Extract from ABC News
Analysis
The change in economic outlook is just an example of the wave of change Donald Trump is imposing on everyone else on the planet. (Reuters: Carlos Barria)
As the internet came alive with memes of outraged Heard Island penguins protesting at being hit with 10 per cent tariffs by the US on Thursday, others online were speculating about just how the Trump administration had come up with its tariffs formula, which not only hit the scenic penguin colony but the US military base on Diego Garcia.
There was some speculation that the White House might have asked ChatGPT for some suggestions the night before.
The scary thing is that the wild, erratic and irrational way the Trump White House works meant that this did not necessarily seem such a crazy theory.
But as the US stock market collapsed in its biggest one day fall since the COVID pandemic hit in 2020, the underlying impact of Trump's wild tariff moves forced us all to not just anxiously anticipate the next madness, but to understand that, whatever the future of the president, his fellow travellers, and the presidency, the times have changed, and the entire world has to just get on as best it can.
We've all talked about the potential strategic and economic ramifications for Australia of Trump's America First policies. But they have always been mired in uncertainty about what might actually happen.
Well, they are now happening. The rest of the world has been quietly planning. And the whole world will never be the same.
It's not just a question of who puts on reciprocal tariffs. It's that countries that might not necessarily even like each other very much are talking together about rewiring their trading systems to essentially deal with a USA-less world.
At home, the economic scenarios framed within the past couple of weeks to be contained in the federal budget, and in the RBA's rate decision on Tuesday, are sort of redundant.
Everyone knew Liberation Day was coming on April 2, but couldn't confidently forecast just what it would mean.
Waves of change
An example of what it means is that the markets are now predicting four interest rate cuts in Australia this year, with the next as early as next month, and possibly even 0.5 percentage points. Which they weren't doing six days ago.
This change could be crystallised when Treasury and the Department of Finance release the Pre-Election Fiscal and Economic Outlook early next week.
Treasurer Jim Chalmers had commissioned two rounds of modelling on the Trump tariff scenarios from late last year but said this week that he had commissioned another round as soon as Trump made his announcements in the White House Rose Garden.
We are in "caretaker" mode just now, which would normally suggest he couldn't commission such modelling. But given the gravity of events, he said he would commission it and release it publicly to share it with the opposition.
Treasurer Jim Chalmers said he has commissioned another round of modelling on the Trump tariff scenarios. (ABC News: Matt Roberts)
In the US, analysts are discussing whether the recession that they now are increasingly anticipating will only hit the US economy, and/or just how an inflationary surge from tariffs might actually transmit to the rest of the globe.
In our region, where many of our trading partners will be hit hard by the new tariffs, much will depend on what decision China now makes about a stimulus to offset their impact.
The change in economic outlook is just an example of the wave of change Donald Trump is imposing on everyone else on the planet.
It involves big strategic questions, of course. There has been a clear tussle going on for a few years among policy analysts here about whether Australia is too close to the US, and about the value of AUKUS.
These questions only rear larger now. But as a first step, Trump's America has had to change the ground on which our leaders operate.
A sharp response
While many commentators have spoken about the lacklustre nature of our collective political leadership, and its competence, the government's response to the tariff decision on Tuesday was reassuringly sharp.
The prime minister, along with his foreign and trade ministers, came out early on Thursday morning to respond to the announcements.
Gone, thankfully, was all the usual tosh about our special relationship, great and powerful friends, wars fought etc, to be replaced by a much calmer and cooler response which dialled down the rhetoric, but made clear the government had been doing the groundwork to prepare for what was to come.
That involves maintaining a commitment to free trade, and pointing out that the government has been rebuilding and strengthening relationships in the region which could now prove crucial.
There was a comprehensive and detailed response to match getting the tone right. The fact that the detailed response was able to be worked out even as the government was caught up in the chaos of campaign travel, spoke particularly well of all those involved.
Opposition Leader Peter Dutton, by contrast, was still engaging in some of the tosh, continuing to suggest that he would be able to get exemptions that had escaped every other leader in the world.
Not only that, but he was suggesting he would use our defence relationship with the US to get a better outcome. What, perhaps suggest to the Americans they couldn't keep landing in Darwin? Or that we might close Pine Gap or North West Cape?
His informed colleagues were aghast. Neither approach was pitched in any way appropriately as a response to what was unfolding before us.
A new sense of uncertainty for voters
The veteran strategic and defence analyst Professor Hugh White told a seminar in Canberra organised by former prime minister Malcolm Turnbull this week: "I think the historians are going to judge Donald Trump's doing us a favour by making clear to us things we've been determined not to recognise for ourselves."
That is, "the strange thing about Donald Trump, and one of the most confusing things about this moment in history is that Donald Trump understands the underlying dynamics of American strategic position better than the old guys, better than the guys who supported the assumptions [that US leadership of the global rules based order] was continuing."
White's long held contention was that the US had stepped back from the global role it had maintained since the end of the Cold War, but that not even a lot of people in the Washington establishment could actually admit that to themselves, including President Joe Biden and his officials. Or the political establishment in Australia, for that matter.
Opposition Leader Peter Dutton was still engaging in some of the tosh this week. (ABC News: Brendan Esposito)
How any of this plays out in a disengaged electorate is hard to say, beyond the possibility that it will create a new sense of uncertainty for voters, just as things were starting to feel a bit better (based on consumer sentiment surveys this week).
It's worth keeping in mind that the biggest take-out many people may have got from this first week of the election campaign is that Peter Dutton thinks it would be nice to live in Sydney, near the harbour.
Only slightly more tin-eared an observation than his harbour dreaming was his declaration that "I don't think you've seen anything yet — wait until we get into this campaign and you will see more of what we've got to offer".
Well, yes, that's right… we haven't seen anything yet when it comes to detailed policies.
Eight days after his budget reply announcement that a Dutton government would effectively retrospectively change the ground rules on billions of dollars of investment by gas producers, by imposing an immediate domestic gas reservation on the east coast and force them to sell gas to the domestic market at a loss, we still don't know how he plans to do this. Not even a press release.
As my colleague Jacob Greber has reported, this has seen a cooling of the opposition leader's chummy relationship with mining magnate Gina Rinehart, who has expressed her disappointment in the Coalition's industrial relations and tax policies, while her company has made clear it is underwhelmed by the gas reservation plan.
A new level of contempt for voters
On Friday, Dutton was claiming the modelling behind the policy is "almost here", as the pressure increases on him to detail how the plan would drive wholesale gas prices below $10 per petajoule by the end of the year as he has claimed.
It looks for all the world like he will leave it to his energy spokesman Ted O'Brien to try to argue it out when he debates Energy Minister Chris Bowen at the National Press Club on Thursday.
Anyone would think that the calling of the election campaign was a surprise.
There are also no policy details on the other bare bones of ideas that the Coalition has floated, like how it would cut permanent migration by 25 per cent, or how it would cut 41,000 public service jobs.
There's a familiar pattern here for those who have been around for a while.
It used to just be a question of when a political party was going to submit its policy costings for official assessment by the Parliamentary Budget Office.
Quite often it never happened, and certainly not in time for them to be released publicly before the election.
Now there's a whole new level of contempt for voters being demonstrated in the lack of actual policy detail.
The day of reckoning, however, could still come. In 2010, the Coalition's failure to present a coherent and properly costed set of policies cost it the support of key crossbenchers in the negotiations over who would form minority government.
The spectre of that happening again means it won't necessarily be actual policies that determine that decision if there is a hung parliament, but an assessment of basic competence should be keeping the Coalition awake at night.
Laura Tingle is 7.30's political editor.
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