Many business owners are keen to know how the policies of US President-elect Donald Trump could impact the Australian economy. Some believe there may be hidden benefits.
While the rhetoric during the election campaign was at times controversial and even concerning, some are suggesting that the incoming president could actually bring benefits for not only his own country, but ours too.
Economist Christopher Joye believes the Trump presidency could turn out to be “very positive” for Australia.
“The instantaneous reflex to judge Trump on the highfalutin sort of hyperbolic rhetoric during the campaign is a mistake. I think he is a very serious businessman and I think he'll approach the White House in the same way,” says Christopher.
“Trump is really the pure American profit maximiser. He was a very successful multi-decade entrepreneur and property developer.
“Our view has been that there's quite a material difference between the campaigning Trump and President Trump. And President Trump will be much more the money maker and focused on maximising economic growth.”
While that may be the case in the US, what does it have to do with Australian businesses, you may ask.
According to Christopher, this high-spending, business-friendly economic approach will stoke inflation and interest rates in the US, which will in turn influence our exchange rate.
“The biggest positive, actually, when you think about it, is the Aussie dollar. The Aussie dollar has gone from 78 US cents pre-election to [at the time of recording a week after the election] trading at 73 US cents,” he explains.
“Now that is a tremendous tidal win for all exporters and also for all import competing industries. Tourism, education and so on and so forth. And as those businesses thrive, the businesses servicing them thrive as well. I think then that's positive, and the reason that the Aussie dollar is falling, to be clear, is because US interest rates are rising.”
Another win for businesses could be a shift away from the increased regulation we have seen since the GFC.
“Another interesting dynamic here is you [will] now have a leader of the free world who is unashamedly a massive advocate for business. So he wants to cut corporate tax rates in the US, he wants to cut marginal tax rates [and] he wants to deregulate aggressively the entire economy,” says Christopher.
“When you've got the US President constantly looking to support business, I think that could actually bleed into Australian politics.”
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