1 00:00:05,240 --> 00:00:07,960 Sean Aylmer: Welcome to the Fear and Greed Business Interview. I'm Sean Aylmer. 2 00:00:08,080 --> 00:00:13,080 Sean Aylmer: Donald Trump's tariff's announcement yesterday has rocked global markets. Australia 3 00:00:13,160 --> 00:00:15,800 Sean Aylmer: is certainly at the lighter end, with a ten percent 4 00:00:15,880 --> 00:00:18,800 Sean Aylmer: impulst on our exports to the US compared to the 5 00:00:18,840 --> 00:00:23,239 Sean Aylmer: tariffs imposed on countries like China and Vietnam Cambodia. Still, 6 00:00:23,280 --> 00:00:25,720 Sean Aylmer: it's a big hit from one of our closest allies. 7 00:00:25,720 --> 00:00:29,000 Sean Aylmer: In certain companies and sectors within Australia, we'll be feeling 8 00:00:29,000 --> 00:00:31,440 Sean Aylmer: it more than others. Bran Black is the Chief executive 9 00:00:31,440 --> 00:00:33,839 Sean Aylmer: of the Business Council of Australia, which represents many of 10 00:00:33,840 --> 00:00:36,760 Sean Aylmer: Australia's biggest companies. Brand welcome back to Fear and Greed. 11 00:00:37,040 --> 00:00:38,840 Bran Black: Thanks so much for having me. It's good to be here. 12 00:00:39,040 --> 00:00:42,200 Sean Aylmer: So what was your initial reaction Disappointment? 13 00:00:42,520 --> 00:00:46,200 Bran Black: Disappointment I think is really the reaction that most Australians 14 00:00:46,240 --> 00:00:49,320 Bran Black: would have to the imposition of tariffs on us by 15 00:00:50,000 --> 00:00:55,040 Bran Black: our closest, strongest and most historically long standing ally. It 16 00:00:55,200 --> 00:00:58,040 Bran Black: is a disappointing day for Australia, There's no two ways 17 00:00:58,080 --> 00:01:00,840 Bran Black: around that. But I think we also so need to 18 00:01:01,240 --> 00:01:05,240 Bran Black: temper that sense of disappointment with a strong focus on 19 00:01:05,319 --> 00:01:08,640 Bran Black: what is ultimately in Australia's interests. There'll be, of course, 20 00:01:08,800 --> 00:01:11,640 Bran Black: the gut instinct, if you will, that says, well, if 21 00:01:11,640 --> 00:01:13,240 Bran Black: they're going to do this to us, we should do 22 00:01:13,280 --> 00:01:16,720 Bran Black: something to them. But the reality is that one in 23 00:01:16,760 --> 00:01:19,600 Bran Black: four jobs in Australia is trade dependent, so for US 24 00:01:19,920 --> 00:01:21,679 Bran Black: free trade matters. 25 00:01:21,840 --> 00:01:23,800 Sean Aylmer: And the Prime minist has come and he has said 26 00:01:23,840 --> 00:01:28,080 Sean Aylmer: that there won't be retaliatory tariffs, there won't be years 27 00:01:28,120 --> 00:01:31,920 Sean Aylmer: of the mechanism, the dispute mechanism used under the US 28 00:01:31,920 --> 00:01:35,000 Sean Aylmer: Australia Free Trade Agreement. Do you think that's the right 29 00:01:35,040 --> 00:01:38,520 Sean Aylmer: way to go, just kind of let things settle for 30 00:01:38,560 --> 00:01:40,000 Sean Aylmer: a bit and go from there. 31 00:01:41,440 --> 00:01:45,160 Bran Black: Unquestionably in my view, I think that there are some 32 00:01:45,680 --> 00:01:48,880 Bran Black: different types of steps that we can take or continue 33 00:01:48,880 --> 00:01:52,400 Bran Black: taking now that we've got confirmation, and let's be clique here. 34 00:01:52,600 --> 00:01:55,960 Bran Black: It is useful now to know where we stand. There's 35 00:01:56,040 --> 00:01:59,000 Bran Black: been so much uncertainty for such a long period of 36 00:01:59,040 --> 00:02:02,360 Bran Black: time as to how tariff's would be applied, what they 37 00:02:02,360 --> 00:02:04,560 Bran Black: would look like, to whom they'd be applied, whether or 38 00:02:04,560 --> 00:02:07,760 Bran Black: not there was scope to secure an exemption. I've had 39 00:02:07,880 --> 00:02:11,840 Bran Black: so many different dealings and discussions with counterparts in Washington, 40 00:02:12,320 --> 00:02:16,600 Bran Black: with our contacts in Washington, certainly with Australian government officials 41 00:02:16,840 --> 00:02:19,320 Bran Black: in Canberra, and