1 00:00:00,520 --> 00:00:04,000 Speaker 1: Already and this is the daily This is the Daily 2 00:00:04,120 --> 00:00:15,920 Speaker 1: ohs oh, now it makes sense. Good morning and welcome 3 00:00:15,960 --> 00:00:18,320 Speaker 1: to the Daily OS. It's Tuesday, the eighth of April. 4 00:00:18,360 --> 00:00:20,040 Speaker 1: I'm Billy Fitzimon's. 5 00:00:19,480 --> 00:00:20,440 Speaker 2: I'm Sam Becazowski. 6 00:00:20,680 --> 00:00:23,079 Speaker 1: If you've looked at the news over the past couple 7 00:00:23,120 --> 00:00:25,800 Speaker 1: of days, or if you have shares and you've checked them, 8 00:00:26,239 --> 00:00:28,720 Speaker 1: you would know that there has been a significant fall 9 00:00:28,840 --> 00:00:32,239 Speaker 1: in the stock market. Just yesterday in Australia, more than 10 00:00:32,280 --> 00:00:36,120 Speaker 1: one hundred billion dollars was wiped from the Australian share market. 11 00:00:36,280 --> 00:00:38,919 Speaker 1: It's all because of the tariffs that were imposed by 12 00:00:39,000 --> 00:00:43,280 Speaker 1: US President Donald Trump on all countries, including Australia last week. 13 00:00:43,640 --> 00:00:46,640 Speaker 1: To understand in more detail why this has happened and 14 00:00:46,680 --> 00:00:49,199 Speaker 1: what it means for the average Australian today, I am 15 00:00:49,240 --> 00:00:54,600 Speaker 1: interviewing the chief economist at the Australia Institute, Greg Jericho. 16 00:00:57,120 --> 00:01:00,200 Speaker 2: Billy, this is one of those topics where there is 17 00:01:00,240 --> 00:01:03,800 Speaker 2: so much economic jargon flying around it can be hard 18 00:01:03,840 --> 00:01:05,319 Speaker 2: to keep up and it can be hard to find 19 00:01:05,319 --> 00:01:06,400 Speaker 2: a way into this story. 20 00:01:06,640 --> 00:01:08,240 Speaker 1: Yeah, I feel like this is one of those topics 21 00:01:08,280 --> 00:01:10,680 Speaker 1: where I really should have been paying more attention in 22 00:01:10,720 --> 00:01:12,279 Speaker 1: my year turn commerce class. 23 00:01:12,400 --> 00:01:14,959 Speaker 2: Oh, I definitely missed that, Yeah, and I had to 24 00:01:14,959 --> 00:01:17,120 Speaker 2: catch up. It's taken a long time. We did a 25 00:01:17,160 --> 00:01:20,520 Speaker 2: show on that last week, Zara and I and maybe 26 00:01:20,520 --> 00:01:22,160 Speaker 2: you will throw a link in the show notes. It's 27 00:01:22,160 --> 00:01:25,319 Speaker 2: interesting to listen to that now almost in retrospect, because 28 00:01:25,319 --> 00:01:27,480 Speaker 2: that was kind of almost what we thought was going 29 00:01:27,520 --> 00:01:29,760 Speaker 2: to happen. On Liberation Day, that was the big day 30 00:01:29,800 --> 00:01:31,760 Speaker 2: that Trump announced all the tariffs. He held up that 31 00:01:31,800 --> 00:01:34,600 Speaker 2: big placard with how much countries are going to get 32 00:01:34,880 --> 00:01:37,479 Speaker 2: essentially taxed on all the goods that arrive into the US. 33 00:01:37,880 --> 00:01:40,000 Speaker 2: And it turns out we were pretty much spot on. 34 00:01:40,040 --> 00:01:41,920 Speaker 2: The rest of the world was as well. This was 35 00:01:41,920 --> 00:01:42,640 Speaker 2: a major move. 36 00:01:43,280 --> 00:01:43,560 Speaker 3: Yeah. 37 00:01:43,560 --> 00:01:45,920 Speaker 1: And so just to give you a really quick overview, 38 00:01:45,920 --> 00:01:47,600 Speaker 1: if you're hearing the word tariffs and you're not quite 39 00:01:47,640 --> 00:01:50,640 Speaker 1: sure what it means, it is a tax on import, 40 00:01:50,760 --> 00:01:54,080 Speaker 1: So it means that it's more expensive to import something 41 00:01:54,280 --> 00:01:57,600 Speaker 1: into a country, in this case America. Now, like you 42 00:01:57,680 --> 00:02:00,960 Speaker 1: just said, Sam, last week, Trump announced new tariffs on 43 00:02:01,160 --> 00:02:05,080 Speaker 1: all imports into America and that includes a blanket ten 44 00:02:05,120 --> 00:02:09,360 Speaker 1: percent tax on all Australian goods entering the US. And 45 00:02:09,400 --> 00:02:12,040 Speaker 1: he said he mainly did this because of something called 46 00:02:12,080 --> 00:02:13,160 Speaker 1: a trade deficit. 