The Business: ABC Television News – Recession fears
Yesterday, I appeared on The Business – ABC Television News to discuss Trump’s newly imposed tariffs. Taking effect on ‘Liberation Day’, these tariffs have already sent ripples through global markets. Australia, along with the UK, Singapore and Brazil were all slapped with a 10 per cent tariff. China, Australia’s largest trading partner, was dealt a more severe blow with an additional 34 per cent tariff – bringing the total increase to 54 per cent since Trump took office.
Although Australia’s biggest exports to the U.S. (beef, precious gems and metals, pharmaceuticals, and medical equipment), will be directly affected – the main concern is to what extent these tariffs will hurt Australia’s biggest trading partner, China. These tariffs could reduce demand from the Chinese for Australian goods.
However, there are possible upsides to this situation. Chinese goods that otherwise would have gone to the U.S., will instead reroute to Australia at a cheaper cost. This could help to drive inflation down and may even lead to an interest rate cut by the Reserve Bank of Australia (RBA).
You can watch the full segment here: The Business: ABC News – Recession fears
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
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