also of course with Kevin Rudd and 42 00:02:19,360 --> 00:02:22,640 Bran Black: his embassy team over in Washington as well. And that 43 00:02:22,800 --> 00:02:26,200 Bran Black: sense of uncertainty of not being sure what the process 44 00:02:26,280 --> 00:02:30,160 Bran Black: is or what the results might be has been frustrating 45 00:02:30,280 --> 00:02:33,160 Bran Black: at times. We now know what the position is. It's 46 00:02:33,200 --> 00:02:38,040 Bran Black: a ten percent tariff. Fortunately that position is a little 47 00:02:38,040 --> 00:02:41,280 Bran Black: bit lower, of course than what many other countries have 48 00:02:41,639 --> 00:02:45,440 Bran Black: been slapped with today by the US administration. It is 49 00:02:45,480 --> 00:02:47,440 Bran Black: good that we're at the lower end, and it is 50 00:02:47,520 --> 00:02:49,600 Bran Black: good that we also, as I say, know when our 51 00:02:49,639 --> 00:02:52,560 Bran Black: position is in terms of next steps. I think it's 52 00:02:52,639 --> 00:02:56,720 Bran Black: really important that we continue to focus on putting Australia's case, 53 00:02:56,960 --> 00:02:59,120 Bran Black: and we do have a strong case to put, both 54 00:02:59,160 --> 00:03:01,880 Bran Black: in terms of the reasons that have already been articulated, 55 00:03:01,919 --> 00:03:05,200 Bran Black: our trade deficit to the United States, our support, our 56 00:03:05,240 --> 00:03:08,640 Bran Black: long and strong standing friendship. All of those things matter, 57 00:03:09,240 --> 00:03:11,680 Bran Black: but there are also so many different things that Australia 58 00:03:11,680 --> 00:03:14,359 Bran Black: can out to the table. Let's remember that we had 59 00:03:14,560 --> 00:03:17,359 Bran Black: a period of eight months in twenty seventeen before Australia 60 00:03:17,440 --> 00:03:20,480 Bran Black: was able to secure an exemption from tariffs. We should 61 00:03:20,520 --> 00:03:26,480 Bran Black: continue to negotiate methodically, calmly, consistently making Australia's case, putting 62 00:03:26,480 --> 00:03:28,960 Bran Black: forward what is in our best interests. And I know 63 00:03:29,320 --> 00:03:33,160 Bran Black: that our officials and our government agencies and our leaders 64 00:03:33,200 --> 00:03:35,160 Bran Black: are very much engaged in that process and I support 65 00:03:35,160 --> 00:03:35,880 Bran Black: them wholeheartedly. 66 00:03:36,360 --> 00:03:39,720 Sean Aylmer: There seems to be some regal room in some areas. 67 00:03:39,760 --> 00:03:42,360 Sean Aylmer: So the beef export is our largest export to the 68 00:03:42,480 --> 00:03:45,480 Sean Aylmer: US hit with ten percent not good, but it's not 69 00:03:45,520 --> 00:03:48,200 Sean Aylmer: only more than that. There are definitely carve outs, it 70 00:03:48,360 --> 00:03:52,520 Sean Aylmer: seems in the fact statement from the White House around pharmaceuticals, 71 00:03:52,560 --> 00:03:56,040 Sean Aylmer: around bullion, are they the sorts of things we should 72 00:03:56,080 --> 00:03:59,640 Sean Aylmer: be discussing from the get go, given that in black 73 00:03:59,680 --> 00:04:02,440 Sean Aylmer: and white there is a suggestion that you can actually 74 00:04:02,560 --> 00:04:03,760 Sean Aylmer: be exemptrum tariffs. 75 00:04:04,200 --> 00:04:06,680 Bran Black: Indeed, we should be looking at how we can go 76 00:04:06,760 --> 00:04:11,000 Bran Black: about securing the strongest type of exemptions that we can. 77 00:04:11,360 --> 00:04:14,000 Bran Black: What I thought was very interesting in this morning's report, 78 00:04:14,120 --> 00:04:17,400 Bran Black: I believe from memory it was three hundred ninety seven pages, 79 00:04:17,440 --> 00:04:20,880 Bran Black: but as you sift through it, the great majority, the great, 80 00:04:21,000 --> 00:04:26,800 Bran Black: great majority of that lengthy document is devoted to running 81 00:04:26,839 --> 00:04:29,400 Bran Black: through the tariff position that will apply to each and 82 00:04:29,440 --> 00:04:32,240 Bran Black: every country in the world. So