The US midterm result has left a divided government and a more uncertain global political environment, while the final two years of Donald Trump’s presidency could be a rocky ride for Australia.
A senior figure in Prime Minister Anthony Albanese’s orbit said there would be no change to the prime minister’s approach to handling President Trump. With three opportunities to meet the president over the next month during summit season, a source said the strategy is to continue with a 'calm and steady approach'. The source contrasted this with the approach of other leaders, saying, 'After he [Trump] was elected, we didn't rush over there like other leaders such as Keir Starmer, who did and then got burned.' They added the government has been consistent and does not provide a running commentary on the latest thing Trump has said.
Trump will face a Democratic Congress determined to stymie him at every turn. However, Congress has little ability to block the president when it comes to the conduct of foreign affairs and the ability to wage war. The president has initially signalled a willingness to work with the Democrats, but the reporting notes a high probability he could lash out, block legislation and take unilateral action targeting allies or enemies (or both).
Trade Minister Don Farrell said he was hopeful the Trump administration would heed two clear messages from the electoral rout: Americans do not like tariffs, and they are furious about the rising cost of living. Farrell said the midterms were the first time Americans had a chance to vote on Trump's punishing regime of tariffs and 'when the public had a chance to vote on tariffs, they comprehensively rejected them'.
Farrell highlighted the current stoush over Australian lamb imports as one example. Australia accounts for about 60 per cent of all lamb imported to the US. Farrell is trying to convince his American counterparts not to put an additional 50 per cent tariff on Australia's lamb exports, on top of the existing 12.5 per cent tariff. He said, 'I've said to the Americans we want to increase lamb sales, not destroy them, which will happen if they impose those additional tariffs. One hopes they have got the message about what their public think about tariffs.'
The effects of the global inflation challenge driven by the war on Iran were felt again this week when the Reserve Bank of Australia raised interest rates for the fifth time this year. The article, by Chief Political Commentator James Massola, concludes that with a president who is unreliable and prone to change his mind, the next two years could be even rougher than the last, and that could mean more bad news for the global economy.
Analysis
Why This Matters
- The outcome of the US midterms creates profound uncertainty for Australia's security and economic interests, as a divided government in Washington could lead to erratic foreign policy and trade actions.
- The potential for a 62.5 per cent tariff on Australian lamb exports directly threatens a multi-billion dollar trade relationship and has implications for the global cost of living.
- The Australian government's willingness to publicly press its case using the election results signals a new phase in diplomatic relations with the Trump administration.
Background
Donald Trump was re-elected in 2024 and has pursued an aggressive trade agenda and a foreign policy that has disrupted traditional alliances, including a war on Iran. The 2026 US midterm elections resulted in a significant defeat for his Republican Party, handing control of Congress to the Democrats. Prime Minister Anthony Albanese has sought a pragmatic relationship with Trump, avoiding the high-profile courting seen by some other world leaders.
Key Perspectives
Albanese Government (Senior Figure): The prime minister will maintain his calm and steady approach, believing consistent, commentary-free diplomacy is the most effective way to manage the relationship with President Trump.
Trade Minister Don Farrell: The midterm result is a clear mandate against tariffs. He is actively lobbying US counterparts to drop proposed additional tariffs on Australian lamb, arguing they hurt American consumers and would destroy the trade.
What to Watch
- Whether President Trump follows through on his initial signal of willingness to work with Democrats or pivots to unilateral action via executive orders, particularly on trade and foreign conflicts.
- The outcome of Farrell's negotiations to prevent additional tariffs on Australian lamb, which will serve as a bellwether for the future of US-Australia trade relations.
- How the RBA handles the continuing inflation challenge caused by the global supply shocks from the war in the Middle East and trade disruptions.
Checked
12 claims in this story checked against 1 source: 12 supported.
Show each claim
- SupportedTrump’s final two years could be a rocky ride for Australia.WA Today - Latest News: “The final two years of Trump could be a rocky ride. Here’s how Australia will handle it.”
- SupportedThe US midterm result has left a divided government and a more uncertain global political environment.WA Today - Latest News: “The only thing that can be said for sure is that the global political environment is now even more uncertain, with a divided US government”
- SupportedA senior figure in Albanese’s orbit said the prime minister’s approach to Trump would not change and would remain “calm and steady”.WA Today - Latest News: “A senior figure in Albanese’s orbit said there would be no change to the prime minister’s approach to handling Trump. With three opportunities to meet the president over the next month during summit season, “we will continue with our calm and steady approach”.”
- SupportedThe senior figure said Albanese did not rush to meet Trump after his election like Keir Starmer, who “got burned”.WA Today - Latest News: ““After he [Trump] was elected, we didn’t rush over there like other leaders such as Keir Starmer, who did and then got burned.””
- SupportedThe senior figure said the government had been consistent and did not provide a running commentary on Trump’s latest statements.WA Today - Latest News: ““We have just been consistent, we don’t provide a running commentary on the latest thing Trump has said and they get along well. We don’t expect that to change.””
- SupportedTrump will face a Democratic Congress determined to stymie him, but Congress has little ability to block him in foreign affairs or the conduct of war.WA Today - Latest News: “Trump will doubtless face a Democratic Congress determined to stymie him at every turn. But the Congress has little ability to block the president when it comes to the conduct of foreign affairs (and specifically, the ability to wage war).”
- SupportedThe president has signalled willingness to work with Democrats, but there is a high probability he could lash out, block legislation and take unilateral action against allies or enemies.WA Today - Latest News: “The president has initially signalled a willingness to work with the Democrats, rather than simply vetoing every law they send his way to sign, but it’s impossible to say if this will remain his disposition; there is a high probability he could lash out, block legislation and take unilateral action targeting allies or enemies (or both)”
- SupportedDon Farrell said he hoped the Trump administration would heed messages that Americans dislike tariffs and are angry about the rising cost of living.WA Today - Latest News: “Trade Minister Don Farrell went further in an interview, telling me he was hopeful following the extraordinary result, the Trump administration would heed two clear messages following the electoral rout: Americans don’t like tariffs, and they are furious about the rising cost of living”
- SupportedFarrell said the midterms were the first chance Americans had to vote on Trump’s tariffs and that voters comprehensively rejected them.WA Today - Latest News: “The trade minister said these midterm elections were the first time Americans had a chance to vote on Trump’s punishing regime of tariffs and “when the public had a chance to vote on tariffs, they comprehensively rejected them”.”
- SupportedAustralia accounts for about 60 per cent of lamb imported to the US.WA Today - Latest News: “At present, Australia accounts for about 60 per cent of all lamb imported to the US”
- SupportedFarrell is trying to persuade US counterparts not to impose an additional 50 per cent tariff on Australian lamb, on top of the existing 12.5 per cent tariff.WA Today - Latest News: “Farrell is trying to convince his American counterparts not to put an additional 50 per cent tariff on Australia’s lamb exports.”
- SupportedThe RBA raised interest rates for the fifth time this year amid an inflation challenge linked in the article to the war on Iran.WA Today - Latest News: ““We want that [the war on Iran] to end. It has created the greatest single shock to global oil supply and a huge inflation challenge.” The effects of that inflation challenge were felt once again this week when the Reserve Bank of Australia raised interest rates for the fifth time this year”