Former federal treasurer and Australian ambassador to Washington Joe Hockey predicts a "rocky time" on global currency markets as both US presidential candidates embrace destabilising high-debt, deficit and tariff policies.

"If half of what Donald Trump is promising is implemented, or if what [Kamala] Harris is promising is implemented, America's economy is going to have substantial and significant structural problems," Mr Hockey told the National Press Club on Thursday.

Mr Hockey, who now runs a consultancy for businesses seeking to trade between the US and Australia, said he expected the US dollar to weaken under either leader, particularly under Mr Trump because of policies such as his vow to raise tariffs on all Chinese imports to 60 per cent of their value.

"It is singularly the worst election campaign in living memory for anyone that cares about economics. It is ground zero in terms of making promises that are unfunded and probably cannot be delivered," Mr Hockey said.

He said with both Democrats and Republicans "absolutely hell-bent" on big tariffs, "what happens in America right now represents the greatest sovereign risk for business and for countries around the world".

Mr Hockey said the impacts of America's shift towards protectionism had global ripples, including in Australia where the Albanese government was forced to adopt domestic made-in-Australia policies in response to President Joe Biden's Inflation Reduction Act, which squeezed out Chinese-made EVs.

That forced China to dump electric vehicles in Europe, where Volkswagen and others are now closing down plants.

"Tariffs in the US, domestic policies in the US, tax policies in the US, immigration policies — they all have a profound impact in Australia and the rest of the world."

Mr Hockey also told the National Press Club he had told the Republican directly that his "policy platform is absurd in its largesse".

"He can't keep spending. I mean he ran massive deficits … to the extent that today America's interest bill is bigger than what it spends on defence right now," he said.

Hockey's warning to keep more AUKUS money onshore

In a wide-ranging presentation, Mr Hockey also cautioned against losing public support for hundreds of billions of dollars in AUKUS and other military spending if the money only goes overseas.

While Australia has many smaller companies involved in national security, they are largely starved of capital, unlike in the US and Europe where large-scale "prime" defence-industry giants like BAE help fund innovation and promising start-ups.

"We're one of only two or three countries in the world that hasn't got a major defence prime in the top 20," he said.

"I have been adamant and continue to be adamant that if AUKUS and all these other things are just Australian taxpayers writing out a cheque to America or Britain, then you'll soon lose public support.

US election winner too hard to tell

On the US election, Mr Hockey said the outcome was still too difficult to predict, and said there is a scenario in which both candidates were tied in the Electoral College vote.

To clinch the White House, he said, Ms Harris needs to win the popular vote by at least 2.5 per cent.

Despite her current momentum, the vice-president is still to differentiate herself from Mr Biden.

Mr Hockey said that would make it difficult to convince "Mary Milwaulkee" — average, low- and middle-income conservative voters who could decide the election.

"My residual concern for the Harris campaign is that she still remains too much of a mystery to Mary Milwaulkee," he said.