Economy

Updates on the state of the economy, growth, inflation, and employment.

Economy
$1bn loans in Labor measures for alt export markets
As part of its play to win the upcoming federal election, the Albanese government has pledged protective measures to help export-focused companies tap alternative markets beyond the United States. Included within these measures Labor is planning to offer $1 billion in zero interest loans through the National Reconstruction Fund. This new loan facility builds on the loans, equity and guarantees already available through the $15 billion fund. This new round of funding is expected to complement a separate government initiative to fund representative bodies of sectors directly in the wake of U.S. President Donald Trump’s tariff measures announced in his “liberation day” speech yesterday. In response to what Trump believes to be tantamount to ‘surrogate tariff measures’ from other countries, the U.S. has imposed a 10% tariff on Australia. Trump has justified this 10% tariff by arguing that Australia imposes the same impost on U.S. goods through various trade barriers. Instead of fighting tariffs with counter tariffs, the Albanese government will lobby the U.S. to remove them.Additional measuresMeanwhile, the Government has announced four additional measures designed to find new markets and offer some protection to aff
Economy
Australian trade doomsayers prescribed a chill pill
Just as it appears the world is imploding from the shockwave of President Donald Trump's tariff-led plan to make the United States economically great again, economists have provided some reassuring words for Australia. The trade imposts are expected to have little direct effect on Australia and will lower inflation and increase the likelihood of interest rate cuts in this country, they say. Goldman Sachs said although the headline 10% import duty increase for Australia and New Zealand was toward the upper end of its expectations, the direct impact was likely to be negligible. The investment bank said the indirect effects were likely to be larger due to low growth among major trading partners, who were hit with larger tariffs than expected. It forecasts 2025 gross domestic product (GDP) growth of 1.7% for Australia and 0.9% for New Zealand. Estimates have been lower by 10 basis points (bp) since the tariffs were announced and which in turn were cut by 20bp and 15bp respectively previously. Goldman Sachs did not expect any direct impact on inflation in Australia and New Zealand given both governments indicated they would not apply retaliatory tariffs on U.S. imports. “That said, in terms of indirect effects, we exp
Economy
EU in negotiations with US as it tables tariff response
French President Emmanuel Macron led a heated yet considered European Union reaction to United States-imposed tariffs, calling the 20% levy on the continent "brutal and unfounded". Macron ruminated that any French or European response to the tariffs would be more significant than previous retaliatory tariffs or countermeasures. He also called for a halt to investment in the U.S. "The US economy will become poorer and weaker," Macron said. Meanwhile, European Commission chief Ursula von der Leyen said President Donald Trump's announcement of universal tariffs on the whole world, including the EU, is a major blow to the world economy. “Let's be clear-eyed about the immense consequences… the global economy will massively suffer [and] uncertainty will spiral and trigger the rise of further protectionism,” von der Leyen said in a statement. “The consequences will be dire for millions of people around the globe.” Von der Leyen said on top of that, a new wave of EU reciprocal tariff measures were currently being put together in case current negotiations with the White House fell apart. “We're now preparing for further countermeasures to protect our interests and our businesses if negotiations fail." The EU is a
Economy
Trump never promised a rose garden: How market reacted
Given that the initial falls are typically the deepest, the Australian share market appears to have weathered today’s tariff announcements relatively well, with the ASX trading around 1% lower at noon after falling by around 2% at the open. Not unlike midnight on 31 December 1999 - at the height of the Y2K fear – investors woke up this morning to find that regardless of U.S. President Donald Trump’s tariffs, the sky hadn’t fallen and the world was still spinning. That’s not to say there were winners and losers in today’s announcements.Key winners todayGiven its safe-haven status, gold shone bright today, with the precious yellow metal's price topping US$3,146 per ounce this morning. Unsurprisingly, despite the materials sector having followed all other sectors down today (consumer staples up 0.84%) gold stocks also defied gravity today. Gold miners Northern Star Resources (ASX: NST), Newmont Corporation (ASX: NEW), Ramelius Resources (ASX: RMS), Spartan Resources (ASX: SPR), Westgold Resources (ASX: WGX) and De Grey Mining (ASX: DEG) were all 2% to 5% higher at midday. Consumer stables, the only sector that showed black ink today, were up around 1% at noon. This was with key players like Coles (ASX: COL), Synlait Mi
Economy
Reserve Bank spells doom and gloom as US tariffs hit
The Reserve Bank of Australia says heightened geopolitical tensions and policy uncertainty in major economies have the potential to interact with existing vulnerabilities, and has identified three key vulnerabilities that could be exposed. …yes, that’s a round-about way of saying the Trump administration’s tariff policies could spell doom and gloom for Australian households and businesses, according to the RBA’s April Financial Stability Review. So, what exactly are these existing vulnerabilities and how are tariff measures affecting them? The RBA says ongoing uncertainty about U.S. international trade policies, and the reactions that this may trigger, could chill business investment and household spending decisions, and pose substantial headwinds to global economic activity and inflation. Find out more: Reciprocal tariffs: Breaking down the percentages There’s also considerable uncertainty about the effects of possible fiscal, regulatory and other government policy changes on global growth and inflation. All these uncertainties add to existing cyber incidents and climate change risks.Three pressure pointsThree key vulnerabilities, the RBA says, stand out as having the potential to significantly affect financial

