As Australians, we may be an ocean away, but the most recent 2024 US presidential election could have a far-reaching impact on our economy, political landscape, and social policies. Now that Donald Trump has officially been called as the next President of the United States, the ripple effect of his second term will be felt far and wide.
From trade policies to social movements, here’s how the Trump win could impact Australians in 2025 and beyond.
Potential Tensions In Trade Agreements
Trump’s intentions regarding tariffs have been clear since his campaign for President began. During his last term, Australia narrowly avoided being hit with tariffs, but we may not be so lucky this time around.
Currently, under a 20-year-old agreement with the U.S. 90 per cent of Australia’s imports to the States are tariff-free. It will take some careful diplomacy on Australia’s part to avoid increases again, with Trump mentioning during his campaign wanting to install a broad 10 per cent tariff on most imports.
Australia’s economy is also highly dependent on its trade relationship with China – particularly in industries like mining, agriculture, and education. During his previous administration, Trump’s tariffs on Chinese goods spurred retaliatory measures from China, which indirectly affected Australian exports.
If a similar trade war reignites, Australia might have to navigate increasingly complex diplomatic waters, choosing to either strengthen ties with the US or manage its own relationship with China more independently. The Australian Financial Review suggests that such shifts could prompt Australia to explore alternative export markets or bolster trade agreements within the Asia-Pacific region to offset potential losses.
Interest Rates Could Rise
Trump’s return to power brings uncertainty to global financial markets, including those in Australia. One of the most immediate concerns is how his administration’s policies might impact Australian interest rates and inflation.
In Trump’s previous presidential term, his “America First” approach led to tensions in global trade, particularly with China. Given that Australia has a strong economic relationship with China, any escalation in US-China tensions could have repercussions on Australia’s trade exports and economic stability.
Should Trump push for lower interest rates in the US, the Federal Reserve could react by strengthening the US dollar which will put pressure on the Reserve Bank of Australia (RBA) to adjust our interest rates accordingly. This could then have a ripple effect on Australia’s real estate sector – which is already grappling with high-interest rates – as it’s possible it may increase inflation and add further strain to Australian households.
Indirect Influence On Social Policies Including Abortion Rights
While the US cannot directly dictate Australian laws, the social and political climate in America often influences Australian discourse. As such, Trump’s victory could further embolden conservative political factions worldwide. For instance, his stance on issues like abortion rights may inspire similar debates within Australia – which have somewhat already sparked in the case of the recent Queensland state election.
Trump-appointed judges in the US Supreme Court have already set precedents on reproductive rights, and while Australia’s legal system is distinct, these global ideological shifts can sometimes influence political discourse domestically. With Australian states largely controlling abortion policies, any pressure to adopt more conservative stances could emerge indirectly.
This influence extends beyond abortion rights. Trump’s policies on immigration, gender identity, and climate change have already inspired global conversations. Any shifts in these areas under a second Trump administration – and consequent media coverage – could shape the Australian public’s attitude on similar issues, potentially affecting local policies.
Implications To Foreign Policy And National Security
A second Trump presidency could also result in a more isolationist US foreign policy, creating the potential for fractures in Australia’s defence strategy and alliances.
His previous term saw a push towards less engagement in international conflicts, which could place a heavier defence burden on allies. As a result, Australia might need to recalibrate its foreign policy in response, especially in the Asia-Pacific region, where US support plays a stabilising role against growing influence from China.
Additionally, Trump’s potential withdrawal or re-evaluation of alliances could press Australia to increase its defence spending and explore independent security measures. In 2017, Trump’s administration threatened to cut back on defence funding for NATO, raising concerns about the US backing away from global military commitments. Should Trump succeed in his presidential campaign, there is a chance that Australia will be required to handle regional threats independently.
So, What Should Australians Prepare For?
While Trump’s political impact is felt most acutely in the US, Australians should expect some indirect yet significant effects in the economic, social and geopolitical arenas. His administration’s policies could bring volatility to our financial markets, influence social movements, and challenge Australia’s foreign policy strategies.
Australian analysts anticipate potential policy clashes that could strain bilateral relationships and may push Australia to reassess its trading strategies and economic dependencies.
Socially, Trump’s win could amplify conservative movements globally, including in Australia. Although Australia has its own legislative independence, shifts in US policy, particularly around reproductive rights, can set precedents.
When it comes to social policies such as abortion rights, changes made under Trump’s administration are unlikely to directly alter Australian laws, however, it is expected that his reign could inspire local advocacy groups aligned with conservative views and see an increase in lobbying for similar policies in Australia.
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