47 00:02:13,360 --> 00:02:15,000 Speaker 2: And that's another term that comes up a lot. So 48 00:02:15,040 --> 00:02:17,520 Speaker 2: we've got tariffs. Now talk me through a trade deficit. 49 00:02:17,800 --> 00:02:21,160 Speaker 1: Okay, I'm going to explain this using apples. So let's 50 00:02:21,160 --> 00:02:23,920 Speaker 1: say Sam, you and I are both nations, and in 51 00:02:24,000 --> 00:02:27,000 Speaker 1: one year I sent you one hundred apples and you 52 00:02:27,120 --> 00:02:30,520 Speaker 1: sent me seventy apples. That would mean I am in 53 00:02:30,560 --> 00:02:33,920 Speaker 1: a trade deficit of thirty apples because I sent you 54 00:02:34,040 --> 00:02:35,960 Speaker 1: thirty more apples than you sent me. 55 00:02:36,360 --> 00:02:38,760 Speaker 2: Right, So I'm thinking fruit bowls, yes, And I've got 56 00:02:38,840 --> 00:02:41,560 Speaker 2: more apples in my fruit bowl after our trade. 57 00:02:41,280 --> 00:02:44,080 Speaker 1: Relationship because you took more from me, exactly. And so 58 00:02:44,240 --> 00:02:47,440 Speaker 1: President Trump wants to reduce that gap. He wants you 59 00:02:47,560 --> 00:02:50,400 Speaker 1: to buy just as many apples from me as I 60 00:02:50,440 --> 00:02:53,400 Speaker 1: am sending to you. And he argued that a trade 61 00:02:53,440 --> 00:02:56,799 Speaker 1: deficit like this means that countries, he says, are ripping 62 00:02:56,800 --> 00:03:00,440 Speaker 1: off Americans and that America needs to reassert it self 63 00:03:00,480 --> 00:03:03,480 Speaker 1: in the global economy. Now, in terms of who this 64 00:03:03,600 --> 00:03:07,320 Speaker 1: impacts the most, it's actually US consumers because those are 65 00:03:07,360 --> 00:03:10,600 Speaker 1: the ones who absorb the cost of these tariffs, because 66 00:03:10,600 --> 00:03:13,560 Speaker 1: it essentially means that it makes it more expensive for 67 00:03:13,680 --> 00:03:17,160 Speaker 1: them to buy things from other countries. And so Trump's 68 00:03:17,160 --> 00:03:20,920 Speaker 1: big hope here is that Americans don't buy stuff made 69 00:03:21,040 --> 00:03:25,040 Speaker 1: overseas like in Australia because it's now too expensive, and 70 00:03:25,080 --> 00:03:29,200 Speaker 1: instead they'll be more encouraged to buy US made goods. 71 00:03:29,480 --> 00:03:31,680 Speaker 1: And his hope is that by doing this, the US 72 00:03:31,760 --> 00:03:32,919 Speaker 1: economy will grow. 73 00:03:33,160 --> 00:03:35,400 Speaker 2: I heard a really good example over the weekend of 74 00:03:35,480 --> 00:03:40,800 Speaker 2: T shirts. So America only produces three percent of all 75 00:03:40,840 --> 00:03:43,320 Speaker 2: the T shirts that are sold to Americans in a year. 76 00:03:43,600 --> 00:03:45,880 Speaker 2: So ninety seven percent of T shirts bought by an 77 00:03:45,920 --> 00:03:50,920 Speaker 2: American come from overseas. That in Trump's world, he's trying 78 00:03:50,960 --> 00:03:53,480 Speaker 2: to get that to more be one hundred percent. And 79 00:03:53,560 --> 00:03:55,320 Speaker 2: so he's going to make the T shirts that arrive 80 00:03:55,480 --> 00:03:58,000 Speaker 2: from the Philippines or Taiwan, or Sri lank or Cambodi 81 00:03:58,120 --> 00:04:00,600 Speaker 2: or China. He's going to make those T shirts more expensive. 