The Albanese government is yet to be successful in its attempt to win an exemption from the US President’s massive 25 per cent tariffs on steel and aluminium, despite Australia being the only country not hit by tariffs during Trump’s first term.

But according to the ANZ’s chief economist, Richard Yetsenga, the only question was whether the tariffs impacted Australia’s economy directly or indirectly.

“I don't really have a view about whether the problem will be Australia being tariffed directly, or that we’ll be a small, open economy in a world which is being impacted by tariffs,” Mr Yetsenga said.

“Either way, there's a headwind coming down the pipe.”

The ANZ economist said the current Trump administration was turning out to be “fundamentally different” to his first term, particularly when it came to trade policy.

“The first one did largely focus on China. This one is focusing on trade on a much broader front, and really seems to be viewing tariffs as a revenue raising tool,” he said.

“The problem with that… is if you put tariffs on someone they typically retaliate back in some form.”

Mr Yetsenga said this meant the impact of the US tariffs were likely to be 50 to 100 per cent worse than the impact of Trump’s tariffs alone.

“That's impacting the global economy and reversing globalization,” he said.

“Rather than pushing prices down, it's pushing them up, and rather than pushing growth up, it's pushing growth down.

“That must impact Australia's outlook - I'm not particularly negative on Australia. I think there's enough tailwinds there, but this is a strategic shift we need to keep factoring into the outlook."

The leading economist said it should be taken “as a given” that the US economy would be worse this year as a result of the tariffs.

“Let's look at the numbers. The US is about 25 per cent of world GDP… but because it runs quite a big trade deficit, it's more, its share of global demand is bigger than that. It's closer to 30 per cent,” he said

“So if the US is very much weaker, I think that's a challenge for the world. The question here is to what extent (and) which of Trump's objectives or measures will he really follow through with.”

However the ANZ chief economist suggested Trump might change his approach when his policies start harming the economy.

“He views bilateral trade balances as kind of a fairness measure on trade, and wants to try and balance some of those up. But he also views the equity market as an arbiter on the economy, and he wants that to do well,” he said.

“I don't think he can hit both of those objectives if he follows through on all his tariff commitments. I think he will have a problem with what financial markets in the US signal.

“I think ultimately Trump will prioritise that. He talks about a period of adjustment and the risk of recession. I think if we start to see developments that are genuinely in that direction, and we have some weaker data coming out of the US… I think you'll see Trump start to adjust his tariffs and just step back a bit.”