Weekend Edition: Australia’s happy place in the geopolitical landscape
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How is Trump’s trade policy creating uncertainty for global investors?
Well, there is no doubt that the US President has created a more risky trade environment, and that's covered in a new report from T Corp, basically describing the lay of the land right now. But whilst Donald Trump creates havoc, could Australia be one to benefit from all this change? Do we have a happier place than most in this new geopolitical landscape? That's this week. The morning call from NEB with Phil Dobby.
The weekend edition.
And of course, on the uh weekend edition, the views that you hear do not necessarily reflect those of NAB. We get commentators on to give their views as well for a fresh perspective. So there's no doubt the current US administration has made the immediate future a little more uncertain for investors. Liberation Day this week was further evidence of that. But what else is driving and influencing investments? Well, T Corp, the New South Wales Treasury Corporation, put out a report this week. week on the evolving financial landscape. It's the first of four reports. So future ones are going to look at the energy transition, technology and AI, and the aging population and immigration. But this first one focuses rather aptly this week on geopolitics and a multipolar world.
It's put together by T Corp's chief economist Brian Redakin and senior economist Emily Perry. Brian is with us now. Welcome Brian. So we One of the things you talk about uh at the beginning of this report is friendshoring. We're not offshoring anymore, we are offshoring but only to friendly nations. So I'm not sure for Australia what those nations are. I mean it's a this week we had Japan, China and South Korea. They're clearly friendshoring because they met last weekend on, you know, forming an an alliance to counter the America First approach. I mean if we're not seen as a friendship. Where does Australia friend shore to?
And so there have been uh quite close links between uh countries in the Asian region, including Japan and Korea there. So it's probably more that they those kind of um links have already been quite well established. Um the amount of investment in the Australian economy from particularly Japanese countries is is very, very high. Um and so I think it's more of a continuation of those things rather than establishing a beach heads, which I think it was more of the the focus of of the meetings that those Asian economies had this week. But more generally, I think it's countries that have a similar world view. And um so it could be New Zealand, it could be Canada, um, but those countries that still believe in
Uh free trade. Uh I think, you know, increasingly they'll be looking to each other to provide that that support. So
the US is not one of those friends though, in that case, uh 'cause they are not a believer in free trade. Is that what you're saying?
So I think the uh the real genesis of of the whole concept of friendshoring or uh reshoring production was really driven by security concerns, the fact that supply chains had become very long and countries had no control over all the parts of that supply chain. And then you get something like the pandemic, which really disrupted those supply chains and really countries found that um, you know, for key essential goods and products, uh, they had really no control over it. So That was obvious a health concern, uh, but e again, what we're seeing is a much more um sort of outward push from from China in particular. And you know, some of the comments from US politicians have have really been quite stark, including the new Secretary of State, Marco
Rubio. So okay, does that mean that we invest less in the US because it's less of a safe choice now that we that investors should be looking Australian investors should be looking Closer to home, uh or those those friendly nations. Interestingly you didn't mention Europe there, but I mean is Europe an opportunity? Because it is obviously going to try and develop its own initiatives as well. It's going to re reduce its reliance on the United States. We know that they're going to spend heavily on uh on their military for for example.
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Chapters
7 chapters
1
How is Trump’s trade policy creating uncertainty for global investors?
0:01–5:59
2
What is “friendshoring” and which countries could become Australia’s new trade partners?
5:59–12:49
3
Why does the guest say the United States is no longer a reliable free‑trade ally for Australia?
12:49–18:02
4
Could a US recession and higher interest rates hurt the Australian economy?
18:02–22:15
5
How might the US‑Australia trade deficit affect Australian GDP growth?
22:15–23:15
6
Will the Australian dollar stay weak or start to recover as the US dollar falls?
23:15–23:42
7
Is on‑shoring likely to increase in Australia and where will new investment flow?
23:42–23:43