Albanese lost in translation as he heads to Beijing
But the willingness of this US president to trample on the diplomatic sensitivities of close allies doesn't give an Australian prime minister the same leeway. Not when the power, economic and security balance is so unequal.
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Sydney Morning Herald
43 minutes ago
- Sydney Morning Herald
We didn't get that rate relief, but Australia remains the lucky country
The reason the Reserve Bank can be a bit more indulgent on its monetary policy in future is because the inflation monster has largely been tamed, and this has been achieved without any debilitating increase in unemployment. Loading So there is another tick. And while many economies are panicking about the effects of Donald Trump's imposition of tariffs and their rising inflationary impact, evidence suggests that Australia, perversely, will be a net beneficiary of this otherwise debilitating trade policy. Of course, the uncertainty of the ad hoc and rapidly changing and unpredictable imposition of US trade levies brings with it uncertainty for all countries including Australia, and raises the risk of slower global growth. But according to a report this week from the Productivity Commission, its modelling shows that if one excludes the impact of uncertainty, 'the proposed US tariff changes could have a small, positive effect on Australia's economy. The results suggest that cheaper imports from the rest of the world, and an outflow of productive capital from the US and highly 'tariffed' economies, would slightly increase Australian production.' It was only a few months back that headlines screamed of the damage that would be wrought by tariffs on our steel and aluminium. These fears were, of course, overblown given our exports of these products account for less than a combined $1 billion a year. Rather, the Productivity Commission found that US 'Liberation Day' tariffs and tariffs on aluminium, steel and automobiles and parts could lead to an increase in Australian real GDP of 0.37 per cent. It says that the impact of Trump's tariffs would be negative on Australia if our government sought to impose retaliatory tariffs, but there is no suggestion that the Albanese government would do so. Thus, by several measures Australia is sitting in a sweet spot relative to many – if not most – other countries. Loading The largest shadow on the horizon is the potential fall in demand from China for Australian iron ore and the associated decline in its price. This would play poorly for Australia's sovereign balance sheet, putting pressure on the budget deficit. Based on an expected rate cut next month of 25 basis points to 3.6 per cent, a $600,000 mortgage would cost $100 a month less and take to $300 the monthly savings since the Reserve Bank started easing monetary policy in February. And while the US market was rattled and fell by almost 1 per cent on Monday night about the prospects of large tariffs being placed on Japan and South Korea, the extension of a deadline to August 1, 2025, suggests a better trade agreement over the next couple of weeks.
The Age
44 minutes ago
- The Age
We didn't get that rate relief, but Australia remains the lucky country
The reason the Reserve Bank can be a bit more indulgent on its monetary policy in future is because the inflation monster has largely been tamed, and this has been achieved without any debilitating increase in unemployment. Loading So there is another tick. And while many economies are panicking about the effects of Donald Trump's imposition of tariffs and their rising inflationary impact, evidence suggests that Australia, perversely, will be a net beneficiary of this otherwise debilitating trade policy. Of course, the uncertainty of the ad hoc and rapidly changing and unpredictable imposition of US trade levies brings with it uncertainty for all countries including Australia, and raises the risk of slower global growth. But according to a report this week from the Productivity Commission, its modelling shows that if one excludes the impact of uncertainty, 'the proposed US tariff changes could have a small, positive effect on Australia's economy. The results suggest that cheaper imports from the rest of the world, and an outflow of productive capital from the US and highly 'tariffed' economies, would slightly increase Australian production.' It was only a few months back that headlines screamed of the damage that would be wrought by tariffs on our steel and aluminium. These fears were, of course, overblown given our exports of these products account for less than a combined $1 billion a year. Rather, the Productivity Commission found that US 'Liberation Day' tariffs and tariffs on aluminium, steel and automobiles and parts could lead to an increase in Australian real GDP of 0.37 per cent. It says that the impact of Trump's tariffs would be negative on Australia if our government sought to impose retaliatory tariffs, but there is no suggestion that the Albanese government would do so. Thus, by several measures Australia is sitting in a sweet spot relative to many – if not most – other countries. Loading The largest shadow on the horizon is the potential fall in demand from China for Australian iron ore and the associated decline in its price. This would play poorly for Australia's sovereign balance sheet, putting pressure on the budget deficit. Based on an expected rate cut next month of 25 basis points to 3.6 per cent, a $600,000 mortgage would cost $100 a month less and take to $300 the monthly savings since the Reserve Bank started easing monetary policy in February. And while the US market was rattled and fell by almost 1 per cent on Monday night about the prospects of large tariffs being placed on Japan and South Korea, the extension of a deadline to August 1, 2025, suggests a better trade agreement over the next couple of weeks.
