Weekend Edition: A Suttle World Tour

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NAB Morning Call 35 min 2 speakers 5 chapters transcribed 22 days ago
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Phil Dobbie 0:01
The next version of Donald Trump or President Harris, whichever, what does the US economy have in store? And central banks the world over, is there a discernible pattern on who is cutting when and why and by how much? And China, can the economy be saved by government money? Phil Suttle, an independent economist with a wealth of experience, joins me today. The morning call from
Phil Suttle 0:22
NEB. With Phil Dobby. The weekend edition.
Phil Dobbie 0:27
And we should reiterate that the views that you hear on the weekend edition don't necessarily reflect those of NAB, 'cause we talk to thinkers from outside the bank, so we get a wider variety of perspectives. And this week, well, we are a little under a month away from the US presidential election. That's all. And uh no wonder the markets are a little confused right now because we really don't know about that. We don't know how central banks will move as well. Uh they've all All just about changed their position over the last six months or so. And we don't know what role China will play in the global economy next year as well. And then yes, which policies will emerge in the United States with two candidates polar opposites in terms of economic policy, it seems.
Phil Dobbie 1:06
So let's took look into all of this. Let's look at Phil Suttle's crystal ball. Phil is an independent economist. He uh puts out a weekly and monthly analysis by email to Subscribers. He was educated at Oxford. He's worked at JP Morgan, the Fed, the World Bank, the Bank of England, Barclays Capital, the IIF, Tudor Investments. But since 2017, he's been running his own analyst firm, sending out these daily notes. So for not quite as long as the morning call's been going on, but almost. So look if you like what you hear today, subscribe. There we are. We've got the the play. for you right at the front here, Phil. Okay. So I don't need to do it do it again. So let's um let let's start by looking at the US economy and the election uh because you understand the pr the US pretty well.
Phil Dobbie 1:54
Uh so let's look at that first. So when it comes to the economic impact of the next US president, is it the lesser of two evils or is Donald Trump you know, with his hefty tariffs and isolationism, is that by far the worst scenario?
Phil Suttle 2:08
Well, I I I think there's a pretty stark choice in terms of the economic policies that each candidate is proposing. And of course with Trump you'd say the big uncertainty is not about what he's proposing, it's about whether he would implement, you know, what he says he would do. I mean he's he's good on saying things and not necessarily so clear on following through with them. But I I think you should take the guy at face value when it comes to his economic proposals. And they're really they can be summarized very simply as two things. I mean but the the general title would be isolationism. But he's got two big proposals. One is to protect domestic manufacturing industry, but you know, the domestic economy more generally, with a high tariff wall, uh specifically aimed at China, but frankly aimed at everyone else.
Phil Suttle 3:03
So, you know, his proposal specifically is a sixty percent tariff on China and a ten percent tariff on other countries. That's a much bigger tariff shock than anything we've seen in history, including the famous Sloop Hawley tariffs in the early thirties that were part of the the Great Depression. But the other thing he said he'll do, which is maybe a little bit more iffy, uh, is he said he'll deport a huge number of illegal immigrants. You say, Well that's you know, that's fair, that's the way the r laws should work and all that. The problem is the US thrives on illegal immigration. So it's gonna say we're gonna
Phil Dobbie 3:41
bring we're gonna bring all this domestic manufacturing, going all this domestic manufacturing, but hey, by the way, we're gonna get rid of all of the people who are gonna do that work.
Phil Suttle 3:48
Yes, and in fact it's it's even more extreme in some fashion than that, because most of these people he's thinking of deporting uh are actually integral to the service economy, uh as well as the manufacturing economy, but particularly the service economy.

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