Jim Chalmers asked the department to wargame US election outcomes
Australia’s economy could suffer under a Trump administration, Treasury officials have revealed, just before counting began in the United States.
Treasury secretary Steven Kennedy told Senate estimates on Wednesday morning Treasurer Jim Chalmers had asked his department to wargame what the outcome of the election would mean for Australia, particularly given Donald Trump’s proposal to increase tariffs.
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By continuing you agree to our Terms and Privacy Policy.Mr Trump has pledge a broad 10 to 20 per cent “universal baseline tariff” on all imported goods, and a 60 per cent increase on goods from China, which Dr Kennedy said would have “significant impacts” and could lead to lower economic growth in Australia.
“Whenever we see potential significant changes, we might just provide broad advice. In this case, there are proposed substantial increases in tariffs ... so it was just simply worth understanding what the implications might be for the Australian economy,” he told Senate estimates.
He said the increase in tariffs would have implications for the US economy and for China, which he noted was Australia’s largest trading partner.
“The imposition of trade restrictions, such as tariffs, typically lead to lower growth and higher inflation,” he said.
Dr Kennedy said the advice had not been on the “political ramifications” of the election, but had been a way to model how such tariff changes would affect the United States, China, trading partners, and the “flow on consequences” for Australia.
“We’re simply trying to explain that this is a policy that’s in play, and should that policy be enacted, what impact that would have on the economy.”
Dr Kennedy didn’t talk about what the analysis around a Harris victory would look like. It’s assumed such an outcome wouldn’t differ greatly from the current Biden Administration’s trade settings.
He confirmed Dr Chalmers had requested the advice, which had also been provided to cabinet.
Earlier, US Ambassador to Australia Caroline Kennedy said the alliance was unbreakable and the close relationship wouldn’t change — no matter who became president.
The daughter of former president John F Kennedy said it was a historic election, with a clear choice between candidates.
“Australia is our most trusted capable ally and that’s going to continue. We’ve got AUKUS, we’ve got incredible trade, we’ve got critical minerals,” she said.
“So there’s just so many things to bring us together as well as a love of elections, US politics and sports.”
She said while she’s “not supposed to talk about politics” as an ambassador, she noted “the issues on the ballot this time are important to women”.
“She (Harris) has made that really clear. Donald Trump is focusing more on immigration,” she said.
She also noted that the big unknown in the US was turnout, given they don’t have mandatory voting like in Australia.
“We need to get people to the polls, and I think that knowing how my children feel, the younger vote is going to really be determinative in this election. So that’s an important change,” she said.