82 00:04:00,760 --> 00:04:04,640 Speaker 1: And that is exactly why he introduced these tariffs. Now, 83 00:04:04,720 --> 00:04:06,880 Speaker 1: if you're listening to this and you're a bit lost, 84 00:04:06,880 --> 00:04:08,920 Speaker 1: don't worry. I think the one thing that I want 85 00:04:08,920 --> 00:04:11,040 Speaker 1: to point out before we dive into this chat with 86 00:04:11,120 --> 00:04:13,800 Speaker 1: Greg Jericho is I think the word that you need 87 00:04:13,840 --> 00:04:17,200 Speaker 1: to keep in mind is uncertainty. Even if you don't 88 00:04:17,200 --> 00:04:19,800 Speaker 1: feel like you're fully grappling with the economics of it all, 89 00:04:19,839 --> 00:04:23,279 Speaker 1: because it is really complicated. The core thing to remember 90 00:04:23,520 --> 00:04:25,960 Speaker 1: is that the events of the past few weeks have 91 00:04:26,120 --> 00:04:30,080 Speaker 1: led to investors feeling uncertain because they can't predict what 92 00:04:30,240 --> 00:04:32,559 Speaker 1: is going to happen next. No one knows what Trump 93 00:04:32,640 --> 00:04:35,520 Speaker 1: is going to do next, and whenever there is uncertainty, 94 00:04:35,880 --> 00:04:39,760 Speaker 1: we usually always see crashes like this in the stock market. 95 00:04:39,800 --> 00:04:41,800 Speaker 1: Even if you think about the pandemic, which you'll hear 96 00:04:41,880 --> 00:04:44,600 Speaker 1: Greg Jericho mention, that's another time when there was so 97 00:04:44,839 --> 00:04:48,880 Speaker 1: much uncertainty and that also led to a stock market crash. 98 00:04:49,000 --> 00:04:52,000 Speaker 2: I always find it helpful to remember that the economy 99 00:04:52,040 --> 00:04:54,840 Speaker 2: is actually based on psychology. It's based on how people 100 00:04:54,880 --> 00:04:57,280 Speaker 2: are feeling. And when there's a bit of fear and 101 00:04:57,279 --> 00:04:59,360 Speaker 2: a bit of panic and a bit of uncertainty, that's 102 00:04:59,400 --> 00:05:02,080 Speaker 2: when you see major moves in the market. So let's 103 00:05:02,080 --> 00:05:04,560 Speaker 2: hear that chat now with Greg Jericho. 104 00:05:04,960 --> 00:05:07,400 Speaker 1: Greg Jericho, thank you so much for joining the Daily OS. 105 00:05:07,839 --> 00:05:09,160 Speaker 3: Norah's Billy great to be here. 106 00:05:09,680 --> 00:05:13,560 Speaker 1: So we are seeing another significant fall in the stock 107 00:05:13,600 --> 00:05:16,760 Speaker 1: market at the moment. Before we get to that, though, 108 00:05:16,839 --> 00:05:19,520 Speaker 1: can you take me through what US President Donald Trump 109 00:05:19,600 --> 00:05:21,240 Speaker 1: announced last week. 110 00:05:23,360 --> 00:05:28,400 Speaker 4: Oh god, how to say it without breaking into sad laughter, 111 00:05:28,480 --> 00:05:33,440 Speaker 4: because what he announced was basically tariff's on every single 112 00:05:33,920 --> 00:05:37,880 Speaker 4: nation on earth. Initially with the story was he was 113 00:05:37,920 --> 00:05:40,640 Speaker 4: going to do this thing called reciprocal tariffs, which is 114 00:05:40,720 --> 00:05:43,760 Speaker 4: pretty straightforward. If you've got a ten percent tariff on 115 00:05:43,800 --> 00:05:46,680 Speaker 4: our stuff, we'll put a ten percent tariff on your stuff. 