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Analysis-Australia election win seen strengthening Albanese's hand with US
Published by Global Banking & Finance Review®
Posted on May 4, 2025
5 min readLast updated: January 24, 2026
Global Banking & Finance Review®
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Published by Global Banking & Finance Review®
Posted on May 4, 2025
5 min readLast updated: January 24, 2026
Australia's election win enhances Albanese's US relations, expanding Labor's majority and focusing on global challenges and alliances.
By Kirsty Needham
SYDNEY (Reuters) - Australian Prime Minister Anthony Albanese is likely to work more closely with centre-left governments in Britain and Canada, as well as other democratic allies, after a resounding election win strengthened his hand in dealing with the U.S., analysts said.
Albanese's Labor Party rode a voter backlash against the policies of U.S. President Donald Trump to a come-from-behind victory that expanded his parliamentary majority, echoing the reelection win a week ago by Canada's ruling party.
After his cabinet is sworn in, Albanese is expected to visit Washington for discussions on U.S. tariffs and defence matters, while also working with Asian and European nations to broaden export markets and defence cooperation, hedging against U.S. reliance.
Albanese had presented himself to voters as a safe pair of hands amid global turmoil, in contrast to conservative opposition leader Peter Dutton, who was compared to Trump, former strategists for the opposition Liberal Party said in assessing their loss.
Treasurer Jim Chalmers said on Sunday there were global challenges ahead for the returned government.
"People recognised if you want stability while the global economy was going crazy then a majority Labor government was the best way to deliver that," he said in an interview with the Australian Broadcasting Corporation.
Chalmers said his immediate focus was global economic uncertainty, particularly the impact of tariff tensions between the United States, Australia's main security ally, and China, its largest trading partner.
The Labor Party is projected to increase its seats in parliament, strengthening Albanese's position in dealing with the White House, analysts said.
"When the world's most powerful country appears erratic and unreliable, it makes sense to diversify your relationships," said Lowy Institute Executive Director Michael Fullilove, who expects Australia to strengthen ties with Canada, Britain, and other democracies in Europe and Asia.
"None of these countries can replace the United States as Australia's great security ally, however," he added.
While Trump's policies are not popular in Australia, Lowy Institute polling showed 80% of Australians regard the U.S. alliance as important for security.
Noting that Albanese has not yet met Trump in person, Fullilove said: "It's hard to think of two leaders who are more different from each other."
An Australian Electoral Commission count, which is continuing, shows Labor has won at least 82 seats out of 150 seats, increasing its majority in the House of Representatives.
"It's important to have a majority government when dealing with Australia's principal ally, the United States," said Arthur Sinodinos, who was Australia's ambassador in Washington when the AUKUS nuclear submarine treaty, Australia's largest-ever defence project, was negotiated.
Albanese needs to travel to the United States soon to talk with Trump about trade and defence, said Sinodinos, now a Washington-based partner with The Asia Group think tank and a former Liberal minister.
"Trump works on the basis that he likes winners," he added.
Albanese had not attended Trump's inauguration because it was likely to draw criticism from voters for not putting domestic priorities first, and had been careful not to criticise Trump personally in the election campaign, Sinodinos said.
"He talked more about the Americanisation of policy. That was clearly meant to send a coded message to the electorate," he added.
Unlike the conservatives, Labor had resisted pledging to increase defence spending during the election to 3% of gross domestic product after a request by Washington, saying it had already committed to A$50 billion more over the next decade, reaching 2.33% of GDP in 2033-34. Albanese said during the campaign that defence spending could increase if strategic circumstances demanded.
Albanese said on Sunday the first leader to call to congratulate him was Papua New Guinea leader James Marape.
Australia has significantly boosted aid and security ties with its northern neighbour to deter China from gaining a policing role, as Beijing expands its security presence in the Pacific Islands region.
Leaders in the Pacific Islands, one of the world's most aid-reliant regions, have been rattled by Trump's dismissive stance on climate change, which they regard as an existential threat, and dismantling of the U.S. Agency for International Development.
Albanese said he also received personal messages from British Prime Minister Keir Starmer and French President Emanuel Macron, and was scheduled to speak on Sunday with the leaders of Indonesia and Ukraine.
"We will continue to back Ukraine," he said.
Albanese had participated in video meetings of the British-led "coalition of the willing" and previously said Australia could provide unspecified support to Ukraine.
Ukrainian President Volodymyr Zelenskiy wrote on X on Saturday evening that he appreciated Australia's "principled stance on ending Russia's war".
Canada's Prime Minister Mark Carney wrote on X: "In an increasingly divided world, Canada and Australia are close partners and the most reliable of friends."
(Reporting by Kirsty Needham in Sydney; Editing by Edmund Klamann)
Albanese's victory is expected to strengthen his position in dealing with the US, enhancing Australia's relationships with democratic allies.
Treasurer Jim Chalmers highlighted global economic uncertainty and tariff tensions between the US and China as immediate challenges.
Analysts believe that a majority Labor government will provide a more stable framework for dealing with the US, Australia's principal security ally.
Leaders in the Pacific Islands are concerned about climate change, viewing it as an existential threat, especially in light of Trump's policies.
Albanese received congratulations from Papua New Guinea leader James Marape, British Prime Minister Keir Starmer, and French President Emmanuel Macron.
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