WEBVTT - Trump's tariffs, explained

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<v Speaker 1>Already, and this is the Daily This is the Daily OS. Oh,

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<v Speaker 1>now it makes sense.

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<v Speaker 2>Good morning, and welcome to the Daily OS. It's Monday,

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<v Speaker 2>the fourth of February.

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<v Speaker 1>I'm Billy, I'm emma.

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<v Speaker 2>It's been two weeks since US President Donald Trump became president,

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<v Speaker 2>and there have of course been many headline making moves

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<v Speaker 2>from the forty seventh president already. One that our audience

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<v Speaker 2>has been asking us to explain is his policy on tariffs.

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<v Speaker 2>Over the weekend, Trump signed an executive order to impose

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<v Speaker 2>new tariffs on Mexico, Canada, and China. Trump claimed the tariffs,

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<v Speaker 2>which will come into effect this week, will quote stop

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<v Speaker 2>the flood of illegal aliens and drugs from pouring across

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<v Speaker 2>our borders. So what does that all mean? We are

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<v Speaker 2>here today to answer all of your questions, Billy.

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<v Speaker 1>I think before we get to exactly what's happened, what

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<v Speaker 1>these tariffs mean, and who they are going to impact,

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<v Speaker 1>there are a few terms that we need to wrap

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<v Speaker 1>our heads around some new language. The first is an

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<v Speaker 1>executive order. Trump has been signing many of them in

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<v Speaker 1>the last few weeks, hundreds in fact, But what exactly

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<v Speaker 1>is an executive order? I love it.

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<v Speaker 2>Let's start with the glossary. Yeah, we're going to go

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<v Speaker 2>through the terms before we explain exactly what this story is.

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<v Speaker 2>I mean, you said that he has signed many executive orders.

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<v Speaker 2>To be exact, he has signed more than three hundred

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<v Speaker 2>as of the end of January and we are a

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<v Speaker 2>few days into February.

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<v Speaker 1>Now, wow, so there are hundreds and correct me if

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<v Speaker 1>I'm wrong, Billy, but that is more than most US

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<v Speaker 1>presidents in recent history would have signed in their entire terms.

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<v Speaker 2>Yes, so that gives you an idea of just how

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<v Speaker 2>much Trump is saying that he wants to do in

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<v Speaker 2>his second term as president. In terms of what an

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<v Speaker 2>executive order is, because we don't have it here in Australia,

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<v Speaker 2>it is the president's main power. Now, what's interesting about

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<v Speaker 2>it is that it doesn't require Congress's approval and therefore

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<v Speaker 2>it's kind of considered like an instant law.

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<v Speaker 1>So Congress in the US being like their parliament, that's

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<v Speaker 1>where we've got the two houses of parliament. But in

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<v Speaker 1>the US that is separate to the executive branch, which

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<v Speaker 1>is the White House administration the president exactly.

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<v Speaker 2>So the Senate and the House of Representatives are the

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<v Speaker 2>two houses in the Congress, and like you said, m

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<v Speaker 2>that is completely separate to the executive branch, which is

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<v Speaker 2>what Donald Trump is the head of. So that's kind

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<v Speaker 2>of a basic way of explaining the parliamentary system in

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<v Speaker 2>the US. But again, what's important here is this executive order,

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<v Speaker 2>which is basically just like an instant law. It doesn't

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<v Speaker 2>need to go through the legislative process that most laws

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<v Speaker 2>do need to go through.

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<v Speaker 1>Right, So is there any limit then to the power

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<v Speaker 1>of an executive order?

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<v Speaker 2>So there are essentially two things that could stop an

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<v Speaker 2>executive order from going through. One is Congress and the

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<v Speaker 2>other is the courts. So even though these executive orders

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<v Speaker 2>don't need to go through the Congress, which like we

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<v Speaker 2>said is the Senate and the House of Representatives, Congress

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<v Speaker 2>could still take action to block these orders. So one

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<v Speaker 2>way they could do that, for example, is to deny

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<v Speaker 2>the necessary funding to stop an order from going ahead. However, Trump,

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<v Speaker 2>as we know, is part of the Republican Party, and

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<v Speaker 2>the Republican Party is in control of both the House

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<v Speaker 2>of Representatives and the Senate. So because these are people

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<v Speaker 2>in his own party who are in control of the Congress,

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<v Speaker 2>they likely aren't going to stop his executive orders, And indeed,

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<v Speaker 2>since he has been president, they haven't stopped any of

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<v Speaker 2>his executive orders.