116 00:05:47,160 --> 00:05:49,440 Speaker 3: But he didn't do that at all. What he did was. 117 00:05:49,440 --> 00:05:53,400 Speaker 4: He worked out what was the trade deficit that America 118 00:05:53,520 --> 00:05:58,440 Speaker 4: had with every country, and so if let's say Vietnam 119 00:05:58,880 --> 00:06:03,080 Speaker 4: exported ninety percent more stuff to America than it bought 120 00:06:03,120 --> 00:06:06,200 Speaker 4: from America, then he said, oh, you've got a ninety 121 00:06:06,240 --> 00:06:09,400 Speaker 4: percent tariff on us, so we'll have that and we'll 122 00:06:09,400 --> 00:06:12,000 Speaker 4: put a forty five percent tariff on you. And it 123 00:06:12,120 --> 00:06:15,159 Speaker 4: made no sense because a lot of these nations are poor, 124 00:06:15,520 --> 00:06:18,080 Speaker 4: they're small, a lot smaller than America, so of course 125 00:06:18,080 --> 00:06:20,320 Speaker 4: they're going to sell more stuff to America than they're 126 00:06:20,320 --> 00:06:23,080 Speaker 4: going to buy from it. And places like Australia, where 127 00:06:23,120 --> 00:06:26,320 Speaker 4: we actually do buy more stuff from America than we 128 00:06:26,440 --> 00:06:28,719 Speaker 4: sell to it, he couldn't do that, so he just 129 00:06:28,760 --> 00:06:32,400 Speaker 4: put a flat ten percent tariff on nations like Australia. 130 00:06:32,520 --> 00:06:34,279 Speaker 3: So that's pretty much what he did. 131 00:06:34,360 --> 00:06:38,680 Speaker 4: And really what that means though, he decided to make 132 00:06:38,920 --> 00:06:44,400 Speaker 4: everything that America imports from anywhere more expensive for Americans 133 00:06:44,440 --> 00:06:48,400 Speaker 4: to buy, and that really has sent everything into a 134 00:06:48,440 --> 00:06:49,719 Speaker 4: bit of a meltdown. 135 00:06:50,160 --> 00:06:53,839 Speaker 1: And so he's made it more expensive for Americans to 136 00:06:53,920 --> 00:06:57,919 Speaker 1: buy products from Australia. But for those of us in Australia, 137 00:06:58,080 --> 00:07:01,080 Speaker 1: what's the tangible impact on us? Or is it more 138 00:07:01,320 --> 00:07:04,640 Speaker 1: businesses in Australia that are impacted than the average consumer. 139 00:07:05,360 --> 00:07:08,840 Speaker 4: Yeah, Australian consumers really shouldn't be affected at all. If 140 00:07:08,880 --> 00:07:11,200 Speaker 4: you go into a shop and someone says, oh, we've 141 00:07:11,240 --> 00:07:14,640 Speaker 4: had to raise prices because of the tariffs, call bullshit 142 00:07:14,680 --> 00:07:19,320 Speaker 4: on them straight away. Because tariffs are paid by the 143 00:07:19,360 --> 00:07:23,280 Speaker 4: country that levies them. So America put all these tariffs 144 00:07:23,320 --> 00:07:27,280 Speaker 4: on other nations who pays the people importing them. So 145 00:07:27,960 --> 00:07:31,280 Speaker 4: if an American wants to buy some bee from Australia, 146 00:07:31,320 --> 00:07:34,480 Speaker 4: suddenly it's going to cost well, potentially ten percent more 147 00:07:34,520 --> 00:07:37,600 Speaker 4: than it did a week ago. It does not affect 148 00:07:38,040 --> 00:07:41,880 Speaker 4: our consumers. The cost of things in Woolli's calls doesn't 149 00:07:41,880 --> 00:07:45,480 Speaker 4: affect all. It does affect businesses. Obviously, if you're a 150 00:07:45,520 --> 00:07:49,960 Speaker 4: business that is selling stuff to America, well, now it's 151 00:07:50,000 --> 00:07:53,280 Speaker 4: going to cost the American importer tempercent more to buy 152 00:07:53,320 --> 00:07:56,040 Speaker 4: that stuff from you, so they might buy a bit less. 153 00:07:56,600 --> 00:07:59,560 Speaker 4: So we don't even really know what the impact on 154 00:08:00,000 --> 00:08:01,040 Speaker 4: owning business. 