Australia is positioning itself to take advantage of Donald Trump’s proposed cuts to US government investment in the green energy sector, aiming to attract billions in private capital that might otherwise flow to the United States.
Prime Minister Anthony Albanese, during a week-long diplomatic visit to South America, is promoting Australia as a stable and reliable destination for investment, particularly if the former US president follows through on his climate-related threats.
The Inflation Reduction Act, one of President Joe Biden’s flagship policies, was designed to make the US a leader in clean energy by boosting domestic manufacturing and investing heavily in green technology. However, Trump has hinted that he would repeal this legislation if he returns to office. Analysts suggest that such a move could open up approximately US$80 billion (around AU$123 billion) in investment opportunities for other nations.
Albanese sees this as an opportunity for Australia, emphasizing the country’s wealth in natural resources and its strategic position in the global economy.
“The Inflation Reduction Act has been directing significant capital into the United States,” Albanese said to reporters in Lima, Peru, ahead of the APEC summit. “If those incentives are removed, there will be global economic implications. However, we’re not pre-empting that outcome.”
The Prime Minister is using his South American visit to pitch Australia’s business-friendly credentials to Pacific-rim nations, including China, the US, Canada, Japan, and Indonesia.
“We see Australia as having a significant opportunity in climate action,” Albanese stated. “It’s not just about environmental responsibility, but also about seizing economic opportunities. We have the resources—copper, vanadium, cobalt, lithium—that will drive the global economy in the 21st century.”
Trump’s Influence Looms Over Global Summits
Albanese has held meetings with leaders from Indonesia and Peru, with the looming presence of Donald Trump shaping discussions on trade and global cooperation. As heads of state from the US, China, and Canada converge in Lima for the APEC summit, the impact of Trump’s potential return to the White House is a key concern.
Trump has threatened to impose a 60% tariff on Chinese imports, a move that could send shockwaves through the global economy. As such, leaders at the APEC summit, as well as next week’s G20 meeting in Brazil, are expected to focus on safeguarding global trade and climate goals from potential disruptions caused by a Trump administration.
Additionally, attention is turning to China and whether it might step up its role on the world stage should the US further retreat under Trump’s leadership.
During his meeting with Albanese, Indonesian President Joko Widodo stressed the need for regional cooperation, particularly on trade and military matters, while also highlighting the importance of joint efforts to combat people smuggling. Widodo noted the significance of lowering tensions between China and other Indo-Pacific nations.
Although the US accounts for a quarter of global trade, Albanese emphasized that relationships with China, India, and Indonesia will be just as critical for Australia’s future prosperity.
“As populations in countries like China, India, and Indonesia continue to grow, they will drive global economic growth,” Albanese explained. “Australia is strategically positioned in the fastest-growing region in human history, presenting significant opportunities for the future.”
While Australia has not yet announced a formal meeting between Albanese and Chinese President Xi Jinping, such discussions are expected in the coming days.
“We’ll make announcements at the appropriate time,” Albanese remarked, hinting at the likelihood of talks with Xi during his South American visit.