Trump’s own goal is our gain

YES, I’m a big geek: I was one of those people who got up at 6am on Wednesday to watch the Trump “Liberation Day” tariff announcement.

Although I did so on my exercise bike – at least the exercise made sense. What a weird display.

Dominating every news bulletin, economists near and far are trying to predict how this changes the global economic order. And I do admit to some sense of satisfaction when watching European politicians squirm. However, what is more important to us is how these global changes will impact Australia. Strangely, as we have only been hit with a 10 per cent tariff, the more I think about this, the better it will be for us.

Interest rate relief

Tariffs will likely create deflationary pressure on everything from cost of goods to wages. It is now predicted this will completely change the RBA’s view of inflation, and we will likely see three or four more interest rate cuts in this easing cycle. For maximum confidence building and impact, I think the next one will need to be bigger, at least 0.50 points, this will give all of us mortgage holders much-needed relief.

Cheap stuff

Expect to start seeing Chinese car dealerships opening next to traditional Ford and Toyota. Cheaper electric vehicles to rival Tesla are coming onto our streets, and they are pretty good to drive. Our retail markets will be flooded with items manufactured in Europe and Asia, and increased supply will put downward pressure on all pricing. Effectively, goods that were destined for the US will be re-routed to alternative markets with no tariffs, such as Australia. Who doesn’t like paying less for stuff? The only negative impact will be on goods produced or manufactured here, but we had stopped doing that a long time ago.

Decreased competition for commodities

The US is one of our biggest competitors in Europe for agricultural goods such as wheat, barley, and protein. Europe responding with reciprocal tariffs on US imports will make our products more competitive and cheaper than US products. I expect demand for our produce to lift and new markets worldwide to open up. That’s great for our region, our farmers desperately need good news. Let’s cross our fingers for rain in south-west Victoria.

Property recovery

Property will benefit on several levels from Trump’s “mandated” stubbornness – their loss, our gain. As the world isolates the US and enters a period of uncertainty, history has shown that investors will look to Australian property assets as a secure and safe haven to invest their money in. In the US, inflation is likely to go rampant, contrary to what will happen here, and that will mean the US dollar will decline in value. As their money becomes less valuable, tangible assets like property become attractive, especially those in safe, democratic, financially stable countries like ours.

This is our chance to start building. Australia should now tell investors worldwide to invest in Australian property development, build the houses we desperately need, and protect the value of their investment. Across the country, development has stalled in the past three years as construction prices soared. We have just been gifted the shot in the arm we need. If wise, we could use this international cash to build, build and build, baby.

On a local level, and more immediately, I expect a full return of confidence in our property markets. Substantial interest rate cuts will bring back an easing of life’s stresses. More money will be available for discretionary spending, hospitality and retail will get some welcome relief, and suddenly that second coffee becomes affordable again.

Love or hate Trump, he has just given Australia an absolute free kick. Just be happy we are in little ol’ Oz and primarily sheltered from the global economic fallout that is about to hit Europe and Asia.

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