Chalmers warns Trump tariffs to impact Australia's growth, prompts RBA rate cuts

Australian Treasurer Jim Chalmers has warned that the economy will face challenges due to U.S. tariffs and the resulting trade tensions with China, projecting a 0.1% decline in GDP and a 0.2% increase in inflation. While he expects manageable impacts on the economy, Chalmers indicated that both the U.S. and Chinese economies would experience significant slowdowns as a result of these tariffs. The Australian dollar has fallen below 60 U.S. cents, reflecting concerns about economic stability and potential interest rate cuts by the Reserve Bank of Australia (RBA). Analysts suggest the RBA could implement multiple rate cuts this year to mitigate economic fallout, with predictions ranging from 0.25% to 0.5% reductions starting in May. Chalmers emphasized that these rate cuts are a response to the escalating trade crisis rather than an immediate emergency measure. Despite these challenges, he remains optimistic about consumer spending aiding growth in the future.