Treasurer Jim Chalmers has warned that the escalation of US President Donald Trump’s tariffs is a cause of great concern for the Australian economy and inflation worldwide.

“In a world of retaliation and escalation, the impacts of tariffs are amplified, they linger for longer, resulting in a bigger reduction in GDP and a bigger increase in prices,” Chalmers said.

Trump is expected to expand tariffs to almost all imports by early April in addition to the recently imposed 25 percent on steel and aluminium.

There is significant concern that Australian exports of beef and pharmaceuticals will be heavily impacted by the incoming tariffs.

Chalmers’ fourth budget will reveal that the direct impact of the existing tariffs on the Australian GDP has only been affected by 0.02 percent however, the larger impact would be closer to 0.1 percent, domestically and globally, by 2030.

OECD Secretary-General Mathias Cormann said that “signs of weakness have emerged, driven by heightened policy uncertainty,” despite seeing resilience in the global economy with steady growth and a decrease in inflation.

“Increasing trade restrictions will contribute to higher costs both for production and consumption. It remains essential to ensure a well-functioning, rules-based international trading system and to keep markets open,” Cormann said.

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