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Speaker 1: Welcome to Ask Fear and Greed, where we take your

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Speaker 1: questions and do our best to answer them. I'm Michael

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Speaker 1: Thompson and good afternoon, Sean Aylmer.

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Speaker 2: Good afternoon, Michael.

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Speaker 1: I love today's question, Sean. It has come from Lockee

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Speaker 1: on Facebook and you can go to Facebook or Instagram

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Speaker 1: or LinkedIn any of the social media platforms all to

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Speaker 1: our website Feargreed dot com dot are you to send

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Speaker 1: your question in? Locke says, though, how do we expect

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Speaker 1: the goings on in international trade to affect the average Australian?

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Speaker 1: Should middle class punters that hold a job and have

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Speaker 1: a mortgage expect big changes given all of the action

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Speaker 1: in the US And Sean, I can just tell by

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Speaker 1: the look on your face that there is not a

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Speaker 1: very straightforward, easy answer. We're not getting out of here

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Speaker 1: in under two minutes.

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Speaker 2: That's correct. I think the short answer, Locke is no,

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Speaker 2: don't worry about it too much. Oh that was quick,

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Speaker 2: I know, I know, thanks very much for joining. No, no, please,

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Speaker 2: there's more to it than that, right there is, But

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Speaker 2: we in the media make a big thing of it.

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Speaker 2: But at the end of the day, let's think about it.

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Speaker 2: So if you think about this strategically, Why is Donald

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Speaker 2: Trump doing this? A lot of the stuff isn't about

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Speaker 2: what he's doing on the economy and inflation and how

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Speaker 2: that will feed through to Australia. A lot of it's about,

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Speaker 2: you know, trying to reduce a supply of drugs, migration,

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Speaker 2: those sorts of issues. He's also the retaliatory tariffs. That's

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Speaker 2: kind of level playing field stuff for him. Whether a

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Speaker 2: country has a trade surplus. He doesn't like countries with

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Speaker 2: a trade surplus. We actually have a trade deficit with

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Speaker 2: the US. We buy more stuff from them than they

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Speaker 2: buy from US, so that's kind of good. There's a

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Speaker 2: bunch of things like he's trying to boost the US

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Speaker 2: steel sector that could hurt some of our guys, although

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Speaker 2: one steal big producer actually is in Ohio, so that

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Speaker 2: might actually benefit from that. He's also trying to raise

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Speaker 2: more money through taxes and stuff like that. So if

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Speaker 2: you think of those things as the reasons he's doing it,

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Speaker 2: that shouldn't hurt Australia too much because on most of

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Speaker 2: those were on the positive side. So he's certainly not

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Speaker 2: going to target us like he's targeted Canada, Mexico, EU, China. However,

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Speaker 2: we might in the scheme of things, be collateral damage

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Speaker 2: if the global economy slows.

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Speaker 1: I was going to ask you about that then in

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Speaker 1: terms of because a lot of the talk when the

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Speaker 1: tariffs were first being announced was the potential for it

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Speaker 1: to have an inflationary effect globally, and Australia would not

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Speaker 1: necessarily be immune to that.

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Speaker 2: Yes, So what's interesting about fifteen percent of the stuff

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Speaker 2: that Americans buy is imported, so means eighty five percent

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Speaker 2: is locally made. So in some certain areas and you'll

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Speaker 2: see some fruits and stuff like that, prices will go

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Speaker 2: through the roof, But across the it's not like there's

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Speaker 2: going to be these wholesale massive price increases in the US.

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Speaker 2: So does that mean there's lots of global inflation? If

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Speaker 2: other economies say, well the US is doing this, we're

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Speaker 2: going to go right back at you, and so all

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Speaker 2: the products go buy out of the US gets a

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Speaker 2: twenty five percent tarer of fifteen percent. I mean, obviously

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Speaker 2: the general level of prices does rise, and I think

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Speaker 2: if you know, we won't see that for two to

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Speaker 2: three years, okay, but I mean probably six to nine

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Speaker 2: months it'll start but the full effect would be two

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Speaker 2: to three years.

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Speaker 1: So it's really quite delayed.