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<v Speaker 1>Yeap.

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<v Speaker 2>Now, like I said, there's another way that an executive

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<v Speaker 2>order could be stopped, and that is through the courts.

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<v Speaker 2>So that would be if one of the executive orders

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<v Speaker 2>is deemed unconstitutional. Now, I've actually already seen an example

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<v Speaker 2>of this happening and the court's intervening.

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<v Speaker 1>Billy, when you say the courts in the context of

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<v Speaker 1>halting these executive orders, are we talking about the US

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<v Speaker 1>Supreme Court.

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<v Speaker 2>So it can be the Supreme Court, but it usually

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<v Speaker 2>won't start in the Supreme Court. It will usually start

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<v Speaker 2>in a federal court. And then if the federal court

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<v Speaker 2>makes a decision and then Trump appeals that it will

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<v Speaker 2>then go to the Supreme Court. Okay, Yes, the Supreme

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<v Speaker 2>Court is usually the court that is in charge of

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<v Speaker 2>making sure that the laws in the US are in

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<v Speaker 2>line with the Constitution. But it usually won't stop there.

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<v Speaker 2>But they are the highest court in the land, so

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<v Speaker 2>kind of the buck stops with them.

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<v Speaker 1>So there has already been some intervention at a court

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<v Speaker 1>level to do with an executive order issued by Trump.

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<v Speaker 2>Yes, so Trump issued an executive order to stop some

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<v Speaker 2>children from becoming citizens at birth in the US. So

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<v Speaker 2>this is because under the US Constitution, children born to

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<v Speaker 2>parents who migrated to the country are granted citizenship as

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<v Speaker 2>their birthright. And Trump signed in executive order to stop

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<v Speaker 2>some children from having that birthright citizenship, and that led

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<v Speaker 2>to a number of states immediately taking legal action to

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<v Speaker 2>stop the order from coming into effect, and a federal

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<v Speaker 2>court judge.

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<v Speaker 1>So lower than the Supreme Court.

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<v Speaker 2>Yes, lower than the Supreme Court. So a federal court

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<v Speaker 2>judge in the state of Washington approved the legal request

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<v Speaker 2>to temporarily block Trump's executive order, and so that is

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<v Speaker 2>a TBC. We're still waiting to see what the final

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<v Speaker 2>outcome of that will be.

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<v Speaker 1>Okay, and so then that executive order, which has been

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<v Speaker 1>temporarily blocked, that could end up going to the Supreme

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<v Speaker 1>Court for final decision on Okay, I've got it. Thank

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<v Speaker 1>you so much for explaining, Billy, just feed on the

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<v Speaker 1>glossary for that one. My next question for Philly's definition's

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<v Speaker 1>glossary for today might be a bit of an obvious one,

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<v Speaker 1>but I think a lot of people are wondering, so

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<v Speaker 1>I'll ask the silly questions, what is a tariff actually though.

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<v Speaker 2>There are absolutely no silly questions, as you know at

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<v Speaker 2>the daily OS. And this takes me right back to

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<v Speaker 2>year ten geography. I remember very specifically learning about tariffs

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<v Speaker 2>in geography. To put it very simply, it is a

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<v Speaker 2>tax on imports. So when goods are brought into another

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<v Speaker 2>country from overseas, they are typically subject to fees or

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<v Speaker 2>duties that are known as tariffs, and that means that

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<v Speaker 2>the taxes imposed on those goods make it more expensive. Now,

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<v Speaker 2>the taxes are usually absorbed by the consumer, so usually

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<v Speaker 2>it means that we as consumers will be paying more

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<v Speaker 2>for overseas goods. It doesn't necessarily have to be absorbed

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<v Speaker 2>by the consumer, it's up to every individual business, but

