I did three years of economics and have run businesses, the biggest and most successful of which was an importer and distributor of software from the US in the 80s and 90s. so whilst I don’t profess to being an expert, I do understand the systems at work in the current climate.
With Trump, there is no way anyone can deal with it as it is impossible to deal with anyone who has no idea what they are playing with, or the real consequences of their own actions. To be able to handle that sort of situation as a 3rd party, you need to know what the possibilities could be of any action that is a reasonable one, and with Trump that just cannot be done. He has proven his unpredictability time and time again.
This is why Dutton suggesting Albanese should have gone direct to Trump and have a cozy fireside chat is a rubbish idea. Backing that up is that even those countries that did send a head of government were told in no uncertain terms to sod off.
Placing these tariffs on Australia, which has a trade balance which BENEFITS the US is stupid. Trump has to prove and show he is the Big Man, and likes to throw his weight around and watch people squirm. Everyone has to have a hobby I suppose. But he reminds me of the bully in the playground when there is no-one physical to harass and resorts to pulling the wings off flies and watch them die to get their current jollies.
You could see with the Zelenskyy meeting that Trump actually enjoyed being what he thought was the ‘heavy’ in the room. He got a kick out of it, and JD Vance joined in as he is cut from the same cloth and thought it looked like fun.
In the real world in the long run, I suspect tariffs on Australian steel and aluminium won’t really affect Australia at all. All it does is up the price in the United States of Americaland if they choose to buy – and of course Trump’s supposed aim is to have all this stuff home grown and in his tiny mind this will then be cheaper.
But he has no conception of the time frame and costs in re-creating a locally based steel and aluminium industry to match the scale of current imports. This is proven with his tariffs placed on cars imported from Canada. US models are made there as they can be built cheaper than in the US and already, companies such as Ford and General Motors have said to retool to make them back in the US would take at least 4 years and USD$6 billion PLUS USD$1 billion per factory.
In terms of steel and aluminium, I am sure that companies such as Bluescope are already putting bodies on the ground in emerging nations such as India to suss out new customers and will use these to fill any gaps caused by the loss of US sales. That is smart business to do so – or in layman’s terms, don’t put all your eggs in one basket.
The one thing I am waiting for is the moment when someone in Trump’s cabinet gets the smart idea that there are REALLY big bucks to be made with tariffs on software services and apps – because as sure as hell, he could never work that out himself.
And which country has the biggest export in this area to the US? Ireland. Every ad bought in the US on Facebook, every app bought for an Android phone for example generates money sent to Ireland. But effectively that ad or app is an import if it is a US buyer.
Additionally, there is also Microsoft and Apple among others – maybe even ‘X’. Would Trump dare touch companies such as these that are as American as apple pie but in his mind, could raise some serious loot (of course we all know it won’t as the user pays, but I think everyone has given up trying to convince him of that, as basic an economic term as you can get that it is).
This would also put companies Aussie companies like Atlassian and Canva in the firing line of course, as their revenues are not exactly peanuts. So I’d be keeping my head down in the short term if I were them.
Many years ago I was involved in motor racing sponsorships and the like in Australia, and the marketing manager of a major Chinese company who had just started in Australia and was using motor sport as a small springboard told me the Chinese don’t plan for next week, or next month or even next year. They plan for decades and even centuries in order to get done what they achieve.
Trump cannot plan for the next 24 hours as we have seen, and this is why I believe he will fail spectacularly and sooner rather than later. And the smart money is on those biding their time and have thought the whole thing through and made contingencies. Now is not the time for knee jerk reactions.
We live in interesting times.