7NEWS
an hour ago
- 7NEWS
Tesla shares slump after Elon Musk announces new political party
Tesla's stock price plunged by around seven per cent on Monday, the first day of trading after company CEO Elon Musk announced he would form the 'America Party' over the weekend. The move drives another wedge between Mr Musk and US President Donald Trump, who criticised the Tesla chief's plan to challenge the country's existing two-party political system on his own social media platform. 'The one thing Third Parties are good for is the creation of Complete and Total DISRUPTION & CHAOS, and we have enough of that with the Radical Left Democrats, who have lost their confidence and their minds!' said President Trump in a Truth Social post on Sunday (July 6). Hundreds of new car deals are available through CarExpert right now. Get the experts on your side and score a great deal. Browse now. 'I think it's ridiculous to start a third party. We have a tremendous success with the Republican Party. The Democrats have lost their way, but it's always been a two-party system, and I think starting a third party just adds to confusion,' he told reporters the same day. A day earlier on Saturday (July 5), Mr Musk said a poll he conducted on his own social media platform, X, showed resoundingly that Americans want a third political party. 'By a factor of 2 to 1, you want a new political party and you shall have it,' he posted on X. 'When it comes to bankrupting our country with waste & graft, we live in a one-party system, not a democracy. Today, the America Party is formed to give you back your freedom.' By noon on Monday, however, Tesla stock had fallen by 7.6 per cent or about $21 per share, seemingly due to fears from investors that politics would damage the Tesla brand, wiping about US$15 billion (A$23.05bn) from the market value of the US electric car maker, although Mr Musk remains the world's richest person. At the close of NASDAQ stock exchange trading yesterday, Tesla shares were down by US$21.41 or 6.79 per cent, to US$293.94, and are now down by about 14 per cent since early June, when Mr Musk first publicly criticised President Trump and the Republican-backed One Big Beautiful Bill. Tesla stocks are down 31 per cent since Mr Trump's inauguration in January, and the company last week reported almost 14 per cent fewer deliveries in the second quarter of this year. In its worst sales performance since 2022, Tesla has now posted two consecutive quarterly declines in vehicle deliveries in 2025, amid controversy and protests about Mr Musk's previous involvement with the Trump administration and the Department of Government Efficiency (DOGE). After donating at least US$277 million (A$425.04m) to the Trump camp during the 2024 US election campaign and then heading up DOGE, the CEO of both Tesla and SpaceX began a very public feud with President Trump when he said the administration's new funding bill would plunge Americans into debut for generations to come. Signed into law on July 4, the One Big Beautiful Bill Act is forecast to add about US$3.4 trillion (A$5.22tn) to the US national deficit over the coming decade, according to estimates by the Congressional Budget Office. However, the Trump administration has dismissed estimates like these on the basis they do not factor in economic growth under the bill, and President Trump has accused Mr Musk of criticising the bill because it will end federal subsidies for Tesla. But Mr Musk has long encouraged the Trump administration to axe US government tax credits for electric vehicles, and after President Trump threatened to cancel government contracts awarded to Mr Musk's companies, he said on X that SpaceX would 'begin decommissioning its [the US government's] Dragon spacecraft immediately', putting several US space programs at risk. SpaceX is one of the US government's largest defence contractors and, apart from Tesla, Mr Musk also heads up The Boring Company, Starlink, Neuralink and xAI.