155 00:08:00,800 --> 00:08:01,320 Speaker 3: Is going to be. 156 00:08:01,960 --> 00:08:06,800 Speaker 4: I think, really we shouldn't be overreacting. It's not going 157 00:08:06,880 --> 00:08:08,280 Speaker 4: to affect them too much. 158 00:08:08,880 --> 00:08:09,520 Speaker 3: Will have an. 159 00:08:09,400 --> 00:08:11,720 Speaker 4: Impact mainly because Americans are are all going to be 160 00:08:11,720 --> 00:08:15,120 Speaker 4: a lot poorer because everything's a lot more expensive. Their 161 00:08:15,200 --> 00:08:17,920 Speaker 4: incomes haven't gone up, so they have to cut back 162 00:08:17,960 --> 00:08:19,040 Speaker 4: on how much they can buy. 163 00:08:19,720 --> 00:08:22,880 Speaker 1: Okay, But the way that it has potentially impacted the 164 00:08:22,920 --> 00:08:26,440 Speaker 1: average Australian consumer is if you have shares and we 165 00:08:26,600 --> 00:08:29,360 Speaker 1: have seen a crash. Can I use that word crash 166 00:08:29,440 --> 00:08:31,320 Speaker 1: or is that a technical term that there has to 167 00:08:31,320 --> 00:08:33,480 Speaker 1: be a certain amount of full before you can use 168 00:08:33,520 --> 00:08:33,840 Speaker 1: that word. 169 00:08:34,320 --> 00:08:37,200 Speaker 4: Oh yeah, I mean I don't know if it's been 170 00:08:37,240 --> 00:08:39,640 Speaker 4: a crash yet. It has just been a big plunge 171 00:08:39,679 --> 00:08:42,400 Speaker 4: I think is the nice way of putting it. But 172 00:08:42,440 --> 00:08:44,160 Speaker 4: I mean, you know, the value of our stock is 173 00:08:44,240 --> 00:08:46,200 Speaker 4: change is full and ten sent in the last week 174 00:08:46,280 --> 00:08:50,800 Speaker 4: since Donald Trump had his moment of madness. Crashes are 175 00:08:50,840 --> 00:08:53,840 Speaker 4: more sort of ten to fifteen percent in a day. 176 00:08:54,040 --> 00:08:58,400 Speaker 4: When you start seeing that, that's when you start thinking crash. 177 00:08:57,640 --> 00:09:01,000 Speaker 1: And so why specifically has it had? Like what's the 178 00:09:01,160 --> 00:09:04,920 Speaker 1: relationship between tariffs and a fall in the stock market? 179 00:09:05,320 --> 00:09:08,960 Speaker 4: Yeah, really, what the investors are worrying about, they're looking 180 00:09:08,960 --> 00:09:12,080 Speaker 4: at what's happening with China as much as anything. Is 181 00:09:12,160 --> 00:09:15,400 Speaker 4: that one, he's put a pretty big tariff on China. 182 00:09:15,600 --> 00:09:19,120 Speaker 4: China has retaliated with a big tariff against America. So 183 00:09:19,240 --> 00:09:22,560 Speaker 4: that's going to make everything more expensive in both America 184 00:09:22,600 --> 00:09:26,200 Speaker 4: and China. So both of their economies are kind of 185 00:09:26,200 --> 00:09:29,240 Speaker 4: going to slow down because they're going to be spending less, 186 00:09:29,400 --> 00:09:32,920 Speaker 4: they're going to be producing less. And if China's economy 187 00:09:33,000 --> 00:09:36,200 Speaker 4: is weaker America's economy is weaker, then there is this 188 00:09:36,280 --> 00:09:41,400 Speaker 4: belief that, oh, Australian mining companies especially are going to 189 00:09:41,440 --> 00:09:44,439 Speaker 4: be worse off. And when that happens, Irvan's like, well, 190 00:09:44,440 --> 00:09:46,240 Speaker 4: I don't want to hold these shares anymore because they're 191 00:09:46,240 --> 00:09:48,960 Speaker 4: going to be worth less, so let's get out of them. 192 00:09:49,000 --> 00:09:51,720 Speaker 4: So that's really what we're seeing everyone kind of freaking 193 00:09:51,760 --> 00:09:56,240 Speaker 4: out thinking, oh, we're in for tough times. Maybe I 194 00:09:56,240 --> 00:09:57,760 Speaker 4: should put my money elsewhere. 195 00:09:58,360 --> 00:10:02,280 Speaker 1: And in the context of how bad is this one? 196 00:10:02,760 --> 00:10:05,080 Speaker 3: Oh, look, it's significant. 