If the second Trump Administration is as incompetent and corrupt as the first, Australia will win handsomely again, as Alan Austin reports.
GLOBAL TRADE, when managed skillfully, benefits both buyers and sellers. But sometimes there are winners and losers.
When Donald Trump imposed tariffs on imports from China in 2018, China retaliated, costing thousands of American farmers their incomes, farms and lives. Agricultural exports to China collapsed from $20.9 billion in 2017 to 10.3 billion in 2018 as a result of Trump’s monumental folly.
That caused upheavals across America, not just the farm belt. All American taxpayers will pay substantially more in taxes for the rest of their lives to meet the interest on the $109 billion Trump borrowed to compensate the farmers who didn’t kill themselves in humiliation and despair.
Winners from the Trump debacle
Yet those Trump tariffs were a bonanza for Brazil’s soybean producers, Argentina’s maize growers, India’s dairy farmers and Australian wheat and sorghum growers.
Agricultural exports from Australia rose from $4,153 million in 2017-18 to $4,726 million in 2018-19. That’s a 13.8% lift, partly due to replacing American exports.
The value of all exports to China increased from $105.6 billion in 2017-18 to $134.2 billion in 2018-19. That’s a thumping 27.0%. Exports to China then jumped another 12.1% in 2019-20 to $150.4 billion.
Several countries stand to benefit greatly over the next four years, as they did last time Trump was President.
Trump’s actual record
America’s failing economy through the Trump years was masked by Trump himself continually bragging that it was the greatest in the history of the world. Some newsrooms accepted this unquestioningly and amplified it willingly; others resisted for a while, then just gave up. All are craven connivers.
There is a valid argument that the greatest deception Trump has ever achieved is not that the 2020 Election was stolen from him, nor that he was a successful businessman or a champion golfer, but that his economy pre-COVID was outstanding. It wasn’t. It was average before COVID and disastrous after.
Most variables showed continuing improvement through Trump’s first three years, as President Obama’s settings remained unchanged. See chart below.
The first column shows the economy Trump inherited. The second two show Trump’s results, before and after COVID. The shaded areas are negative outcomes. The right-hand column shows outcomes today, all of which are improving.
Employment good but not the best
The 3.6% jobless rate in January 2020 was low by American standards, but nowhere near the world’s lowest. Unemployment back then was under 3.5% in Denmark, Germany, the Netherlands, Hungary and Iceland, less than 3.0% in Mexico and the Czech Republic and below 2.5% in Switzerland and Japan.
America’s jobless rate would have been lower than 3.6% had exports not collapsed. Farm workers employed in agricultural exports declined from 541,000 in 2018 to 495,000 in 2019 and 440,000 in 2020.
Collapse in fiscal outcomes
There was no excuse for the deep deficits and the debt blowing out to $22.7 trillion in 2019, before COVID, and to $27.8 trillion by the end of Trump’s term.
While he increased the debt by 1.8% of gross domestic product from 2016 to 2019, all well-managed economies reduced their debt substantially. Ireland reduced its debt by 17.3%, Portugal by 14.9%, the Netherlands by 13.3%, Austria by 12.2% and Germany by 9.6%.
Inflation to surge again?
Inflation remained low through most of the Trump period. This is because Trump’s foolish inflationary decisions took more than a year to manifest their destructive consequences.
Causes of the scourge of inflation from 2021 to 2023 include the war in Ukraine, wasteful government spending, regulations slashed, unilateral tariffs and Trump’s trade wars. They all predate Joe Biden.
Trump’s National Security director for European Affairs, Alexander Vindman, believes Trump empowered Russia’s dictator Vladimir Putin over several years, eventually assuring him that the USA would not impede the Ukraine invasion — which exacerbated global inflation. The specialist in Russian affairs testified before the House of Representatives in early 2022 that the 6 January 2021 insurrection was the signal to Putin to order his generals to prepare to invade.
Economists are warning Trump will cause more inflation, notably via further tariffs, deeper deficits, deportations of migrant workers and his manipulation of the Federal Reserve’s interest rate policies.
Sixteen Nobel Prize-winning economists wrote an open letter in June outlining the inflation risk Trump presents.
Most Americans in blissful ignorance
Why Trump won a second term after the disasters of his first will be debated for years to come. One certain factor is the mainstream newsrooms’ abysmal failure to report America’s economy accurately.
All media, including the seemingly anti-Trump companies, profit greatly from the chaos, dysfunction, anger and violence — which sell copy and advertising.
Rupert Murdoch’s cable TV outlet Fox News saw its gross revenue increase every year through the Trump Administration but decline in 2023-24 when Joe Biden was managing the nation calmly and Donald Trump was far less visible.
Signs of economic trouble already
Since Trump’s ascendancy became clear last Wednesday, several U.S. companies have announced contractionary measures.
Semiconductor producer Wolfspeed in North Carolina released plans on Wednesday to cut 10% of its workforce. The Stellantis Jeep factory in Ohio announced on Thursday contractions in its Toledo plant which produces the Jeep Gladiator utility.
Other U.S.-based corporations to announce layoffs since the Election include Booking.com and I.T. company Freshworks.
Deep trouble seems almost inevitable for America’s economy. We will follow with interest which nations capitalise on the opportunities this presents.
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