The leader who spoke loudest at the treasurers’ debate wasn’t even in the room

Donald Trump was not physically standing alongside Jim Chalmers and Angus Taylor, but the US president was clearly present in the first treasurers’ debate of the federal election campaign.

As Chalmers and Taylor pinged each other with well-rehearsed talking points, it was the occupant of the White House, his tariff war and what that means for Australian taxpayers that loomed the largest.

The debate between Jim Chalmers and Angus Taylor was dominated by a man who wasn’t there – Donald Trump.Credit: Sky News

The debate took place after another day of turmoil on equity, bond, commodity and currency markets. The ASX200 shed another 1.8 per cent, or $41 billion, in value to be down more than 7 per cent since Trump announced his tariff plan.

The Australian dollar on Wednesday slipped below US60¢, oil prices dropped below $US60 a barrel, while the iron ore price edged down to $US93.35 a tonne.

Panicked financial markets believe the Reserve Bank will slice official interest rates five times by Christmas. A fortnight ago, they were only pricing in two cuts. And just after Taylor and Chalmers stopped speaking, China retaliated against Trump with an 84 per cent tariff on American goods, escalating the chaos.

That’s the Trump economic factor in this campaign, and it dominated the hour-long debate.

It only took Chalmers until the second question to link Trump and his Elon Musk-run Department of Government Efficiency to Taylor and the Coalition.

“And we’ve got an opposition leader and an opposition which is absolutely full of these kind of DOGEy sycophants who have hitched their wagon to American … slogans and policies, and especially cuts which would make Australians a worse off,” he said.

Taylor dismissed the attack as nonsense, linking a decision made by the Gillard government to shut down the live cattle trade with Indonesia more than a decade ago to the failure of Labor to support free trade.

“We have always been the ones fighting for open markets,” Taylor said.

The most interesting part of the debate, and where Chalmers edged Taylor, was over claims Australia is headed for recession.

Opposition leader Peter Dutton claimed on Tuesday that Chalmers believed a recession was on its way by talking about interest rate cut expectations when the treasurer had added he believed Australia was “well-placed” to deal with tariff fallout.

A visibly angry Chalmers made clear in the debate that a recession was not forecast. “We don’t expect that, and that’s what I said earlier in the week, and Peter Dutton has lied about that multiple times since then,” he said.

Chalmers painted the government’s tiny tax cuts, its agenda to sink money into encouraging business investment in areas such as critical minerals while providing households with direct cost-of-living relief, as factors protecting the economy.

He said the low jobless rate, currently at 4.1 per cent, was a key strength which would help cushion any blow from Trump’s tariff war but past surpluses would help too.

“The budget is in a much stronger position now than it was three years ago, and that’s because I’ve delivered two budget surpluses,” he said.

“If there was a downturn, this government’s got the capacity to keep spending to prop up the economy,” Chalmers said.

By contrast, Taylor– while declaring the budget “buffers” were gone – said the best way to navigate a downturn would be to boost business investment.

“Well, you know, if you get business investing, you can avoid a downturn,” he said, prompting Sky News host Ross Greenwood to ask why they would be investing in the midst of a recession.

Taylor was then pressed on where he would cut spending, with the shadow treasurer naming the government’s quantum computing plans and housing scheme as two targets, alongside a claim the government was building 28,000 kilometres of unnecessary power transmission lines.

This enabled Chalmers to return to his talking points around “secret cuts” and the Coalition’s nuclear power policy plan.

The only reason the issue of a possible recession and whether the budget could afford more spending was on the debate agenda was because of Trump.

Today, two central banks – India and New Zealand – both cut their key lending rates, citing the Trump thump as a major factor.

While Chalmers and Taylor were pushing each other’s buttons, key European equity markets shed up to 3 per cent in value as they digested Trump’s tariff plans.

Both men know cost-of-living issues are front and centre for most Australian voters. That hasn’t changed.

But that issue has been joined by the fear unleashed by Donald Trump’s tariff war with every nation on the planet, including Australia.

Neither man had a clear answer on how they would deal with the president. As the falls on sharemarkets show, that’s because no one really knows how to deal with the uncertainty Trump has unleashed on the world.

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