Greens Urge Immediate Rate Cut Amid Global Trade Uncertainty

The Greens says RBA must act now as Trump’s tariffs have triggered global instability.

Australian Greens Leader Adam Bandt and Housing spokesperson Max Chandler-Mather speak to the media during a press conference at Parliament House in Canberra, Australia on Nov. 25, 2024. AAP Image/Lukas Coch

Just a day after the Treasury warned that global economic turbulence triggered by U.S. President Donald Trump’s tariff hikes could threaten international markets, the Greens have called on the Reserve Bank of Australia (RBA) to urgently slash interest rates.

“The RBA will cut interest rates at their next meeting, but they should not sit on their hands for another six weeks while the crisis unfolds,” Greens Economic Justice spokesperson Senator Nick McKim said.

According to McKim, inflation is already within the central bank’s preferred range and continuing to decline.

Economists, he noted, are now debating the size of the rate cut, not its likelihood.

“There is no justification for the RBA to delay,” he said.

Treasury Flags Risks

On April 8, Treasury officials released the Pre-election Economic and Fiscal Outlook, warning that ongoing trade tensions and related market volatility could shake both consumer confidence and corporate investment—including in Australia.

The Trump administration recently announced sweeping tariff increases on imports from nearly every country, ranging from 10 to 50 percent.

The decision has sparked a global backlash, with China retaliating by imposing a 34 percent tariff on U.S. exports.

Financial markets responded swiftly. Australian shares experienced sharp swings over consecutive trading days as investors tried to assess the broader implications of the escalating trade war.

RBA Cut Expected in May as Pressure Builds

Federal Treasurer Jim Chalmers has suggested that the RBA is likely to move on interest rates sooner than previously anticipated, with some financial analysts now forecasting a 50-basis-point reduction in May.

Chalmers said while Australia’s economic fundamentals remain strong, the country won’t be immune to the ripple effects of global market instability.

“But we still do expect Australian GDP to take a hit and we expect there to be an impact on prices here as well,” he said.

He stopped short of predicting the RBA’s next move but acknowledged that market expectations are increasingly pointing to a series of rate cuts this year.

Dutton Warns Against Labor-Greens Alliance

Opposition Leader Peter Dutton warned that the situation could worsen.

“If there was to be a global recession, including in the United States, we don’t want a Labor-Greens government in charge in Canberra,” Dutton said.

He argued that Labor’s fiscal approach would fuel inflation and drive up household costs.

“It will be a disaster for retirement plans, for the economy. Big spending by the Labor-Greens government is inflationary, and Australian families, if they vote for Mr Albanese, will get higher interest rates, higher electricity prices, higher gas prices,” he said.

As the federal election approaches, economic fears driven by Trump’s tariff blitz are becoming a key battleground issue—with all sides seeking to convince voters they’re best equipped to shield Australia from global shocks.