Kevin Rudd called Donald Trump 'traitor'. Trump says Rudd is 'nasty ...

Kevin Rudd looks set to stay on as ambassador to the United States — at least for now — with the government standing firmly by the former prime minister and the opposition declaring it "hopes" he can succeed with Donald Trump in the White House.

It comes as the federal government grapples with a host of uncertainties about Trump's legislative agenda that could have deep implications for Australia's national security, economy and climate policies when he takes office once again in January.

Mr Rudd's position came under fresh scrutiny on Thursday after he deleted several years-old social media posts fiercely criticising Trump, including calling him a "traitor to the West" and the "most destructive president in history."

His office said he made the comments "in his previous role as the head of an independent US-based think tank" and they were deleted "to eliminate the possibility of such comments being misconstrued as reflecting his positions as ambassador and, by extension, the views of the Australian government."

Still, both Prime Minister Anthony Albanese and Foreign Minister Penny Wong have declared full confidence in Mr Rudd and say they have no plans to move him on.

Some government officials have also praised the ambassador in private, saying he has assiduously courted power players on both sides of the aisle in Washington.

They've also pointed out that Trump has been willing to work with close aides who have previously denounced him — including his vice-president-elect, JD Vance.

Senator Wong called Trump a "pretty robust individual" and declared Mr Rudd had been an "outstanding ambassador and I'm confident will continue to be so".

"One of the hallmarks of his tenure-ship thus far has been his delivery of reforms and changes with the support of both Republicans and Democrats and his ability to work with both sides of the aisle in Washington," she said.

The opposition has mocked Mr Rudd over his posts, with the opposition leader suggesting the "indefatigable" former prime minister would now be "buying red ties [and] MAGA hats" to "ingratiate himself with the Trump campaign".

But the Coalition has not called for him to be recalled. Shadow Foreign Minister Simon Birmingham told the ABC that he "hoped" Mr Rudd would "be as effective as he has been to date".

However, he also warned that the government would have to make a "clear-eyed assessment" in "coming months" on whether the ambassador would be able to continue in the role.

"Kevin Rudd is not bigger than Australia's interests, nor is Anthony Albanese's personal commitment to Kevin Rudd," he said.

In March, Donald Trump called Mr Rudd "a little bit nasty" and "not the brightest bulb" after British politician Nigel Farage recited some of the former prime minister's criticisms during a TV interview.

Donald Trump was asked about Kevin Rudd during an interview with Nigel Farage. (X: GB News)

But it's not clear whether Trump knew who Mr Rudd was during the exchange, with the president-elect also saying "I don't know much about him."

It's not just Mr Rudd who could be haunted by past comments: the government is also keenly conscious of the video that emerged on the weekend showing Anthony Albanese declaring in 2017 that Trump "scared the shit" out of him.

The uncertainty around Trump's attitude towards Mr Rudd and Mr Albanese is mirrored by a broader uncertainty about what the returned president's domestic and international agenda will mean for the nation and the government's legislative agenda.

The government is cautiously confident that Trump is unlikely to tear up the AUKUS agreement that is the foundation of Australia's ambitions to purchase up to five US Virginia-class submarines from the US, before building its own nuclear-powered submarines.

Foreign Minister Penny Wong has also indicated that former secretary of state Mike Pompeo and others in Trump's inner circle back the plan and see it as an important part of US strategy in the region.

Penny Wong has indicated some in Trump's inner circle are supportive of AUKUS. (ABC News: Marcus Stimson)

One federal government source told the ABC that while there were "never any guarantees" with Trump, they were confident that the president would see the logic behind AUKUS.

The government is much less certain about the implications of Trump 2.0 for the Australian economy and its key climate priorities.

The government is hoping it might be able to dodge any direct tariffs from Trump, just as Malcolm Turnbull managed to convince the president to exempt Australia from steel tariffs back in 2018.

But it may be much harder to duck the impacts of Trump's broader economic agenda. If Trump pushes ahead with his plan, it could hit Australia's economy by supercharging inflation.

If he hits China with much larger tariffs — as he has threatened to do — that could spark a major trade war that could leave the global (and Australian) economy reeling.

But the government is also keenly aware that it all depends on Trump's decision-making impulses, which remain deeply unclear — a frustrating reality that economic forecasters and policymakers here will have to grapple with (once again) from early next year.

"There's so many unknowns here. [Trump] said he will do these things. We don't know," Reserve Bank Bank governor Michele Bullock told Senate estimates on Thursday.

"It might not imply a hell of a lot for us."

The government is also worried that Donald Trump's well-known climate denialism and hostility to renewable energy sources could also derail the energy transition in the US and slow it globally — putting pressure on Australia to unveil a less ambitious 2035 target.

But congressional Republican support for the Biden administration's massive renewable energy subsidies — and the projects they support in their districts — may make it hard for Mr Trump to wind back the Inflation Reduction Act in the US.

The federal government source speaking to the ABC said clean energy advocates would be able to make a powerful argument to Trump about the sheer economic force and logic of the global transition — along with its consequences for economic security.

They also stressed there was no chance Australia would follow Trump's lead if he pulled the US out of the Paris Agreement, as he has promised to do.

Foreign Minister Penny Wong was keen to hammer the same theme when she stressed the "economic imperative" of the transition — for both Australia and the world.

"Climate hasn't gone away," she said.

"You know, just as in 2017 Australia stayed the course, we'll stay the course.

"We want an economy that can thrive not just in this world, but in a world which is moving to net zero.

And so many major economies are doing that. We want to be competitive in that world, and that means transitioning our economy, and that's what the government's doing."