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<v Speaker 2>typically it usually is. So this would mean that if

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<v Speaker 2>Trump is imposing tariffs overseas, it would mean the foreign

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<v Speaker 2>made goods bought by US citizens is more expensive than

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<v Speaker 2>if they are buying a good that is made in

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<v Speaker 2>the US. Okay, but I think I've jumped the gun,

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<v Speaker 2>so we'll get into more of them. The general purpose

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<v Speaker 2>is to encourage citizens to buy local products instead of

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<v Speaker 2>products from overseas, because rather than absorb the cost of

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<v Speaker 2>these import fees on foreign goods, consumers may be more

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<v Speaker 2>encouraged to purchase domestic goods, which will be cheaper.

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<v Speaker 1>Okay, So tariffs could question for example, then be used

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<v Speaker 1>by governments maybe to boost local manufacturing. Exactly. If you

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<v Speaker 1>put these tariffs on importing foreign made goods, they could

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<v Speaker 1>become more expensive for customers. So customers might say, hey,

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<v Speaker 1>actually would rather buy something that was made here in

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<v Speaker 1>this country that I'm in because it's cheaper, exactly.

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<v Speaker 2>And that is the primary purpose of tariffs.

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<v Speaker 1>But there is another purpose of tariffs that we are

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<v Speaker 1>going to get to a bit later that has a

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<v Speaker 1>little bit more to do with diplomacy or political tensions.

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<v Speaker 1>So what has been announced in terms of tariffs and

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<v Speaker 1>this Trump administration that we are now talking about today.

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<v Speaker 2>So over the weekend on Saturday, President Trump signed an

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<v Speaker 2>executive order to impose new tariffs on three countries. They

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<v Speaker 2>are Mexico, Canada, and China. Now, Trump said he will

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<v Speaker 2>impose a ten percent tariff on China and then a

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<v Speaker 2>twenty five percent tariff on Mexico and Canada. And those,

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<v Speaker 2>for contexts, are the US's three largest trading partners. So

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<v Speaker 2>that's pretty huge. It's a massive announcement.

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<v Speaker 1>Yeah, and a twenty five percent increase on these taxes

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<v Speaker 1>applied to goods coming into the US from Canada and Mexico.

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<v Speaker 1>I think it's also interesting to point out that just geographically,

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<v Speaker 1>you know, to go back to year ten giography with Billy,

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<v Speaker 1>that they are on the map. You know, countries that

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<v Speaker 1>you can drive to from the US. We've got North

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<v Speaker 1>and Central America. They share borders.

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<v Speaker 2>They share borders with the US, so they are neighbors.

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<v Speaker 1>Which traditionally can mean that the tariffs are lower, that

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<v Speaker 1>there are less barriers to importing.

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<v Speaker 2>But not anymore. No one wants to get into a

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<v Speaker 2>fight with their neighbors, but apparently Donald Trump does with

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<v Speaker 2>Canada and Mexico.

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<v Speaker 1>So to be really clear, then all of the goods

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<v Speaker 1>coming from Mexico and Canada into the US will now

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<v Speaker 1>be subject to those tariffs, and the same for goods

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<v Speaker 1>from China.

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<v Speaker 2>Yes, pretty much all goods. There is one exception on

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<v Speaker 2>energy products coming from Canada. They will be subject to

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<v Speaker 2>a lower tariff of ten percent, But for all other

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<v Speaker 2>goods coming from Canada, Mexico and China there will be

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<v Speaker 2>this increased tariff. To give you an example of how

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<v Speaker 2>this will impact people, in the US and also people

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<v Speaker 2>in those three countries. I'm just going to use this

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<v Speaker 2>one very small example, but most of the avocados in

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<v Speaker 2>the US are imported from Mexico, so something like avocados

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<v Speaker 2>will now become much more expensive in the US. We

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<v Speaker 2>said before that the primary goal of these tariffs is

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<v Speaker 2>to encourage more local production, but the US can't actually

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<v Speaker 2>doesn't have enough farms to produce all of the avocados

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<v Speaker 2>that citizens consume there. So it's not as simple as

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<v Speaker 2>saying that we should just make everything in the US,

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<v Speaker 2>because of course there are limitations and how much you

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<v Speaker 2>can do that.

