Trump: the ripples that reach all sectors
Australia is the world’s 12th largest economy and a key player in global affairs, especially in the Asia-Pacific. So when Donand Trump whips out his black Sharpie, it pays to be looking over his shoulder. Here are some of the areas commanding our attention.
THE ECONOMY
A survey of 39 experts by the Economic Society of Australia found that among the most certain outcomes of the Trump Presidency were high US inflation (expected by 71 per cent), weaker Chinese growth (66 per cent) and weaker Australian growth (58 per cent).
Other outcomes included weaker US economic growth, and higher US interest rates (as a counter to high inflation), each expected by 32 per cent.
DEFENCE
Australia’s strategic alliances with the US, including AUKUS, are seen by most analysts as unlikely to change.
But Trump has demanded Australia lift defence spending to 3.5 per cent of GDP, an extra $40 billion a year. We currently spend about 2.0 per cent, with plans to increase it to 2.33 per cent over the next eight years.
DIPLOMACY
Australia’s challenge is to find common ground with the US on key issues, while promoting our own interests. We supported the US attacks on Iran’s nuclear facilities, but called for “diplomacy, dialogue and de-escalation.”
PM Albanese’s planned first meeting with Trump at the G7 was cancelled amid the Iran crisis, with the next chance said to be India in early September.
TRAVEL
Travel to the US has slumped, Australian visitors down 7 per cent in the year to March. Germany was down 28 per cent, Spain 25 per cent, UK 18 per cent, South Korea 15 per cent. In total, inbound tourism was down 11.6 per cent.
“We’re hearing more and more people don’t want to go through passport control,” Flight Centre CEO Graham Turner said at the time.
Reasons include aggressive border tactics. Travellers have had digital devices checked without good reason, some refused entry for having anti-Trump posts or joke memes.
HEALTH
Trump has threatened a 200 per cent tariff on pharmaceutical imports, trade currently worth about $2.2 billion a year to Australia. Avoiding or easing the tax would mean shifting production to the US or weakening our Pharmaceutical Benefits Scheme. Canberra, so far, has said the PBS is “not on the table.”
The Trump administration also announced savage cuts to public health including Medicaid, the Centers for Disease Control, and the National Institutes of Health, which funds research at several Australian laboratories.
FOREIGN AID
Trump also announced plans to quit the World Health Organisation (WHO) and freeze USAID funding.
Those agencies are a lifeline for millions of people, especially in Africa and the Asia-Pacific, fighting diseases like HIV, TB, malaria, polio, and managing outbreaks of Ebola and COVID-19.
USAID had a budget of US$50 billion, while the US was WHO’s biggest state donor, contributing up to 18% of funding.
Australia has pledged $100 million to WHO from 2023-27. It might be that we, and other nations, will now be urged to contribute more.