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Speaker 2: Yeah, definitely because by the time you make orders and

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Speaker 2: you pay the bill. And it's even what Donald Trump's

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Speaker 2: talking about, we don't know how that's going to be

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Speaker 2: implemented yet. The execute Donald Tump talks a big game,

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Speaker 2: but it's all about the execution. That's where we find

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Speaker 2: out where it really hurts or not. And sort of

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Speaker 2: some of the earnings we've reported here, we've seen like

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Speaker 2: Ansel the Glover that they talked about lifting prices because

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Speaker 2: tariffs are going up, so when males make our money elsewhere,

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Speaker 2: So now that will hurt us.

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Speaker 1: But I've got to.

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Speaker 2: Say, like mostly it's at the margin. Where it really

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Speaker 2: hurts us is if the whole global global economy slows

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Speaker 2: down and China just doesn't want to buy as much

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Speaker 2: of our iron ore right, nothing to do with the US.

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Speaker 2: Just China's going slower, not going to build as many bridges,

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Speaker 2: build as many roads. Indonesia sort of the same deal.

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Speaker 2: That's when it hurts us most probably.

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Speaker 1: Okay, and that impact would play out on Lockie how.

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Speaker 2: Well it slows down our economy. So like if you've

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Speaker 2: got a job and you light your wage. I don't

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Speaker 2: think you're much to worry about. The thing is if

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Speaker 2: you want to change So let's say this all comes

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Speaker 2: to pass. Everyone's got more tariffs. The global economy slows,

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Speaker 2: Australia slows, and when Australia slows, unemployment goes up. So

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Speaker 2: if you want to change jobs, you want to get

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Speaker 2: a wage rise, it's much harder. So in the short term,

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Speaker 2: I don't think Locke makes any difference twelve months, two years.

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Speaker 2: It is possible that the unemployment rate isn't four percent,

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Speaker 2: it's five or six percent. It is possible that wage

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Speaker 2: rises aren't three and a half percent, there's zero or

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Speaker 2: one percent. So certainly that could happen. But it's not

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Speaker 2: like you're going to lose your job tomorrow or anything

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Speaker 2: like that.

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Speaker 1: All right, so Lockie can kind of sleep easy for

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Speaker 1: the next six to nine months and then start to

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Speaker 1: get a little bit more anxious overnight.

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Speaker 2: Then yeah, And it just depends on what happens to

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Speaker 2: the global economy more than what Donald Trump says.

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Speaker 1: Okay, fascinating, there are so many and there are so

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Speaker 1: many things that can change it, right, There are so

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Speaker 1: many individual little pieces and Donald Trump is really just one.

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Speaker 2: Yeah, what I think Donald Yeah, I think what Donald

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Speaker 2: Trump does more so than the rules he's changing. So

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Speaker 2: the DEI stuff, diversity equity inclusion stuff. You now see

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Speaker 2: companies around the world and those that operate here dropping

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Speaker 2: the DEI policies. Now inside the halls, they may actually

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Speaker 2: make no difference. They may say, look, we're still going

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Speaker 2: to think, you know, we're just gonna want to get

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Speaker 2: the best candidate, and that's that it's a bit ingrained,

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Speaker 2: and therefore they get the best candidate. And that's the

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Speaker 2: same as having a DI policy, because you know, diverse

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Speaker 2: people are as good as Candida as anyone else. But

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Speaker 2: I don't know, but it's at the margins. I think

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Speaker 2: some of those things will have an.

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Speaker 1: Effect fascinating, you know what I reckon, I reckon. We

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Speaker 1: have answered Locke's question, so we I mean it's mostly

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Speaker 1: ninety percent.

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Speaker 2: You Lockey is safe.

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Speaker 1: Yeah, yeah, you're all right, Lockie. Don't stress too much

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Speaker 1: at this point. But thank you very much for the question,

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Speaker 1: and thank you Sean for answering it.

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Speaker 2: Thanks Michael, Thanks Lockey.

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Speaker 1: Remember, if you've got something that you would like to know,

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Speaker 1: then please send through your question on LinkedIn Instagram, Facebook

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Speaker 1: like Lockie did, or head Fear and Greed dot com

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Speaker 1: dot au and send it via an email through the

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Speaker 1: website oh Michael Thompson and this is asked Fear and

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Speaker 1: Greed