The ‘Trump effect’
President-elect Trump will recite his oath of office on 20 January 2025. The Trump administration will hold the presidency, Senate, and the House.
For Australia, the question is the likely impact of some of President-elect Trump’s stated policy objectives including the imposition of tariffs. On social media, Trump has said:
· “…as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States and its ridiculous Open Borders.”
· “…we will be charging China an additional 10% Tariff, above any additional Tariffs, on all of their many products coming into the United States of America.” This is in response to claims that China is responsible for massive amounts of drugs, in particular, Fentanyl being sent into the US.
The issue for Australia is the secondary impact of a trade war. China is Australia’s largest two-way trading partner, accounting for 26% of our goods and services trade with the world in 2023. A slowdown in the Chinese economy impacts Australia and the region generally.
An immediate impact of the idea of a trade war has been the decline of the AUD/USD, currently sitting at around 64c.
Fuel efficient cars
New standards for vehicle manufacturers come into effect from 1 January 2025. Vehicle manufacturers will have a set average CO2 target for all new cars they produce, which they must meet or beat. The target will be reduced over time and car companies must provide more choices of fuel-efficient, low or zero emissions vehicles.
Suppliers can still sell any type of vehicle they choose but with more fuel-efficient models offsetting any less efficient models. If suppliers meet or beat their target, they’ll receive credits. If they don’t, they will have two years to either trade credits with a different supplier, or generate credits themselves, before a penalty becomes payable.
Wage theft criminalised
As of 1 January 2025, the intentional underpayment of workers will be criminalised.
Employers will commit an offence if:
· they’re required to pay an amount to an employee (such as wages), or on behalf of or for the benefit of an employee (such as superannuation) under the Fair Work Act, or an industrial instrument; and
· they intentionally engage in conduct that results in their failure to pay those amounts to or for the employee on or before the day they’re due to be paid.
Employers convicted of wage theft face fines of up to 3 times the amount of the underpayment and $7.825 million.
