As the federal election kicks off, Prime Minister Anthony Albanese is facing an unexpected but formidable challenge: Donald Trump’s looming tariffs.
With Trump poised to unveil sweeping trade measures on April 2—dubbed “liberation day”—the Albanese government finds itself under immense pressure to protect Australian industries from potential economic fallout.
The Coalition has wasted no time in capitalizing on the situation, criticising Albanese for being “passive” rather than “proactive” in his dealings with the U.S. administration. Former ambassador to the U.S. and ex-Treasurer Joe Hockey has pointed to Australia’s lack of a strong relationship with Trump’s team as a key reason why the country was left out of previous tariff exemptions. The question now is whether Albanese can prevent a repeat scenario.
This isn’t just a diplomatic test; it’s an economic one. The impact of Trump’s tariffs could be severe, with Australian beef and wine exports potentially facing new taxes, while pharmaceutical giants lobby against Australia’s Pharmaceutical Benefits Scheme (PBS), arguing it disadvantages American drug manufacturers. Economist Shane Oliver warns that even if Australia avoids direct tariffs, the ripple effects of a global trade war could knock 1% off our GDP—amounting to a staggering $27 billion loss.
The Albanese government insists it is taking “constructive” steps to manage the situation, but the reality is that Australia was blindsided by Trump’s steel and aluminum tariffs, learning about them through media reports rather than direct diplomacy. This lack of preparedness is concerning. While Albanese touts Australia’s independence from international influences, his government cannot afford to ignore the economic realities of a shifting U.S. trade policy.
Meanwhile, Opposition Leader Peter Dutton has been quick to draw comparisons between Albanese’s approach and Trump’s transactional nature. Dutton argues that strong, early engagement with Trump—like the Coalition’s proposed divestiture powers against supermarket monopolies—could have secured Australia a better position.
Ultimately, this tariff debacle is a defining moment for Albanese’s leadership. Can he navigate the unpredictable waters of Trump’s trade policies, or will he be caught flat-footed yet again? With the election underway, voters are watching closely.
