Mr Trump has announced a 25 per cent tariff on products from Canada and Mexico, causing both of those nations to promise retaliation with levies on US imports.
The move has sent the Australian share market and dollar plunging as the trade wars hit global bourses.
Chinese products were also hit with a blanket 10 per cent tariff, but it is yet to respond.
Foreign Minister Penny Wong, who recently met her US counterpart Marco Rubio after Mr Trump's inauguration in Washington, noted Australia had a trade surplus with the US and said her department would try to ensure no tariffs were imposed.
Foreign Minister Penny Wong met US Secretary of State Marco Rubio in Washington. (AP PHOTO)
"President Trump is implementing the agenda he said he would ... obviously that's going to affect global markets," she said on Monday.
"We understand that and we also understand that we best approach this by our close engagement with the United States."
UNSW economics professor Richard Holden said the integrated nature of global supply chains meant Australia could still be impacted by the Canada and Mexico levies.
"Already Canadian and Mexican leaders have said they won't take this lying down and there could be retaliation … if we get into tit-for-tat retaliation, that has the potential to really impact international trade," he told AAP.
"It's tempting to think they're not on us and there would not be much impact (but) parts that have passed through the US can very easily wind up in Australia, that could see higher consumer prices and higher production costs."
Mr Trump has framed the tariffs on Canadian and Mexican imports as leverage, demanding action to stop illegal immigration and fentanyl shipments.
But Professor Holden said the unpredictable president was capable of turning his sights on Australia.
"We could be next … Australia isn't responsible for America's fentanyl, but who knows," he said.
"Penny Wong, or (US ambassador) Kevin Rudd might say something seemingly sensible and Trump will react how he reacts."
Betashares chief economist David Bassanese dismissed speculation the tariffs would drive global inflation and threaten a likely Reserve Bank interest rate cut.
"Though a trade war is potentially inflationary to the extent the Australian dollar weakens further, more than likely offsetting this risk for the RBA are new downside concerns with global and local economic growth if the tariff fight escalates," he said.
Talks between Malcolm Turnbull and Donald Trump helped Australia avoid tariffs in the past. (Yuri Gripas/AAP PHOTOS)
Australia avoided tariffs under the first Trump administration after then-Liberal prime minister Malcolm Turnbull negotiated an exemption.
It's a yardstick the opposition is using to determine how successful the US relationship is managed under Labor.
"You need to be able to show that you can have a working relationship with this administration and that is something the coalition has done previously," shadow attorney-general Michaelia Cash said.
Monash Business School associate professor Nathan Eva predicted minimal impact for the Australian consumer and said some businesses could even reap the rewards.
"I was heartened to hear Penny Wong saying the Australian government has known this is coming, they've been planning for this, none of this has caught them by surprise," he said.
"I'm hoping all Australian businesses are the exact same … it just looks like there are so many opportunities for Australian businesses who already are selling into Canada to increase the amount of exports that they have."