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<v Speaker 1>You said that that was a small example, Billy, but

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<v Speaker 1>I think for anyone who cares about avocados, yes, that

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<v Speaker 1>would be a significant one. Yeah.

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<v Speaker 2>And another thing is the price of cars will likely

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<v Speaker 2>go up because Mexico is all so the largest autoparts

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<v Speaker 2>exporder in the US.

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<v Speaker 1>And also the manufacturing of automobiles in the US is

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<v Speaker 1>an industry that died a long time ago. So like

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<v Speaker 1>the avocado farms, I suppose that infrastructure isn't automatically in

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<v Speaker 1>place to replace it. So what has Trump said in

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<v Speaker 1>terms of why he's introduced these tariffs has he sort

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<v Speaker 1>of addressed these concerns.

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<v Speaker 2>At a very top line level. Trump says it's because

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<v Speaker 2>of two reasons. The first one is he says that

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<v Speaker 2>these countries are allowing too many undocumented immigrants into the US.

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<v Speaker 2>And the second is because he claims that they are

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<v Speaker 2>also allowing too many illegal drugs to enter the US.

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<v Speaker 1>Which speaks to the shared borders that we spoke about earlier.

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<v Speaker 2>Exactly so with the undocumented immigrants, he said that it

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<v Speaker 2>is not confined to just Mexico. These undocumented immigrants come

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<v Speaker 2>into the US, but it's also he says, happening in Canada,

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<v Speaker 2>and that there are a rising number of Chinese nationals

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<v Speaker 2>two and he says, quote people on the terror watch

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<v Speaker 2>list who are coming into the US from those countries.

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<v Speaker 2>And then on the illegal drug side, he says that

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<v Speaker 2>the Mexican government is in an alliance with Mexican drug

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<v Speaker 2>trafficking organizations, and he says Canada too has allowed quote

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<v Speaker 2>a growing presence of Mexican cartels operating fentanyl labs that

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<v Speaker 2>has increased the number of drugs going into the US.

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<v Speaker 1>Now fentanyl, we're talking about synthetic opioids, the sort of

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<v Speaker 1>painkiller crisis that has become a huge problem across North America.

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<v Speaker 1>If people haven't heard that term fentanyl. What about China?

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<v Speaker 1>Obviously China is an outlier here geographically.

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<v Speaker 2>Yeah, exactly what he says about China is that Chinese

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<v Speaker 2>officials quote, have failed to take the actions necessary to

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<v Speaker 2>stem the flow of pre chemicals to known criminal cartels

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<v Speaker 2>and shut down money laundering by transnational criminal organizations. Now,

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<v Speaker 2>it's interesting about all of this. Again, before I said

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<v Speaker 2>that the primary use of tariffs is to promote domestic production,

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<v Speaker 2>but here, obviously none of the reasonings that he is

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<v Speaker 2>giving is because of that. He is basically using it

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<v Speaker 2>as a bargaining chip to make these three countries do

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<v Speaker 2>things that aligned with his policies, and he's saying that

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<v Speaker 2>if you don't do this, then these severe penalties will

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<v Speaker 2>be placed on imports coming from your country. And he

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<v Speaker 2>has said that these tariffs will be in place until

0:13:42.200 --> 0:13:45.480
<v Speaker 2>the crisis is alleviated. So he's not saying that these

0:13:45.520 --> 0:13:48.400
<v Speaker 2>are forever. We don't know how long they will be.

0:13:48.960 --> 0:13:51.600
<v Speaker 2>But again, he's using it as a bargaining chip to say,

0:13:51.840 --> 0:13:55.040
<v Speaker 2>until you do what I want you to do, these

0:13:55.080 --> 0:13:57.520
<v Speaker 2>tariffs will remain in place.

0:13:57.640 --> 0:14:00.440
<v Speaker 1>So it's an example of how tariffs can be used

0:14:00.920 --> 0:14:05.680
<v Speaker 1>for more political interests or for these kind of political conversations.