197 00:10:05,200 --> 00:10:07,360 Speaker 4: It's not quite as bad as we saw during the 198 00:10:07,440 --> 00:10:11,400 Speaker 4: GFC or even during the first sort of minutes of 199 00:10:11,440 --> 00:10:15,600 Speaker 4: the pandemic, but this is pretty pretty significant. It really 200 00:10:15,640 --> 00:10:17,880 Speaker 4: has kind of wiped out all of the gains of 201 00:10:18,000 --> 00:10:19,120 Speaker 4: the past year or so. 202 00:10:19,679 --> 00:10:21,800 Speaker 3: You know. It's not a case of we're in. 203 00:10:21,800 --> 00:10:25,680 Speaker 4: Great depression territory or things like that, but it's one 204 00:10:25,720 --> 00:10:28,280 Speaker 4: that is certainly going to be remembered. And what is 205 00:10:28,559 --> 00:10:32,440 Speaker 4: more concerning is it seems to be ongoing. You know, 206 00:10:32,520 --> 00:10:36,080 Speaker 4: we had a bit of a fall on Thursday and 207 00:10:36,120 --> 00:10:39,720 Speaker 4: then on Friday, and there was no calming over the weekend. 208 00:10:40,000 --> 00:10:43,200 Speaker 4: It's this ongoing impact of everyone thinking, I don't know 209 00:10:43,240 --> 00:10:46,280 Speaker 4: if Trump has any clue what he's doing, and he 210 00:10:46,360 --> 00:10:49,040 Speaker 4: seems to think he's doing a good thing, which means 211 00:10:49,200 --> 00:10:51,920 Speaker 4: maybe he's not going to reverse it. So that's what 212 00:10:52,000 --> 00:10:54,360 Speaker 4: everyone's scared about. And the worry is that it's just 213 00:10:54,400 --> 00:10:57,280 Speaker 4: going to keep getting worse and worse, and that that 214 00:10:57,440 --> 00:10:58,520 Speaker 4: is certainly a big worry. 215 00:10:59,040 --> 00:11:01,080 Speaker 1: Is this all in the hands Trump? Like, is he 216 00:11:01,280 --> 00:11:04,240 Speaker 1: the only one that can kind of turn this around? 217 00:11:04,840 --> 00:11:05,480 Speaker 3: Pretty much. 218 00:11:05,559 --> 00:11:07,800 Speaker 4: I mean, all of this has happened because of Trump, 219 00:11:08,200 --> 00:11:12,160 Speaker 4: and we know America it's easily the biggest economy in 220 00:11:12,200 --> 00:11:15,760 Speaker 4: the world, China behind it, and so he's the one 221 00:11:15,800 --> 00:11:19,760 Speaker 4: who can pretty much stop all this occurring. If Trump 222 00:11:19,800 --> 00:11:22,720 Speaker 4: decides to keep these tariffs in place, well, then Americans 223 00:11:22,760 --> 00:11:24,680 Speaker 4: are going to be paying a lot more for everything, 224 00:11:25,000 --> 00:11:27,080 Speaker 4: and that means they're going to be buying a lot 225 00:11:27,160 --> 00:11:29,840 Speaker 4: less of stuff. And when you're buying less of stuff, 226 00:11:30,000 --> 00:11:34,280 Speaker 4: then you're producing less around the world. You're employing fewer 227 00:11:34,280 --> 00:11:37,480 Speaker 4: people to produce that, and that has accumulative effect and 228 00:11:37,720 --> 00:11:39,160 Speaker 4: suddenly you're in a recession. 229 00:11:39,880 --> 00:11:42,240 Speaker 1: Do you think there's a chance Trump will reverse his 230 00:11:42,320 --> 00:11:45,240 Speaker 1: tariffs because he doesn't want to go into a recession, right. 231 00:11:45,840 --> 00:11:47,079 Speaker 3: Yeah, Well you'd hope. 232 00:11:47,120 --> 00:11:50,240 Speaker 4: So I think what you're saying is everyone's hope that 233 00:11:50,400 --> 00:11:54,559 Speaker 4: he will pretend that he hasn't backed down, but actually 234 00:11:54,600 --> 00:11:57,640 Speaker 4: back down and he'll declare victory. But the worry is 235 00:11:57,840 --> 00:12:01,280 Speaker 4: he's continuing to go with this line that, oh this, 236 00:12:01,559 --> 00:12:04,240 Speaker 4: you know, there needs to be some strong medicine to 237 00:12:04,280 --> 00:12:07,199 Speaker 4: fix this, and so there will be some pain in 238 00:12:07,240 --> 00:12:09,079 Speaker 4: the short term, but then it's all going to come 239 00:12:09,200 --> 00:12:12,680 Speaker 4: roaring back, and it ain't going to come roaring back 240 00:12:12,800 --> 00:12:17,560 Speaker 4: because the problem is Trump sees a deficit, a trade deficit, 241 00:12:17,600 --> 00:12:22,040 Speaker 4: as America losing, and it's not. It's just Americans getting 242 00:12:22,120 --> 