In a major economic address, Treasurer Jim Chalmers will say Australia needs to focus on resilience instead of retaliation in the face of the Trump administration’s tariffs.
, amid concerns other industries could be caught in the crosshairs and that the move could escalate into a global trade war.
Chalmers is set to deliver the economic speech in Brisbane at lunchtime, one week ahead of the federal budget.
A time of ‘serious volatility’
“This is a time of serious volatility in a global economy which is increasingly uncertain and unpredictable,” Chalmers will say in the speech.
He will cite the new United States administration disrupting trade, a slowdown in China, a war in eastern Europe and a fragile ceasefire in the Middle East, as well as “political division and dissatisfaction around the world”.
“We’ve seen extreme market volatility in the US and elsewhere as a consequence.”
Global growth over the next three years is expected to be its weakest since the 1990s as trade barriers, like the tariffs on steel and aluminium, pull the handbrake on growth.
While tariffs will directly impact Australian gross domestic product (GDP) by less than 0.02 per cent by 2030, the indirect consequences could result in a 0.1 per cent hit to GDP by the end of the decade, according to Treasury estimates.
Decision to tariff Australia ‘senseless and wrong’
In the speech, Chalmers will take aim at US President Donald Trump’s decision not to exempt Australia from tariffs on steel and aluminium.
“The decision not to exempt Australia from American tariffs on steel and aluminium was disappointing, unnecessary, senseless and wrong, as the PM rightly pointed out,” he will say.
He will say the “whole world has changed” and that this had been accelerating since inauguration day, adding that the rules that “underpinned global economic engagement for more than 40 years are being rewritten”.
“Tariffs and escalating trade tensions are a form of economic self-harm. They are self-defeating, and self-sabotaging,” Chalmers will say.
Chalmers will add these trade restrictions will lead to less growth and more inflation and will impact multiple industries and quarters.
Chalmers urges resilience, not retaliation
Chalmers will warn of economic turmoil following the tariffs but emphasised Australians would be resilient.
“We are not uniquely disadvantaged by these tariffs, but we deserve better as a long-term partner and ally,” he will say.
“In a world of retaliation and escalation, the impacts of tariffs are amplified, they linger for longer.
“Our response to this will not be a race to the bottom on tariffs. We’ll go for more resilience, not more retaliation.”
Australia has already reached out to other nations affected by the tariffs in a bid to diversify and expand trading relationships.
Prime Minister Anthony Albanese has also , with Trade Minister Don Farrell saying he was .
Opposition leader Peter Dutton has labelled Albanese as “weak” and said he could “get a deal done with the Trump administration” should he be elected.
The speech comes after the Organisation for Economic Co-Operation and Development (OECD) — an intergovernmental organisation consisting of 38 member countries, including Australia — released their latest assessment of the global economy on Monday.
OECD economists lowered their estimates for Australia’s real GDP growth from 2.5 per cent in 2026 to 1.8 per cent, well below the Reserve Bank’s forecast of 2.3 per cent.
The report also warned tariff hikes and rising protectionism could push consumer prices higher and increase inflation, leaving central banks with little choice but to keep interest rates higher for longer than previously expected.
— With additional reporting by the Australian Associated Press
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