Analysis

Bullock was right about Australia’s shock absorber against US tariffs

Last week, the RBA governor said the exchange rate would be an important “buffer” in Trump’s trade war. It is what economists call an “automatic stabiliser”.

John KehoeEconomics editor

Apr 8, 2025 – 1.27pm

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The Australian dollar’s dip to a five-year low below US60¢ is a shock absorber against Donald Trump’s damaging trade war.

The depreciation is evidence of Reserve Bank of Australia governor Michele Bullock’s foresight that the currency would be the first line of defence against Trump’s tariff turmoil.

John Kehoe is economics editor at Parliament House, Canberra. He writes on economics, politics and business. John was Washington correspondent covering Donald Trump’s first election. He joined the Financial Review in 2008 from Treasury.