0:14:05.760 --> 0:14:08.920
<v Speaker 1>I think in Australia, a recent example of that is

0:14:09.080 --> 0:14:13.520
<v Speaker 1>during COVID, the diplomatic relationship between Australia and China became

0:14:13.679 --> 0:14:17.960
<v Speaker 1>a little bit more tense concerns over China's handling of COVID,

0:14:18.320 --> 0:14:21.920
<v Speaker 1>and the Australian government was essentially punished by the Chinese

0:14:21.960 --> 0:14:24.920
<v Speaker 1>government for some of the comments it had made in

0:14:24.960 --> 0:14:28.960
<v Speaker 1>the form of high tariffs from Australian goods being imported

0:14:29.120 --> 0:14:32.320
<v Speaker 1>over to China. Things have since eased, so I suppose

0:14:32.360 --> 0:14:34.680
<v Speaker 1>that is a bit of an example closer to home

0:14:34.840 --> 0:14:38.280
<v Speaker 1>about how these kind of tensions can ignite and eventually

0:14:38.440 --> 0:14:42.920
<v Speaker 1>be resolved. But very different circumstances in the US and

0:14:43.080 --> 0:14:48.080
<v Speaker 1>big claims from US President Donald Trump about the illegal immigrants,

0:14:48.200 --> 0:14:51.880
<v Speaker 1>the drug trafficking, the drug cartels and money laundering, etc.

0:14:52.920 --> 0:14:56.360
<v Speaker 1>What has been the response from the governments of these countries.

0:14:56.640 --> 0:14:59.480
<v Speaker 2>To put it very simply, they're not happy. I'll go

0:14:59.520 --> 0:15:02.480
<v Speaker 2>to Canada first because they have made the most concrete

0:15:02.560 --> 0:15:06.480
<v Speaker 2>or most specific announcement about how they will retaliate. So

0:15:06.560 --> 0:15:10.240
<v Speaker 2>they have announced that starting from today Tuesday, they are

0:15:10.400 --> 0:15:14.600
<v Speaker 2>imposing tarifs on thirty billion dollars worth of goods imported

0:15:14.760 --> 0:15:20.960
<v Speaker 2>from the US, on things like orange juice, peanut butter, wine, coffee, footwear, cosmetics,

0:15:21.240 --> 0:15:24.520
<v Speaker 2>and other similar things. So they're not saying everything. They're

0:15:24.520 --> 0:15:27.240
<v Speaker 2>not saying all goods, but they have released a list

0:15:27.280 --> 0:15:29.240
<v Speaker 2>of goods that it will impact.

0:15:28.840 --> 0:15:31.480
<v Speaker 1>And some pretty sort of staple essential items that they're

0:15:31.520 --> 0:15:34.240
<v Speaker 1>saying to US importers, hey, this is going to cost

0:15:34.240 --> 0:15:36.240
<v Speaker 1>you more to bring it into our country now.

0:15:36.400 --> 0:15:39.440
<v Speaker 2>Yeah. They said explicitly in their announcement that this will

0:15:39.480 --> 0:15:43.640
<v Speaker 2>make these products less desirable for Canadian consumers to purchase,

0:15:44.000 --> 0:15:46.360
<v Speaker 2>and they said that this should send a message to

0:15:46.480 --> 0:15:49.680
<v Speaker 2>US businesses and the US government on the need to

0:15:49.760 --> 0:15:53.280
<v Speaker 2>reverse the imposition of tariffs for the benefit of both

0:15:53.320 --> 0:15:59.360
<v Speaker 2>Canadians and Americans. Now, Mexico has also responded. Their government

0:15:59.440 --> 0:16:02.280
<v Speaker 2>has said that they don't want confrontation and that they

0:16:02.320 --> 0:16:06.880
<v Speaker 2>would have rather deal with this through negotiation and discussion.

