What will Trump mean for Australia?

Trump’s election campaign had many focus areas with some radical ideas and all eyes will now be on which of these come to fruition. So, what will Trump mean for Australia? To a large extent, it will be business as usual. Some areas may be impacted more so than others, check out our summary below of potential impacts:

Trade

According to DFAT, USA is ranked 4th in total exports from Australia, behind China, Japan and South Korea. Further, the Australian dollar value of exports to the USA are around one fifth of those to China. When imports are taken into consideration, the USA is our third largest trading partner.
Overall, Donald Trump’s policy to limit foreign trade is likely to have limited impact on Australia’s total exports. The beef industry would be the hardest hit if the USA was able to substantially reduce their imports. Donald Trump also intends to withdraw from the Trans-Pacific Partnership (TPP). This withdrawal could see the entire agreement crumble. However, given the complexities of the TPP and its implementation, combined with the fact that it is not as yet finalised it is difficult to estimate the impact this would have either way.

Migration

Donald Trump has indicated a desire to reduce immigration to the USA significantly. Although the USA has a relatively low refugee intake, this will put a greater humanitarian strain on the rest of the world.

International relations

The greatest concern, and potential impact on Australia, is the broader stability of the Asia-Pacific region and that of the world as a whole. Trump has indicated he would not support US military being spread over much of the globe, and has been less than generous in his commentary regarding China, our largest trading partner. Whether these comments will be backed up with action, particularly given the moderation of his commentary as displayed in his acceptance speech, we don’t know, but Australia will inevitably be stuck in the middle trying to appease both sides for our own good.

Share market

Whether we like it or not, the Australian share market and associated sentiment is linked with that of the USA. If Trump manages to deliver a stronger US economy and share market as promised, this would inevitably benefit the Australian share market.

Conclusion

One of the things on Trump’s side is the fact that the Republicans hold both houses of parliament, so legislation should pass without too much issue. Whether he is able to moderate his views and bring the rank and file Republicans back on side remains to be seen.
The biggest point to be taken from all of this is that Trump is a total unknown. He has no political experience, has demonstrated previously that he doesn’t much care for many of the political niceties, and has no problem speaking his mind, even when a filter may be appropriate. That being said his acceptance speech demonstrated a moderation of his views, so we are none the wiser as to how he will lead. The coming months will be interesting.