00:12:26,040 Speaker 4: cheaper stuff or getting good quality stuff. I hope that 243 00:12:26,200 --> 00:12:29,839 Speaker 4: he does do his usual thing of back down when 244 00:12:29,840 --> 00:12:32,520 Speaker 4: he's made an error, but make it sound like he's won, 245 00:12:33,280 --> 00:12:36,080 Speaker 4: and all his mega supporters will go, yeah, look at him. 246 00:12:36,120 --> 00:12:38,480 Speaker 4: He got all these great deals done, and everyone who 247 00:12:38,480 --> 00:12:41,520 Speaker 4: actually knows anything will just go, yeah, that was just 248 00:12:41,600 --> 00:12:44,719 Speaker 4: a three months of idiocy that we just endured where 249 00:12:44,720 --> 00:12:47,840 Speaker 4: everyone lost money. But Trump is making it sound like 250 00:12:47,840 --> 00:12:50,040 Speaker 4: it was a win. That's the hope. The problem is 251 00:12:50,080 --> 00:12:52,800 Speaker 4: he's also got some advisors who told him to do 252 00:12:52,840 --> 00:12:56,600 Speaker 4: all this. I worry that he'll keep persisting with that, 253 00:12:56,720 --> 00:12:59,080 Speaker 4: and if he does, the longer this goes on, the 254 00:12:59,120 --> 00:13:02,000 Speaker 4: worst it is for Americas, and as a result, the 255 00:13:02,040 --> 00:13:03,960 Speaker 4: greater the risk that we're going to get caught up 256 00:13:04,000 --> 00:13:05,880 Speaker 4: in all this terrible wash. 257 00:13:06,040 --> 00:13:09,160 Speaker 1: Your expert opinion as an economist is obviously that this 258 00:13:09,280 --> 00:13:12,440 Speaker 1: is a horrible thing. Apart from Trump, Are there any 259 00:13:12,480 --> 00:13:14,439 Speaker 1: economists saying that this is a good thing. 260 00:13:15,280 --> 00:13:17,640 Speaker 4: No, there's no economists out there who are saying this 261 00:13:17,679 --> 00:13:20,480 Speaker 4: is a great thing unless you're someone who's trying to 262 00:13:21,000 --> 00:13:23,880 Speaker 4: curry favor with Trump or or appeal to his type 263 00:13:23,880 --> 00:13:26,160 Speaker 4: of supporters. Everyone else is gone and going this is 264 00:13:26,280 --> 00:13:29,920 Speaker 4: just a bit of idiocy that has just made everything 265 00:13:29,960 --> 00:13:33,480 Speaker 4: more expensive for Americans for no benefit whatsoever. 266 00:13:34,120 --> 00:13:37,119 Speaker 1: Final question, are we heading for a recession? 267 00:13:37,720 --> 00:13:37,920 Speaker 3: Oh? 268 00:13:37,960 --> 00:13:41,720 Speaker 4: Look, I never like predicting those type of things, because 269 00:13:41,760 --> 00:13:44,080 Speaker 4: there are things that can be done. The Reserve Bank 270 00:13:44,120 --> 00:13:46,880 Speaker 4: can cut interest rates, and that seems very likely to 271 00:13:47,000 --> 00:13:48,360 Speaker 4: happen now in May. 272 00:13:48,320 --> 00:13:51,559 Speaker 1: And probably he just explained that why would this result 273 00:13:51,760 --> 00:13:53,840 Speaker 1: in a further interest rate cut? 274 00:13:54,000 --> 00:13:57,960 Speaker 4: Yeah, I mean basically, we've all been worried about inflation, 275 00:13:58,440 --> 00:14:01,720 Speaker 4: and so the Reserve Bank has raised interest rates to 276 00:14:01,760 --> 00:14:05,679 Speaker 4: try and slow the economy to get fewer people employed. Really, 277 00:14:05,800 --> 00:14:08,520 Speaker 4: I mean when the Reserve Bank raises interest rates, it 278 00:14:08,600 --> 00:14:12,680 Speaker 4: means it wants more people to lose jobs, essentially because 279 00:14:12,880 --> 00:14:15,080 Speaker 4: people have got less money to spend in the shops. 