Australia faces slightly slower growth and additional inflationary pressures from a second Donald Trump presidency but the federal treasurer believes the nation is well placed to withstand financial shocks.
Australia is likely to fare better than other nations in handling potential economic pressures, Jim Chalmers will say during an Institute of International Affairs event on Monday.
Mr Trump has proposed significant tariffs on imports into the US as part of his second term agenda.
But Dr Chalmers says Australia is prepared for such a scenario should the measures be implemented.
"We should expect a small reduction in our output and additional price pressures, particularly in the short term," the treasurer will say.
"But specific features of the economy, like a flexible exchange rate and independent central bank, would help mitigate against some of this."
Dr Chalmers will say the impact globally to the proposed tariffs from the US would be much more substantial, according to Treasury modelling carried out before the US election.
"The timing of this, and the responses and ramifications that might follow - what economists call second-round effects - are difficult to predict," he will say.
"But we wouldn't be immune from escalating trade tensions that might ensue. This is consistent with the views expressed last week by the prime minister."
Australia was able to negotiate significant exemptions to tariffs imposed by the US during the first Trump term.
The treasurer believes Australia's diplomatic efforts had a key bearing on economic policy.
Moody’s Analytics senior economist Stefan Angrick said higher tariffs on US imports posed the "biggest risk" to the broader Asia-Pacific region.
"The economic impact will depend on the specific policies implemented and their timing, but Trump’s campaign promises of higher tariffs, more restrictive immigration policies, and broad changes to US fiscal policy and regulation suggest a tumultuous period ahead," Mr Angrick said.
Business Council of Australia chief executive Bran Black said universally applied tariffs on goods going into the US would weigh on demand for Australian-made products but he was hopeful exemptions could again be negotiated.
Mr Black flagged the incoming Republican president's promise to cut the US corporate tax rate from 21 per cent to 15 per cent as a "significant concern" for Australia.
During the first Trump presidency, cutting the company tax rate from 35 per cent to 21 per cent was followed by an "immediate outflow of capital from Australia and other jurisdictions to the United States", he told ABC radio.
With a company tax rate of 30 per cent, Mr Black said Australia was the third least competitive jurisdiction in the OECD.
Nationals MP Barnaby Joyce said a trade war would be "very bad" for Australia and it was important to "get along very well with what is the most powerful ally we have".
"You take away our capacity to trade, you take away all those accoutrements and benefits in your lifestyle," he told Seven's Sunrise program.
Dr Chalmers' speech comes ahead of Prime Minister Anthony Albanese travelling to South America later in the week for talks with world leaders at the APEC and G20 summit.
The summits will be the last time Mr Albanese will be face to face with outgoing US President Joe Biden.