you can understand why 83 00:04:32,320 --> 00:04:34,160 Bran Black: document is so long when you account for all the 84 00:04:34,160 --> 00:04:37,360 Bran Black: different countries that that document needs to account for. What 85 00:04:37,400 --> 00:04:42,039 Bran Black: it doesn't say is the rationale for the calculation of 86 00:04:42,120 --> 00:04:47,400 Bran Black: various different tariffs. We've seen with the graphic the Secretary 87 00:04:47,440 --> 00:04:50,880 Bran Black: for Commerce held up during the President's press conference that 88 00:04:51,080 --> 00:04:55,440 Bran Black: there was a base position of calculation being made as 89 00:04:55,480 --> 00:04:58,520 Bran Black: to the tariff's charged to the United States. I'm just 90 00:04:58,520 --> 00:05:00,640 Bran Black: looking at it right now as I talk. And then 91 00:05:00,680 --> 00:05:03,120 Bran Black: of course there's a further column that speaks to the 92 00:05:03,200 --> 00:05:07,039 Bran Black: discounted reciprocal tariff that is proposed to be applied or 93 00:05:07,040 --> 00:05:10,120 Bran Black: that indeed is being applied by the United States to 94 00:05:10,520 --> 00:05:15,919 Bran Black: different countries. It's very unclear when you go through that 95 00:05:15,960 --> 00:05:19,200 Bran Black: three hundred and ninety seven page document as to how 96 00:05:19,800 --> 00:05:22,920 Bran Black: the tariff's charge the United States have been calculated, and 97 00:05:22,960 --> 00:05:25,960 Bran Black: indeed the discounted rate that's been applied to different countries 98 00:05:26,000 --> 00:05:29,160 Bran Black: as well. What that means is that whilst, of course 99 00:05:29,440 --> 00:05:33,520 Bran Black: this process might have the appearance of being very scientific, 100 00:05:34,080 --> 00:05:36,480 Bran Black: let's remember that there is always going to be with 101 00:05:36,560 --> 00:05:39,599 Bran Black: this type of process, an element of arbitrariness to it, 102 00:05:39,960 --> 00:05:42,640 Bran Black: and what that necessarily means is that their scope for 103 00:05:42,760 --> 00:05:44,920 Bran Black: us to play in the gray area, and we should 104 00:05:44,920 --> 00:05:47,600 Bran Black: continue to do that by putting forward our case as 105 00:05:47,640 --> 00:05:48,520 Bran Black: from where as possible. 106 00:05:49,080 --> 00:05:51,360 Sean Aylmer: Is the biggest risk in what's happened in the last 107 00:05:51,360 --> 00:05:55,279 Sean Aylmer: twenty four hours a global economic downturn. Is that really 108 00:05:55,320 --> 00:05:56,560 Sean Aylmer: the big issue for Australia. 109 00:05:57,440 --> 00:06:00,400 Bran Black: Yes, of course it is absolutely. It is, of course 110 00:06:00,480 --> 00:06:03,000 Bran Black: a concern to us that there is a ten percent 111 00:06:03,080 --> 00:06:06,719 Bran Black: tariff that's been applied to our exports to the United 112 00:06:06,760 --> 00:06:10,839 Bran Black: States that may have the impact of reducing demand in 113 00:06:10,880 --> 00:06:14,560 Bran Black: the United States for the goods services that we're producing. 114 00:06:15,080 --> 00:06:18,800 Bran Black: But let's remember here that the larger concern, the broader, 115 00:06:18,880 --> 00:06:22,240 Bran Black: bigger issue, is always going to be what do all 116 00:06:22,279 --> 00:06:26,080 Bran Black: of these tariffs look like for the world, but also 117 00:06:26,240 --> 00:06:29,159 Bran Black: for Australia in terms of our engagement with the world. 118 00:06:29,320 --> 00:06:32,320 Bran Black: What does that do to demand for Australian projects? More broadly, 119 00:06:32,600 --> 00:06:35,599 Bran Black: for instance, if you've got a country like China which 120 00:06:35,720 --> 00:06:40,039 Bran Black: has a thirty four percent discounted reciprocal tariff that's just 121 00:06:40,040 --> 00:06:43,320 Bran Black: been applied as of today, what does that mean in 122 00:06:43,400 --> 00:06:47,680 Bran Black: terms of Chinese demand for Australian commodities, for instance, and 123 00:06:47,760 --> 00:06:52,000 Bran Black: in turn, what does that mean for Australian jobs and 124 00:06:52,040 --> 00:06:55,920 Bran Black: Australian businesses here at home. I asked those as questions 125 00:06:56,040 --> 00:06:58,960 Bran Black: because unfortunately we just don't know the answers to these 126 00:06:59,000 --> 00:07:02,279 Bran Black: points yet. There are so many variables and they'll all 127 00:07:02,640 --> 00:07:04,240 Bran Black: come out in the wash and over the course of 128 00:07:04,360 --> 00:07:05,000 Bran Black: coming months. 