0:16:07.360 --> 0:16:09.800
<v Speaker 2>But they say now they've been left with no other

0:16:09.920 --> 0:16:13.560
<v Speaker 2>choice and that they will introduce tariffs. We don't know

0:16:13.760 --> 0:16:16.600
<v Speaker 2>the exact rate of the tariffs that they are saying

0:16:16.640 --> 0:16:20.360
<v Speaker 2>they will introduce or what goods will be impacted, at

0:16:20.440 --> 0:16:23.120
<v Speaker 2>least at the time of recording, but they have said

0:16:23.200 --> 0:16:27.160
<v Speaker 2>that tariffs will be introduced. In terms of China, they've

0:16:27.200 --> 0:16:31.000
<v Speaker 2>taken a little bit of a different approach. Their Commerce

0:16:31.120 --> 0:16:34.600
<v Speaker 2>ministry has promised a legal case at the World Trade

0:16:34.720 --> 0:16:38.040
<v Speaker 2>Organization WOW, and also they've said that there will be

0:16:38.160 --> 0:16:42.520
<v Speaker 2>corresponding countermeasures. So we don't know too many further details,

0:16:42.800 --> 0:16:45.600
<v Speaker 2>but it looks like they're going down the legal route,

0:16:45.960 --> 0:16:50.280
<v Speaker 2>and Canada and Mexico are going down the retalitory route.

0:16:50.480 --> 0:16:54.200
<v Speaker 1>Okay, So we're seeing kind of in real time this

0:16:54.320 --> 0:16:57.880
<v Speaker 1>response play out. Trump had touted these tariffs for a

0:16:57.920 --> 0:17:01.360
<v Speaker 1>long time, particularly heavy time Paris for China. He'd spoken

0:17:01.360 --> 0:17:03.280
<v Speaker 1>about them a lot during the run up to the

0:17:03.400 --> 0:17:07.800
<v Speaker 1>election last year. But I suppose the conversation has now

0:17:07.960 --> 0:17:10.600
<v Speaker 1>turned in the other direction that as much as it

0:17:10.640 --> 0:17:14.880
<v Speaker 1>will become more expensive for other countries to import US goods,

0:17:15.600 --> 0:17:19.560
<v Speaker 1>it will also become more expensive for US manufacturers to

0:17:19.960 --> 0:17:23.879
<v Speaker 1>take their goods to sell to other countries. So given

0:17:23.920 --> 0:17:26.840
<v Speaker 1>that kind of knock on effect, do we know if

0:17:26.920 --> 0:17:28.600
<v Speaker 1>this could impact Australia.

0:17:29.160 --> 0:17:32.359
<v Speaker 2>So Trump hasn't explicitly said that there will be any

0:17:32.680 --> 0:17:36.520
<v Speaker 2>new tariffs announced for Australia, so that could be seen

0:17:36.560 --> 0:17:39.960
<v Speaker 2>as a promising sign for US here in Australia, but

0:17:40.680 --> 0:17:42.679
<v Speaker 2>all the experts, of course say that we never know

0:17:42.840 --> 0:17:45.920
<v Speaker 2>what's going to happen, what Donald Trump is thinking.

0:17:46.240 --> 0:17:50.399
<v Speaker 1>Foreign Minister Penny Wong was actually in Washington, DC just

0:17:50.560 --> 0:17:54.240
<v Speaker 1>last week and released a statement sort of describing the

0:17:54.320 --> 0:17:58.160
<v Speaker 1>strength of Australia's relationship with the US, and in part

0:17:58.320 --> 0:18:01.800
<v Speaker 1>of how strong our relationship is, she specifically called out

0:18:01.960 --> 0:18:05.400
<v Speaker 1>the trade relationship between the two countries. So you could

0:18:05.480 --> 0:18:08.760
<v Speaker 1>argue maybe there that the Foreign Minister was trying to

0:18:09.280 --> 0:18:13.440
<v Speaker 1>kind of soften or speak up the relationship between the

0:18:13.480 --> 0:18:16.280
<v Speaker 1>alliance between Australia and the US to avoid being caught

0:18:16.320 --> 0:18:16.639
<v Speaker 1>up in this.

0:18:16.920 --> 0:18:20.080
<v Speaker 2>Yeah, the Australian government, in everything I've seen, every time

0:18:20.119 --> 0:18:24.000
<v Speaker 2>they've spoken about US and Australia's relationship after Donald Trump

0:18:24.119 --> 0:18:27.640
<v Speaker 2>was elected, they've really been at pains to emphasize the

0:18:27.680 --> 0:18:31.080
<v Speaker 2>relationship between the US and Australia has never been stronger, etc.

