There are over 15,000 km between the USA and Australia, yet financially the two countries are much closer together. The United States, along with Japan and China, rank among Australia’s top three, two-way trading partners. The US is also one of China’s top trading partners, with China being the largest export economy in the world. If something big happens in the United States, the rest of the world feels it. Trump’s victory in the 2016 Presidential Election is one of these events, which have sparked questions about its potential effect on our economy.
Will Trump Hurt or Help Australia’s Economy?
The big question on investors’ minds is: will Trump hurt or help our economy? He has presented some extreme views and ideas for the future of the US, some of which could influence investments.
It’s impossible to see the future, but we can take a look at how things seem to be going. And so far, there isn’t anything that’s shown up on the horizon to prove that Trump will have any significant or lasting impact. In fact, it seems unlikely that Trump will accomplish many of the things he claims he will do as president.
Watching Trump and the Market
While there is nothing definite in sight right now to indicate that Trump will cause upheaval in the Australian market, every investor should watch carefully. The unexpected can happen, as we observed with the election results.
It’s also important to remember that if Trump doesn’t accomplish all his goals, even half of them could lead to an upset in the economy. The fact he is the elected leader of the country that has the largest economy on the planet was enough to cause Australian currency value and local indexes to shift. Based on what we know now, there are a few things we are likely to see as Trump’s term progresses:
- A push for revisions to existing trade agreements
- The US taking a more isolationist role in the world
- Additional trade protections for US investors and businesses
- Lower taxes for individuals and businesses
- Stronger immigration legislation
- US Federal Reserve raising interest rates due to demand from tax cuts and public spending
The Jury is Still Out on Trump
It’s still very early in the game for the Trump presidency. No one knows what is in store, especially considering the unpredictable nature of his campaign. Experts have different views and opinions of what Trump will bring. The best thing to do during times of uncertainty is to make sure you are planning for your financial future, with the advice of your trusted accountant.