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With the US election in the imminent future — November 8th to be exact — it is important for us to look into the potential effects a Trump Presidency could have on the Australian economy, given that he has some very strong views on how the US is handling immigration, talking about building a wall between the US and Mexico and making waves with the Chinese.

Australians view themselves as having peaceful multiculturalism and seeing as we are allied with America via Trade and Military, we need to ensure that we are kept up to speed with the Presidential Views, Policies and Values.  

We have sourced this article for you view with information from the industry experts.

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How will a Trump Presidency affect Australia?

As reported by Gavin Fernandez from news.com.au

It is coming up to the quadrennial Presidential election in the USA on the 8th November 2016, and the debates are getting more and more heated as the gap between the expected outcome gets narrower and narrower. But how will the outcome affect Australia and the Australian Economy? Lets ask the experts.

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Kim Beazley – Australia’s former ambassador to the United States – noted at lecture in April that a Trump presidency would cause substantial problems in relations with China and sink the Trans-Pacific Partnership trade agreement. He also said “it would be an absolute disaster in our region”.

David Smith, a senior lecturer at the University of Sydney’s United States Studies Centre, told news.com.au the fact that Trump is going after China could hurt Australia. He warned, for example, that Trump’s plan to go after a 45 per cent tariff on imported Chinese goods could lead to a trade war.  “If there was any further slowdown in the Chinese economy, that would hurt Australia,” he said. “As would any further slowdown in the US economy.” He also said that if a trade war between the US and China was to broaden out, and become political or militant, it could put Australia in a very awkward position.

Dr Adam Lockyer, a lecturer from Macquarie University spoke to news.com.au. “Trump has been quite bullish in his comments towards China,” Dr Lockyer told news.com.au. He said things are getting increasingly tense between the two, which could have repercussions for Australia. “Australia’s position is we don’t want to choose,” he explained. “As soon as we’re forced to make a choice, we lose. The guiding principle of Australian foreign policy is ‘Don’t choose between the US and China’. Doing so will either affect our security or our economy – or both.”

It’s looking less and less likely as time goes on, but we have been thinking a bit about what might happen in the markets if Donald Trump were to be elected President of the USA

He hasn’t exactly inspired investors, and indeed the markets seem to be reacting positively as his chances of being elected diminish. But are they making a mountain out of a molehill? A good place to start is by looking at another big political event in 2016, Brexit.

When Britain voted to leave the European Union in June this year, the markets were sent into panic mode. We saw the markets fall, then for a relatively short period, movement up and down, as investors decided how they felt about Brexit. After this period, everyone seemed to realise that Britain wouldn’t leave the European Union any time soon, that a Brexit takes time, and that the world wasn’t really burning down. The markets settled back and even rallied higher than the pre-Brexit levels and calmness was restored.

Why is this important?

Whilst Donald Trump becoming President would certainly cause some uncertainty, it is unlikely that he will be able to dramatically affect the USA or business, as many seem to predict. He does not have control of congress, he does not have support of much of his own party and as President Obama found out, it is difficult to enact significant changes or allocate funds for new projects – such as building a wall between Mexico and USA – with this dynamic.

 

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