How the Trump Effect impacted the elections in Canada and Australia

US President Donald Trump recently celebrated one hundred days in office. This has been a period of dizzying change, with dramatic new developments almost daily. Much of the focus has been on Trump’s tariff policy, which has sent financial markets on wild swings and raised fears of a global trade war.

Trump’s tariff policy and divisive rhetoric has also been a significant factor in the recent elections in Canada and Australia, two of the United States’ closest allies. Canadians went to the polls on April 28, 2025, and Australians followed suit just six days later, on May 3, 2025.

Although Canada borders the US and Australia is 9,000 miles away, there were a number of interesting parallels in the two election campaigns and the outcome.

In both Canada and Australia, the conservative opposition enjoyed a comfortable lead in the opinion polls over the center-left government until January 2025, when Trump took office as president. Trump’s tariffs on Canada and Australia caused deep resentment in both countries and hurt the popularity of the opposition leaders, who had styled themselves after Trump. The governing parties easily won the elections and when the dust settled, both opposition leaders shockingly lost their seats and found themselves out of parliament. Let’s take a closer look at the impact Donald Trump had on the elections in Canada and Australia.

Prime Minister Justin Trudeau’s Liberal Party had governed Canada since 2013, but was in deep trouble in early 2025. Pierre Poilievre’s Conservatives had been leading in the polls for months and at the start of 2025 had a massive 27-point lead, which appeared insurmountable. Trudeau resigned on January 6, 2025 and Mark Carney, a former central banker at the Bank of Canada and Bank of England, took over as prime minister in March. Carney called a snap election for April 28, 2025.

Donald Trump took office as president on January 2, 2025. Trump quickly announced tariffs on a worldwide basis, including 25% tariffs on most Canadian goods. Trump then made comments that the US should annex Canada as the 51st state.

Trump’s threat to annex Canada and the imposition of tariffs hit a raw nerve among Canadians, who felt angry and betrayed. Canada has historically been a close ally and partner of the US, and their economies are intertwined, with a free trade agreement in place since 1989. Canada reacted to the US tariffs by imposing counter-tariffs, and there has been a mass boycott of US products and a sharp drop in travel to the US, which was further fueled by Trump continuing to say he would annex Canada.

The short Canadian election campaign was held as anti-US sentiment was growing. Conservative leader Poilievre, who had styled himself as a right-wing populist and even used the slogan “Make Canada Great Again”, saw his popularity plummet as Trump had become public enemy number one. Prime Minister Carney, who had no prior political experience, rode the wave of anti-Trump sentiment and won the election, with the Liberals winning 169 seats and the Conservatives 143. The Liberals came up just short of a majority and will have to form a coalition with one of the smaller parties. Poilievre not only saw his massive lead in the polls evaporate, but lost his own parliamentary seat.

Donald Trump was not on the ballot, but nevertheless became the dominant factor in the election. Canadians were looking for someone to protect them from Trump, and Carney fit the bill. Perhaps winning the election was the easy part for Carney, who constantly attacked Trump as part of his campaign. Now, Carney will have to work with the US president to repair the ruptured relationship between the countries, while at the same time standing up to any threats to Canadian sovereignty.

Canada can ill-afford to have a protracted trade war with its giant neighbor, as Canada’s economy is simply too dependent on the US. Canada’s economy is deeply intertwined with that of the US, with 70% of Canadian exports going to its southern neighbor.

Prime Minister Carney didn’t waste any time and headed to the White House to meet with President Trump on May 6, 2025. Trump again brought up the sensitive issue of annexation, and Carney was polite but forceful, stressing that Canada would never be “for “sale”. Trump also said that US tariffs on Canadian goods would remain in effect.

The face-to-face meeting was held in a positive tone despite growing tensions between Canada and the US and the unpredictability of Trump. Carney defended his position and his strong performance reassured investors, and the Canadian dollar rallied with gains of 1%.

Investors are pleased that political stability has been maintained with Carney’s win, which bodes well for the Canadian dollar. A Conservative victory would have raised uncertainty in an already turbulent period and could have weighed on the Canadian currency.

Similar to the situation in Canada, Prime Minister Anthony Albanese’s centre-left Labor Party was unpopular in late 2024. Peter Dutton, the head of the right-wing Liberals, had held a wide lead in the opinion polls for six months. Taking a page out of Trump’s textbook, Dutton adopted right-wing policies such as promising tougher immigration laws and establishing a platform to reduce the waste of public funds.

When Trump took office, he imposed 10% tariffs on all Australian goods. Like Canadians, Australians were hurt and angered by the tariffs, given the close relationship between the two countries. PM Albanese criticized the tariffs but was careful not to impose retaliatory tariffs, which would have complicated his relationship with Trump if Albanese won the election.

Dutton was unable to shake off the label of being a Trumpist, and Albanese capitalized on the anti-Trump sentiment among voters and leaped in the opinion polls. Albanese ran a strong campaign and struck a receptive chord by distancing himself from Trump while also focusing on domestic issues such as health care and housing. The election campaign was overshadowed by Trump, although not to the same extent as in Canada.

The Labor Party won a resounding victory in the Australian election on May 2, 2025. Labor increased its majority and trounced the conservative Liberal Party opposition by 88-40.

Labor’s decisive election win briefly sent the Australian dollar higher, with AUD/USD rising to a five-month high two days after the election. The markets were optimistic that political stability would be maintained following the election. Labor increased its majority in parliament and was expected to continue its policies.

After appearing to be on the cusp of becoming prime minister, both Pierre Poilievre and Peter Dutton, who had adopted some of Trump’s policies, faced the wrath of voters who were upset with Trump’s tariffs and rhetoric. Both opposition leaders saw their lead in the opinion polls evaporate and faced humiliation by losing their seats in parliament.

President Donald Trump was not on the ballot in the elections in Canada and Australia, but he was nonetheless a significant factor, especially in Canada. Trump’s policies and rhetoric are likely to continue shaping global politics, as the “Trump Effect" will continue to play a role in elections around the globe.