Economy
History-blind tariffs drive US towards recession: Oliver
The thing that has come upon us is that which we feared most: Based on the take of AMP chief economist Share Oliver, the impact of United States President Donald Trump’s tariffs could be - pardon the euphemism - of biblical proportions. Oliver is referring specifically to Trump’s tariffs announced overnight (Thursday AEDT), which based on his rough calculations, will take the U.S. average tariff rate to above levels seen in the 1930s after the Smoot/Hawley tariffs. Without putting too fine a point on it, the Smoot-Hawley Tariff warrants a brief history lesson. Most economists believe the Smoot-Hawley Act of 1930, which imposed rates as high as 41%, triggered a trade war that collapsed global trade, and helped transform the nascent recession into a decades-long global depression. However, Trump clearly doesn’t see it that way. In a recent speech, he blamed the Great Depression on the U.S. removing tariffs in 1913 and replacing them with an income tax. Like most of his economic peers, Oliver believes the current round of tariffs will by default heighten the risk of a U.S. recession – via a further blow to confidence and supply chain disruptions – and a big hit to global growth. “The risk of a US recession is probab
Economy
Trump's beef with Australia amid claims of protectionism
The sweeping “Liberation Day” strike by the United States against its global trading partners included a 10% tariff on Australian exports, with President Donald Trump singling out Australia's ban on fresh beef from North America during his announcement. "They're wonderful people and wonderful everything, but they ban American beef," Trump said. "Yet, we imported $3 billion of Australian beef from them just last year alone. They won't take any of our beef. They don't want it because they don't want it to affect their farmers.” It’s understood the U.S. has settled on a 10% reciprocal tariff for Australian exports due to non-tariff trade barriers, including biosecurity restrictions on some American food. Referring specifically to non-tariff trade barriers imposed by a range of countries, Trump noted: “They manipulated their currencies, subsidised their exports, stole our intellectual property, imposed exorbitant VAT [consumption taxes] taxes to disadvantage our products, adopted unfair rules and technical standards and created filthy pollution havens.”US beef banned in 2003Australia has a free trade agreement with the U.S., allowing products to enter each others' countries tariff-free. However, biosecurity restricti
Economy
Trump tariffs: US President slaps Australia with 10% tax
The Trump administration declared today "Liberation Day" as President Donald Trump rolls out a set of tariffs. Both America's allies and adversaries are likely to experience conflict as a result of the reciprocal tariffs.A brief overview of what you need to know The President of the United States, Donald Trump, unveiled broad new tariffs at the White House today. The president announced large-scale increased levies on goods imported into the United States during the Rose Garden event. This new tariff rollout is referred to by the White House as "Make America Wealthy Again". Donald Trump implemented a "baseline" 10% tariff on imports into the U.S., including Australia. There is a great deal of uncertainty regarding reciprocal tariff agreements - but experts are already warning of potential problems. China, Canada, and Mexico have previously been targeted as well as specific industries, including an auto import duty of 25%. Reciprocal tariffs: Pros v Cons for business and markets------------------------------------------------------------------------------Source: The White House via YouTubeFrom The White House:Tariffs Work — and President Trump’s First Term Proves It Fact Sheet: President Donald J. Trump Declares National Em
Economy
National dwelling approvals dip 0.3% in Feb: ABS
The total number of dwellings approved in Australia declined by 0.3% to 16,606 in February, following a 6.9% increase in January, according to seasonally adjusted data released by the Australian Bureau of Statistics (ABS). Meanwhile, residential building value rose 5.0% to a fresh record of A$9.65 billion. Brock Hermans, ABS head of construction statistics, noted: "Approvals were varied across the building types. Private dwellings excluding houses fell 1.5%, while private sector house approvals were up 1.0%." Most states saw an increase in total dwelling approvals in February, with Tasmania leading at 61.3%, followed by Victoria at 36.4%, Western Australia up 17.1%, Queensland gaining 13.0%, and South Australia adding 5.4%. New South Wales was the only state to record a decline, dropping 44.1%. Approvals for private sector dwellings excluding houses fell 1.5% after reaching a two-year high in January. However, the segment remains 73.1% higher than a year ago. New South Wales saw just 313 new apartment approvals in February, compared with 2,694 in January, which was the highest monthly figure since May 2023. Victoria, on the other hand, saw an increase in apartment approvals, with 2,294 new units approved in Fe