129 00:07:05,520 --> 00:07:09,480 Sean Aylmer: Say with me, Brand, We'll be back in a minute. 130 00:07:13,800 --> 00:07:17,400 Sean Aylmer: I'm speaking to Bcachief executive Brand black Brand. We're in 131 00:07:17,440 --> 00:07:19,880 Sean Aylmer: the midst of an election campaign. Currently both the Prime 132 00:07:19,920 --> 00:07:24,000 Sean Aylmer: Minister and Opposition leader are standing firm against these tariffs. 133 00:07:24,040 --> 00:07:26,240 Sean Aylmer: The US has suggested this is now at the starting 134 00:07:26,280 --> 00:07:31,720 Sean Aylmer: point for negotiations. How do you think this runs politically. 135 00:07:31,480 --> 00:07:34,040 Bran Black: In the context of an election. Is that the point 136 00:07:34,080 --> 00:07:34,440 Bran Black: that in. 137 00:07:34,400 --> 00:07:35,440 Sean Aylmer: The context of the election. 138 00:07:35,560 --> 00:07:39,800 Bran Black: Yeah, Look, I think what we've said consistently and I 139 00:07:40,000 --> 00:07:44,920 Bran Black: really emphasize this point. We want to see Australia respond 140 00:07:45,160 --> 00:07:48,280 Bran Black: to these tariffs by doing the things that are wholly 141 00:07:48,280 --> 00:07:50,679 Bran Black: within our control. You know, you look at the world 142 00:07:50,680 --> 00:07:52,400 Bran Black: at large at the moment and it is a sea 143 00:07:52,480 --> 00:07:55,800 Bran Black: of uncertainty. There are so many different variables that are 144 00:07:55,800 --> 00:07:59,480 Bran Black: coming into play. We've of course got our energy transition, 145 00:08:00,080 --> 00:08:04,000 Bran Black: We've got the impact of artificial intelligence. There's still global 146 00:08:04,040 --> 00:08:07,360 Bran Black: conflicts at play, and then we've got tariffs as well. 147 00:08:07,760 --> 00:08:10,680 Bran Black: So when you overlay all of those things one on 148 00:08:11,040 --> 00:08:15,400 Bran Black: each other, it makes for a difficult and uncertain world. 149 00:08:15,480 --> 00:08:19,000 Bran Black: And in those circumstances, we can really just control what 150 00:08:19,080 --> 00:08:22,160 Bran Black: we can control. To my mind, that's making sure that 151 00:08:22,240 --> 00:08:26,840 Bran Black: we present as a country the most competitive investment proposition 152 00:08:27,160 --> 00:08:29,280 Bran Black: to the rest of the world and indeed to domestic 153 00:08:29,320 --> 00:08:32,080 Bran Black: businesses as well. That means that we want to see 154 00:08:32,320 --> 00:08:36,040 Bran Black: politically in this election, the focus very much on what 155 00:08:36,160 --> 00:08:39,119 Bran Black: Australia can do to set itself up to be competitive. 156 00:08:39,520 --> 00:08:42,280 Bran Black: That means getting our investment fundamentals right, what we can 157 00:08:42,320 --> 00:08:44,600 Bran Black: do with respect to tax reform. I know fear and 158 00:08:44,640 --> 00:08:47,520 Bran Black: greed Love's talking about tax reform, so do we what 159 00:08:47,559 --> 00:08:50,520 Bran Black: it means with respect to industrial relations, what it means 160 00:08:50,520 --> 00:08:53,360 Bran Black: with respect to our planning systems at a state level 161 00:08:53,640 --> 00:08:56,160 Bran Black: and at a federal level, and of course what we 162 00:08:56,200 --> 00:08:59,520 Bran Black: can do to deregulate. There's a lot of what I 163 00:08:59,520 --> 00:09:02,280 Bran Black: would say is in terms of what's coming from the 164 00:09:02,280 --> 00:09:05,320 Bran Black: Trump administration, points that we disagree with, certainly