0:18:31.320 --> 0:18:31.520
<v Speaker 1>Etc.

0:18:31.960 --> 0:18:34.840
<v Speaker 2>And trade is also strong and that we won't be impacted.

0:18:35.240 --> 0:18:39.080
<v Speaker 2>I guess time will tell, but in the more immediate future,

0:18:39.160 --> 0:18:41.680
<v Speaker 2>I would say the most tangible impact it has had

0:18:41.720 --> 0:18:45.520
<v Speaker 2>already is on the share market. So the Australian Stock

0:18:45.560 --> 0:18:49.800
<v Speaker 2>Exchange went down yesterday and also the Aussie dollar dropped

0:18:49.800 --> 0:18:53.520
<v Speaker 2>to sixty one US since yesterday. And I might throw

0:18:53.560 --> 0:18:56.280
<v Speaker 2>to you because you actually recently did a deep dive

0:18:56.400 --> 0:18:59.040
<v Speaker 2>into why the Aussie dollar is dropping.

0:18:59.240 --> 0:19:02.000
<v Speaker 1>Yeah, what did you find? So we started looking into

0:19:02.000 --> 0:19:05.840
<v Speaker 1>this because the Aussie dollar had dropped significantly and at

0:19:05.840 --> 0:19:08.359
<v Speaker 1>the surface level it's sort of, you know, bad news

0:19:08.359 --> 0:19:11.679
<v Speaker 1>for Australians who are planning to travel to America for

0:19:11.720 --> 0:19:14.919
<v Speaker 1>a holiday. Maybe. But we spoke to some experts and

0:19:15.000 --> 0:19:18.240
<v Speaker 1>we figured out this link between sort of tariffs they're

0:19:18.320 --> 0:19:22.320
<v Speaker 1>changing dollar fluctuating currencies and the Chinese economy, which actually

0:19:22.320 --> 0:19:24.080
<v Speaker 1>has a lot to do with it. And of course

0:19:24.080 --> 0:19:27.600
<v Speaker 1>we're talking about China having tariffs imposed on it by

0:19:27.640 --> 0:19:31.640
<v Speaker 1>the US. The Chinese economy has been struggling more broadly,

0:19:31.680 --> 0:19:35.120
<v Speaker 1>so aside from concerns about tariffs, and this is down

0:19:35.200 --> 0:19:39.000
<v Speaker 1>to many factors. But there's been falling house prices, high

0:19:39.080 --> 0:19:43.520
<v Speaker 1>youth unemployment, so China's currency actually dropped to a sixteen

0:19:43.600 --> 0:19:48.520
<v Speaker 1>month low this year earlier in January, and demand for

0:19:48.600 --> 0:19:52.879
<v Speaker 1>Australian exports to China has declined as a result. So

0:19:52.880 --> 0:19:55.880
<v Speaker 1>one of Australia's highest earning exports is iron ore. It's

0:19:55.920 --> 0:19:58.560
<v Speaker 1>worth over one hundred billion dollars a year. But the

0:19:58.640 --> 0:20:01.639
<v Speaker 1>Chinese economy is not doing well, so the demand for

0:20:01.680 --> 0:20:04.040
<v Speaker 1>iron ore, or how much iron ore it can afford

0:20:04.040 --> 0:20:07.800
<v Speaker 1>from Australia has dropped. And experts say the Australian dollar

0:20:08.000 --> 0:20:11.160
<v Speaker 1>is really viewed by investors as an indicator of how

0:20:11.280 --> 0:20:14.480
<v Speaker 1>well China is doing, because generally we know that if

0:20:14.480 --> 0:20:17.760
<v Speaker 1>the Chinese economy is strong, the Australian economy is also

0:20:17.880 --> 0:20:21.120
<v Speaker 1>probably doing pretty well. Now, how this kind of circles

0:20:21.200 --> 0:20:26.240
<v Speaker 1>back around into Trump's tariffs is that they present an

