Analysis: The outcome of Trump’s tariff announcements will put Anthony Albanese to the ultimate test

A rate cut for the Prime Minister would have been a dream come true, but he’ll have to settle instead for his next major obstacle, argues Clare Armstrong.

Anthony Albanese was never going to get a fairytale mid-campaign rate cut, so the political sting of the Reserve Bank’s decision to hold had all but been dissipated before it arrived.

The Prime Minister will still face sharp political attacks from his opponents, who argue Labor’s high spending over the last three years kept inflation higher for longer, but there is another economic decision looming with the potential to deliver Mr Albanese a far greater blow.

Within 48 hours Australian farmers and businesses will learn just what tariffs US President Donald Trump has in store for them and it will be up to Mr Albanese to explain the result.

The issue for Mr Albanese is he doesn’t have that long to prove his negotiating credentials – he has only weeks to convince Australian voters to keep in the job for long enough to even have a chance of achieving success. Cartoon: Peter Broelman

Should Australia emerge from “liberation day” – scheduled for April 2 in the US – unscathed, it will be a victory for Mr Albanese, no matter how much his detractors try to claim the narrative is a little more complicated than that.

But in the more likely event of Australian exporters being hit with taxes on goods and products sold to the US, the Prime Minister’s ability to handle Mr Trump over the next term will be sharply in focus.

Many industry insiders and observers of the situation in the US believe Australia’s only real chance of securing exemptions to Mr Trump’s tariffs is to negotiate them after the fact.

They point to the eight months it took the former Turnbull government to secure carve outs for Australian steel and aluminium exports to the US six years ago when Mr Trump was last in office.

The issue for Mr Albanese is he doesn’t have that long to prove his negotiating credentials – he has only weeks to convince Australian voters to keep in the job for long enough to even have a chance of achieving success.

The economic and security uncertainty fuelled by the Trump presidency is a front-of-mind issue for many Australians, making for an unusual situation where an international situation is central to a domestic election campaign.

The pain experienced by Australian mortgage holders off the back of 13 rate rises – which coincidentally started during the 2022 election campaign – is very real and this week’s hold only prolongs that.

But with the White House currently playing out like a reality television show that the entire world can’t stop watching, it’s the tariff threat that is more likely to cause Mr Albanese’s otherwise strong campaign to come unstuck this week.

Originally published as Analysis: The outcome of Trump’s tariff announcements will put Anthony Albanese to the ultimate test