in terms 165 00:09:05,360 --> 00:09:09,080 Bran Black: of tariffs. But one thing that we should remember is 166 00:09:09,120 --> 00:09:13,000 Bran Black: that from a United States economic perspective, a big part 167 00:09:13,040 --> 00:09:17,000 Bran Black: of President Trump's agenda is making the American investment environment 168 00:09:17,080 --> 00:09:20,120 Bran Black: as attractive as possible. This is already the Western world's 169 00:09:20,120 --> 00:09:24,400 Bran Black: most competitive and productive economy. If we want to continue 170 00:09:24,400 --> 00:09:27,280 Bran Black: to be competitive, if we want to continue to secure 171 00:09:27,280 --> 00:09:30,280 Bran Black: a global investment, then we need to get our skates 172 00:09:30,320 --> 00:09:36,160 Bran Black: on in deregulating, in reducing planning process timeframes, in making 173 00:09:36,200 --> 00:09:38,200 Bran Black: sure that our tax system is competitive, and so on. 174 00:09:38,920 --> 00:09:41,800 Sean Aylmer: Do you think the coalition and the government ahead of 175 00:09:41,800 --> 00:09:44,040 Sean Aylmer: the election are taking this seriously enough. 176 00:09:45,480 --> 00:09:49,880 Bran Black: There's no question that both sides of politics are responding 177 00:09:50,320 --> 00:09:53,800 Bran Black: seriously to the tariffs that have been imposed today. So 178 00:09:53,960 --> 00:09:57,160 Bran Black: beyond the tariff though, I do think it's really important 179 00:09:57,280 --> 00:10:00,000 Bran Black: that there be a much stronger focus from both sides 180 00:10:00,240 --> 00:10:04,640 Bran Black: on producing genuinely long term economic plans. You know, one 181 00:10:04,679 --> 00:10:08,400 Bran Black: of the things that frankly scares me is that we 182 00:10:08,520 --> 00:10:12,400 Bran Black: face into a demographic time bomb as things stand right now. 183 00:10:12,760 --> 00:10:15,440 Bran Black: You know, back in nineteen eighty, I think we had 184 00:10:15,480 --> 00:10:18,000 Bran Black: six and a half people working in our economy for 185 00:10:18,000 --> 00:10:20,640 Bran Black: every one person who's retired over the age of sixty five. 186 00:10:20,960 --> 00:10:23,680 Bran Black: Now it's about three point eight, and by twenty sixty 187 00:10:23,679 --> 00:10:26,160 Bran Black: it's projected to drop to two point seven, so that 188 00:10:26,320 --> 00:10:30,960 Bran Black: means a very significant tax burden falling on the shoulders 189 00:10:31,000 --> 00:10:34,680 Bran Black: of proportionately fewer workers if we're to continue to provide 190 00:10:34,720 --> 00:10:36,800 Bran Black: the same quality of life that we're fortunate enough to 191 00:10:36,840 --> 00:10:41,319 Bran Black: experience today. These are major intergenerational problems that we need 192 00:10:41,360 --> 00:10:44,880 Bran Black: to address and we can only do that by growing 193 00:10:44,920 --> 00:10:47,160 Bran Black: the size of the pie, if you will, by making 194 00:10:47,240 --> 00:10:49,920 Bran Black: our economic competitive, and that means we need to look 195 00:10:49,960 --> 00:10:55,480 Bran Black: beyond short term policy solutions and instead start to really 196 00:10:55,520 --> 00:10:58,000 Bran Black: address the fundamentals that will set us up for success. 197 00:10:58,000 --> 00:10:59,880 Bran Black: And those are things that I was talking about before. 198 00:11:00,200 --> 00:11:01,880 Sean Aylmer: Bran, thank you for talking to Fear and Greed. 199 00:11:02,280 --> 00:11:03,839 Bran Black: It's always a pleasure. Thanks for having me. 200 00:11:04,080 --> 00:11:06,720 Sean Aylmer: It was Brand Black, Chief Executive of the Business Council 201 00:11:06,760 --> 00:11:09,120 Sean Aylmer: of Australia. This is the Fear and Greed Business Interview. 202 00:11:09,200 --> 00:11:11,800 Sean Aylmer: Join us every morning for the full episode of Fear 203 00:11:11,800 --> 00:11:14,160 Sean Aylmer: and Greed. Daily business news for people who make their 204 00:11:14,160 --> 00:11:16,559 Sean Aylmer: own decisions. I'm Sean a Elma Enjoy you that