
“We must always anticipate a small discount in our output and extra value pressures, significantly within the quick time period,” Chalmers will say.
“However particular options of the financial system, like a versatile change charge and unbiased central financial institution, would assist mitigate in opposition to a few of this.”
Chalmers will say the affect globally to the proposed tariffs from the US can be rather more substantial, in response to Treasury modelling carried out earlier than the US election.
“The timing of this, and the responses and ramifications which may comply with — what economists name second-round results — are tough to foretell,” Chalmers will say.
“However we would not be immune from escalating commerce tensions which may ensue. That is in step with the views expressed final week by the prime minister.”
Australia was in a position to negotiate important exemptions to tariffs imposed by the US throughout the first Trump time period.
Chalmers believes Australia’s diplomatic efforts had a key bearing on financial coverage.
“Financial coverage and international coverage have at all times been interlinked, however now they’re virtually indistinguishable,” he’ll say.
“On this unsure world characterised by financial vulnerability and volatility, our international coverage crew is a crew effort which brings financial advantages.”
The speech comes forward of Prime Minister Anthony Albanese’s journey to South America later within the week for talks with world leaders on the Asia-Pacific Financial Cooperation and G20 summit.
The summits would be the final time Albanese shall be face-to-face with outgoing US President Joe Biden.
Chalmers will say that regardless of the result of the US election, the connection with America will stay robust.
“Our relationship with America underneath presidents and prime ministers from all sides is powerful and enduring.
“After all, we anticipate the incoming US administration to convey a distinct suite of insurance policies, and we’re assured in our skill to navigate that change as companions. No person ought to underestimate our skill to make it work. We’re nicely positioned and ready.”
