Australia Warns of "Seismic Shock" on Global Economy due to Trumps Tariffs

Australian Treasurer Jim Chalmers warned that the new US administration's policies will have a "seismic" impact on the global economy, ahead of his fourth national budget on Tuesday.

Chalmers will unveil new cost-of-living assistance for Australians in the budget on Tuesday evening, along with a six-month extension of electricity bill subsidies at a net cost of A$1.8 billion (US$1.1 billion).

Overall, the Treasurer said he expects a slight increase in revenue in the upcoming fiscal plan, but the global economic turmoil caused by US President Donald Trump's return to the White House has "cast a shadow over this budget."

"We are facing a whole new world of uncertainty. The changes coming from the US are not sudden, but they are seismic," he said in an interview with Bloomberg Television in Canberra on Sunday.

 "We have conflicts in the Middle East and Europe. We have political uncertainty and division around the world. The budget is designed not only to respond to all of this uncertainty, but also to strengthen our resilience to those external shocks."

Australia is scheduled to hold an election by May 17 at the latest, and Prime Minister Anthony Albanese is expected to begin his campaign within weeks. His center-left Labor government is trailing the opposition in opinion polls, but there has been a slight improvement in recent months as the election approaches.

Albanese has struggled to address voter concerns about rising living costs, including the housing crisis and the Reserve Bank of Australia's interest rate hikes to curb inflation. But with the central bank cutting interest rates for the first time in four years in February, Chalmers stated that the national economy was "on the mend" despite global pressures.

Chalmers said: "Inflation has fallen, real wages are up, incomes are up. Unemployment is very low by historical standards. Debt has fallen, interest rates are coming down, and now growth is picking up strongly in our economy, led by the private sector."

While the Australian government has pursued policies supporting industry and green energy, similar to those adopted by the previous Biden administration in the United States, Chalmers said there will be no new announcements in those areas in the upcoming budget.