SYDNEY (Reuters) – Australia is expected to manage the direct effects of U.S. tariffs imposed by President Donald Trump, but the country’s economic growth will be affected as the U.S. and Chinese economies experience a slowdown, according to Australian Treasurer Jim Chalmers.
In a press conference on Monday, Chalmers presented economic modeling that projected a 0.1% decrease in Australia’s GDP for 2025. The modeling also indicated a 0.2% rise in inflation, which is currently at 2.4%.
Chalmers noted that the global trade tensions sparked by Trump’s tariff policies were expected to have significant impacts on both the U.S. and Chinese economies. The concerns surrounding the Chinese economy have already contributed to a drop in the Australian dollar, which fell below 60 cents for the first time since the pandemic.
The Australian government anticipates that while the direct effects of the tariffs may be manageable, there will still be a broader economic impact as trade conflicts unfold.
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