Mr Albanese is on a collision course with Mr Trump on defence funding after the US President warned Spain’s Pedro Sanchez – who has refused to lift military spending above 2.1 per cent of GDP – that his country faces higher tariffs for free-riding off America.

The threat stands as a warning to Australia as the nation’s total government interest bill comes close to exceeding the defence budget for the first time, crimping its ability to meet growing costs across the board.

USSC Senior Economics Advisor Dr John Kunkel was quoted in the article saying that the writing had been on the wall that Trump may link tariffs to Australia’s defence spending commitments.