‘We are well prepared’: Jim Chalmers says not to panic over Trump victory

The global impact of Trump’s protectionist trade policies, including his pledge to hit Chinese imports with a 60 per cent tariff, would be more substantial, according to the Treasury modelling.

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“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, according to his speech notes.

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

Analysis by accounting firm KPMG has found that if all Trump’s policies were implemented, Australia’s economic growth would be between 0.8 and 1.5 per cent lower than under current settings, a hit of $19 billion to $36 billion.

Former Reserve Bank of Australia board member Warwick McKibbin has also argued the Australian economy would suffer severe collateral damage from Trump’s policies.

Chalmers says he met prominent investor Scott Bessent, who is seen as a top pick to be Trump’s Treasury secretary, during a trip to Washington late last month.

In an increasingly globalised age, Chalmers will say that economic and foreign policy are not only interlinked but have become “almost indistinguishable”.

Trump announced on his Truth Social platform that neither Pompeo nor former United Nations ambassador Nikki Haley, who ran against him in the Republican primaries, would serve in his administration.

“I very much enjoyed and appreciated working with them previously and would like to thank them for their service to our country,” Trump wrote.

Foreign policy analysts have interpreted the announcement as an indication Trump plans to appoint figures from the populist MAGA (Make America Great Again) wing of the Republican Party to key roles rather than neo-conservatives who favour a more interventionist foreign policy.

Speaking after Trump’s victory, Wong said: “I was pleased to meet with Mike Pompeo and other senior Republicans when I was last in the United States, and we made it very clear the priority we give to AUKUS, and we’re pleased that it’s shared.”

Former prime minister Scott Morrison is close to Pompeo and has worked with him in his role as a member of the strategic advisory board of defence firm DYNE.

Robert O’Brien, another Morrison business associate and AUKUS supporter, had been floated as a likely secretary of state or national security advisor in a second Trump administration.

However, according to The Financial Times, O’Brien has advised his consultancy clients that he will not join the administration.

Robert Lighthizer, a passionate advocate of tariffs, may return to work for Trump in his previous role as US trade representative.

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Michael Fullilove, executive director of the Lowy Institute think tank, said: “Trump’s election presents particular challenges for Australia, given the closeness of the US–Australia alliance and the fact that some of Mr Trump’s impulses run counter to Australians’ instincts.

“There are question marks over US-China relations, trade and AUKUS.”

He added, however, that vice president-elect J.D. Vance had told him that he was a fan of AUKUS at this year’s Munich Security Conference.

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