Yesterday (6 November) saw the world watch with fixated eyes as Donald Trump sailed to a decisive victory in the United States Presidential election, a result with certain ramifications for the global trade and maritime industries.
Down under, President-elect Trump’s upcoming second presidency is expected to bring changes to Australia’s trade conditions, with knock on effects for maritime and shipping generally.
Andrew Hudson is a trade law expert and Partner at the Melbourne-based Rigby Cooke Lawyers, and spoke to DCN regarding the potential impacts of Trump’s upcoming presidency on Australian industry.
Mr Hudson said of the result itself, “The size of the win by the Trump administration (let alone the win itself) seems to have come as a surprise to many who provided earlier commentary on the likely outcome of the election”.
“The Republican party is close to control of Congress which may facilitate the passage of new legislation by the Trump Administration in addition to President Trump’s ability to create and implement his various new policies by Executive Order.”
Mr Hudson said that while President-elect Trump and his administration can only commence implementing its agenda until after Inauguration in January next year, it is possible to identify relevant issues on which they will be working, with the general view being that trade policy will be more radical and disruptive than during the first Trump administration.
He affirmed his belief the United States will not be so much “isolationist” as more heavily engaged in policies to advance the perceived interests of United States on an “America First” basis.
“That is likely to see continuation of existing tariffs introduced during the first Trump Administration on certain steel, aluminium and other products which were increased during the Biden administration,” Mr Hudson said.
“While Australian products were largely exempted from such tariffs, there will be a question whether that exemption will continue.
“Trump has also flagged the introduction of increased general tariffs including raising tariffs on Chinese imports to at least 60% and applying tariffs of 10-20% on all imported goods.”
Mr Hudson affirms the argument is that this will “protect and assist” United States industries and jobs even though, in reality there will be significant additional costs to United States consumers of the relevant goods.
On potential geopolitical consequences of these tariffs, Mr Hudson commented, “These new tariffs are likely to create trade tension (and retaliation) with China and other countries supplying goods (such as the EU)”.
“Even though Australia has an Free Trade Agreement (FTA) with the US, the US may characterise the new tariffs as somehow outside of the FTA under legislation protected from the FTA.
“Australian exports will watch that development with interest.”
Mr Hudson says more tariffs could lead to China and other countries seeking to shift more of their production at lower prices into Australian markets, raising threats to our industries.
“Based on the previous Trump administration, the United States may also start to withdraw from international obligations such as the WTO and NATO leading to more uncertainty and more increases in transport costs.”
President-elect Trump will become only the second US President since Grover Cleveland in the 19th Century to serve non-consecutive terms in the White House.
President-elect Trump’s decisive victory over Democratic Party nominee Kamala Harris included his winning of the popular vote, which he was unable to achieve in his 2016 victory, and the result completes Trump’s political comeback following his loss in the previous election.
