What does a second Trump Presidency mean for Australian businesses?
Well there you go – did you wake up yesterday with a bit of déjà vu, feeling like its 2016 again?
Back then, many of us were totally shocked at the idea of Donald Trump being president – what would that mean for the world? This year, perhaps there’s not quite as much shock as there was in 2016, but we are still left to wonder what a second Trump presidency will mean for all of us in Australia.
For those of us who work in, and work for, small and medium businesses here in far away Australia, it can be tempting to think that we won’t be impacted. But as the old saying goes, if America sneezes, Australia catches a cold. Mr Trump also does things very differently from your typical politician, and one-way-or-another, there will be impacts for the Australian economy as a whole.
American Isolationism?
Trump has built a lot of rhetoric around protecting American jobs, especially in industries like manufacturing. That likely means tariffs – which has at least some impact on Australian exports. As an island nation that generates a lot of its wealth from exports, Trump’s policies will therefore likely impact our economy. This policy will also probably see larger budget deficits in America, which in turn could effect global exchange rates and banking systems.
It’s fascinating; had the Democrats instituted these protectionist policy it would have been called “welfare”, but under Trump, it’s “patriotism.”
A Trade War?
Trump has also been vocal in his opposition to the growing influence of China. He has threatened 60% tariffs on Chinese imports, a move designed to hurt the Chinese economy. A weaker Chinese economy could also have a negative impact on Australia’s exports. Increased tariffs by America could also see other countries raise their tariffs, making global trade more difficult.
Sustainability and Renewables?
Its fair to say that Donald Trump is not as interested in a net-zero agenda as many other world leaders. Investments in renewables, clean energy and sustainability are likely to be scaled back, put on hold or diverted to other parts of the world such as Europe and Asia. However Australia’s resource industry leaders (and their suppliers) may see this as an opportunity.
Geopolitics
Even a passing glance at the news (at least the last year or more) will tell you there is plenty of turmoil in the world (think Russia, the Middle East, North Korea). It is unclear how Trump’s political style will impact this already volatile situation. Apart from the threat of the escalation of war, strained diplomatic relationships can also mean delays in global supply chains, which is not good news for the cost of living. However, the other possibility is that Trump takes a direct and decisive approach that de-escalates the conflicts, however this currently remains to be seen.
Mr Trump has famously been unpredictable, and there’s certainly nothing to suggest this will change! While we hope for peace and stability, Australian businesses can likely expect changing conditions in the near future.
We’re here to help your business navigate these uncertain waters and make the most of emerging opportunities.
If you need guidance or support to prepare for what’s ahead, please contact us – together, we’ll ride the wave into the future and empower your business success.