0:20:26.359 --> 0:20:29.680
<v Speaker 1>added level of uncertainty for the Chinese economy, which is

0:20:29.720 --> 0:20:33.040
<v Speaker 1>already hurting, and you know, by the metric of what

0:20:33.080 --> 0:20:36.720
<v Speaker 1>we've just talked about, Australia as a result could hurt

0:20:36.840 --> 0:20:39.880
<v Speaker 1>economically even more. And this all comes at a time

0:20:39.880 --> 0:20:45.080
<v Speaker 1>when America's economy in comparison, is relatively stable, so no

0:20:45.119 --> 0:20:48.240
<v Speaker 1>one knows what's happening next. But Australia really could get

0:20:48.280 --> 0:20:52.760
<v Speaker 1>caught up in economic uncertainty if things become more unstable

0:20:52.760 --> 0:20:57.200
<v Speaker 1>for China because of these US China trade tensions.

0:20:58.080 --> 0:21:00.919
<v Speaker 2>I am no expert on the sheaf market, but I

0:21:00.920 --> 0:21:02.800
<v Speaker 2>feel like the one thing I do know is that

0:21:03.000 --> 0:21:07.880
<v Speaker 2>uncertainty or extreme uncertainty is never a good thing for

0:21:08.000 --> 0:21:11.080
<v Speaker 2>the share market. Soone knows what's going to happen next.

0:21:11.200 --> 0:21:14.640
<v Speaker 2>That's when there does seem to be these sudden downturns

0:21:14.720 --> 0:21:17.000
<v Speaker 2>or downturns over time. But I don't know. Like I said,

0:21:17.119 --> 0:21:20.200
<v Speaker 2>I'm not an expert on specifically share market.

0:21:20.280 --> 0:21:22.639
<v Speaker 1>Well, I think you're more of an expert than you think, Billy.

0:21:22.720 --> 0:21:27.760
<v Speaker 1>And certainly the volatility of these kind of international diplomatic

0:21:27.800 --> 0:21:32.159
<v Speaker 1>relationships when we have global leaders taking big swings in

0:21:32.280 --> 0:21:36.440
<v Speaker 1>terms of tariffs, that has to lead to that uncertainty,

0:21:36.760 --> 0:21:39.480
<v Speaker 1>but we will keep a close eye on it as always.

0:21:39.920 --> 0:21:42.320
<v Speaker 2>Thank you so much for listening and thanks for joining

0:21:42.359 --> 0:21:42.960
<v Speaker 2>us em.

0:21:42.800 --> 0:21:43.879
<v Speaker 1>Thank you so much, Billy.

0:21:43.920 --> 0:21:46.720
<v Speaker 3>That was a great explainer, thanks to your ten geography

0:21:46.800 --> 0:21:49.720
<v Speaker 3>lessons very much did me. Well, just quickly before you

0:21:49.760 --> 0:21:52.480
<v Speaker 3>go today, if you want to help TDA grow, it

0:21:52.520 --> 0:21:55.080
<v Speaker 3>would mean the world to us. If you support our

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0:22:13.880 --> 0:22:16.320
<v Speaker 1>Thanks again for listening to today's episode. We will be

0:22:16.359 --> 0:22:19.520
<v Speaker 1>back again this afternoon with some headlines, but until then,

0:22:19.720 --> 0:22:20.520
<v Speaker 1>have a great day.

0:22:24.760 --> 0:22:27.040
<v Speaker 2>My name is Lily Maddon and I'm a proud Arunda

0:22:27.280 --> 0:22:32.080
<v Speaker 2>Bungelung Caalcutin woman from Gadighl country. The Daily oz acknowledges

0:22:32.160 --> 0:22:34.320
<v Speaker 2>that this podcast is recorded on the lands of the

0:22:34.320 --> 0:22:37.880
<v Speaker 2>Gadighl people and pays respect to all Aboriginal and Torres

0:22:37.920 --> 0:22:40.840
<v Speaker 2>Strait Island and nations. We pay our respects to the

0:22:40.840 --> 0:22:43.640
<v Speaker 2>first peoples of these countries, both past and present.