Australia can capitalise on “enormous opportunities” in the wake of Donald Trump’s tariffs, Prime Minister Anthony Albanese says as the US president escalates his trade feud with China.
The government hopes to reassure investors and the business community that Australia is well-placed to avoid a recession, as the rest of the world faces far more dire economic consequences.
Mr Albanese talked up his government’s diplomatic victories as he positioned Labor as best-suited to make the most of Australia’s opportune geographical position and increase trade links with Asian neighbours.
“There are enormous opportunities for Australia to take advantage of where we are in the world,” he told reporters on Wednesday.
“In ASEAN, building on the work that we’ve done, building up trade relationships through Nicholas Moore’s report about Southeast Asia, building our relationship with India, continuing to build on our economic relationship with China, a relationship that we have repaired since we’ve been in government.”
The comments are a dig at the coalition, who were in government when China slapped sanctions on a swathe of Australian exporters, hobbling industries such as barley, wine and seafood.
Australia also looks to build trade ties with the European Union to make up for lower export demand.
Trade Minister Don Farrell is set to meet with EU counterpart Maros Sefcovic on Wednesday night to resume free trade agreement negotiations. Talks broke down in late 2023 due to disagreements over market access for agricultural products.
Mr Albanese’s reassurance comes alongside Treasurer Jim Chalmers calling meetings with the nation’s economic and financial regulators ASIC, APRA and the ACCC, and the heads of the Reserve Bank.
Those talks follow meetings with business leaders as the government ensures everything possible is being done to safeguard Australians from global volatility, Dr Chalmers said.
“These escalating trade tensions are casting a dark shadow over the global economy but Australia’s robust economy and budget puts us in good stead,” he said.
He hit out at Opposition Leader Peter Dutton for suggesting Labor would lead Australia into a recession if re-elected.
Treasury and several economists, such as ANZ’s Adelaide Timbrell and former RBA board member Warwick McKibbin, are not predicting Australia to enter a recession.
But IG markets analyst Tony Sycamore said the Australian economy was on track for a seismic hit as US country-specific tariffs, including a 104 per cent impost on China, were about to take effect.
“At the risk of sounding dramatic, we are on the verge of seeing the two largest economic and military superpowers collide at high speed, with Australia caught squarely in the middle,” he said.
“If current lines hold, the fallout has the potential to dwarf the economic impact on the Australian economy felt during the GFC and COVID.”
Dr Chalmers conducted his meeting blitz as he prepared for an election debate against his coalition counterpart Angus Taylor on Wednesday night.
The coalition has traditionally banked on its reputation as superior economic managers but recent polling suggests voters are no longer convinced.
A survey by pollster Redbridge found 31 per cent of respondents thought Labor’s economic vision was better for the nation, compared with 29 per cent who thought the coalition had a superior plan.
Mr Dutton attacked Labor for weakening Australia’s economic position, undermining the nation’s ability to respond in a crisis.
“Only a coalition government can deal with the economic headwinds, the uncertainty, the prospect of a global recession,” he told reporters.
“Labor has demonstrated all they do is tax and spend.”
Prime Minister Anthony Albanese said his government had turned a deficit in the last year of the previous coalition government into two surpluses, although the budget has since returned to a structural deficit position.
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