280 00:14:15,080 --> 00:14:17,040 Speaker 4: And if you've got less money to spend in the shops, 281 00:14:17,080 --> 00:14:19,840 Speaker 4: then the shop owners going, yeah, I don't think you 282 00:14:19,880 --> 00:14:22,240 Speaker 4: need an extra shift, and actually I'm going to have 283 00:14:22,240 --> 00:14:25,800 Speaker 4: to cut back your shifts completely. But if things look 284 00:14:25,880 --> 00:14:28,560 Speaker 4: like they're slowing down, then the Reserve Bank does the opposite. 285 00:14:28,600 --> 00:14:30,880 Speaker 4: It cuts rates. People feel like, oh, I've got more 286 00:14:30,920 --> 00:14:34,840 Speaker 4: money to spend. Businesses small businesses like, oh it's cheaper 287 00:14:34,880 --> 00:14:37,600 Speaker 4: for me to borrow, so they can borrow. That kind 288 00:14:37,640 --> 00:14:41,160 Speaker 4: of helps keep people employed, helps keep money moving around, 289 00:14:41,320 --> 00:14:44,480 Speaker 4: helps keep the economy going, and so the Reserve Bank 290 00:14:44,480 --> 00:14:48,440 Speaker 4: will definitely look to do that. Certainly we don't need 291 00:14:48,480 --> 00:14:52,280 Speaker 4: to go into recession. But you know, if China slows down, 292 00:14:52,320 --> 00:14:57,119 Speaker 4: if America really goes into recession, if Europe also struggles 293 00:14:57,160 --> 00:15:00,560 Speaker 4: because they're putting tariffs on as well, it's kind of 294 00:15:00,600 --> 00:15:05,000 Speaker 4: hard to avoid everything happening bad in the world happening 295 00:15:05,000 --> 00:15:08,720 Speaker 4: here as well. I mean, we saw fifteen years ago 296 00:15:08,880 --> 00:15:12,360 Speaker 4: during the global Financial crisis, everywhere else in the world 297 00:15:12,680 --> 00:15:15,560 Speaker 4: had the Great Recession. Here in Australia we didn't go 298 00:15:15,600 --> 00:15:19,000 Speaker 4: into recession due to government policies, due to the Reserve 299 00:15:19,040 --> 00:15:22,000 Speaker 4: Bank cutting rates. So you know, it's not a certainty, 300 00:15:22,880 --> 00:15:26,320 Speaker 4: but all the risks are now on the downside. All 301 00:15:26,400 --> 00:15:31,040 Speaker 4: the real concerns are about just how slow things might get. 302 00:15:31,360 --> 00:15:34,920 Speaker 1: Not the rosiest of pictures, but thank you so much 303 00:15:34,960 --> 00:15:36,120 Speaker 1: for explaining it to us. 304 00:15:36,240 --> 00:15:39,320 Speaker 4: Greg Jericho Noah is Billy always good to chat. 305 00:15:39,640 --> 00:15:42,600 Speaker 2: A fascinating chat as always from the Australia Institute's Greg 306 00:15:42,760 --> 00:15:46,120 Speaker 2: Jericho Billy, thank you for facilitating that for us this morning. 307 00:15:46,480 --> 00:15:49,000 Speaker 2: That's all we've got time for on today's episode of 308 00:15:49,040 --> 00:15:51,280 Speaker 2: The Daily Oz. I'm sure there are a lot of 309 00:15:51,360 --> 00:15:53,960 Speaker 2: questions that have come from that podcast. You can always 310 00:15:54,040 --> 00:15:56,520 Speaker 2: jump over to our Instagram and dm us questions that 311 00:15:56,560 --> 00:15:59,880 Speaker 2: you want us to explain, particularly around the global economy. 312 00:16:00,120 --> 00:16:02,400 Speaker 2: We're going to be back in the afternoon with your headlines. 313 00:16:02,480 --> 00:16:08,680 Speaker 2: Until then, have a great date. My name is Lily 314 00:16:08,720 --> 00:16:12,120 Speaker 2: Maddon and I'm a proud Arunda Bungelung Kalkadin woman from 315 00:16:12,120 --> 00:16:13,000 Speaker 2: Gadighl Country. 316 00:16:13,840 --> 00:16:16,960 Speaker 1: The Daily oz acknowledges that this podcast is recorded on 317 00:16:17,000 --> 00:16:19,520 Speaker 1: the lands of the Gadighl people and pays respect to 318 00:16:19,560 --> 00:16:22,880 Speaker 1: all Aboriginal and torrest Rate island and nations. We pay 319 00:16:22,920 --> 00:16:25,840 Speaker 1: our respects to the first peoples of these countries, both 320 00:16:25,920 --> 00:16:26,800 Speaker 1: past and present.