America has demanded change. Donald Trump is US
It is a victory that will have far-reaching implications for the
global world order and economy. Quite what they shall be is
With Republicans controlling the House of Representatives and a
Senate Majority, it is clear there is an opportunity for a
significant change to policy settings. President Obama's legacy
on health reform, free trade agreements and immigration legislation
are all in President Elect Trump's sights, as indicated in his
First 100 Days Plan.
How do we make intelligent choices and decisions now when US
policy is unclear? Inauguration Day is 20 January 2017. It is
useful to look at the key policy approach identified in the
GLOBAL TRADE AND INVESTMENT
With global trade already sluggish and diminishing, a more
inward-looking US runs the risk of further restricting global
growth. The US is one of Australia's largest trading partners
and there will be a strong regional effort to keep the US engaged
in Asia-Pacific. This is an important opportunity for Australia. We
have the relationships and influence to acquit ourselves well in
President Elect Trump has promised the biggest 'tax
revolution' since the Reagan era, pledging to cut taxes across
the board and reducing the regulatory load on business and reducing
the number of US companies moving overseas.
US markets are now signaling their belief that an incoming Trump
administration will enact the business friendly policies announced
during the campaign and be more cautious on any policies business
may see as negative. The full volatility impact of this
'seismic shift' is yet to settle.
During his campaign, President Elect Trump expressed his desire
to reduce the amount of federal bureaucracy – suggesting two
regulations should be eliminated for every new one that's
adopted. One piece of legislation that may well be repealed is the
Dodd-Frank Act – labelled by the next President as a
'disaster'. The law, introduced to limit risk following the
2008 financial crisis, has in President Elect Trump's eyes
simply increased costs for business - stunting economic growth.
An infrastructure plan worth $1 trillion has been floated to
improve transportation systems. This in turn, it is claimed, will
support investments in clean water, power and telecommunications.
The reach of these projects will be extended through public-private
partnerships. There will be a focus on using American steel. There
may be political challenges in financing this plan.
If a Trump Administration does impose tariffs on Chinese imports
of the size and scale indicated there will be increased pressure on
Chinese outputs. The latest data suggests, however, that
China's trade dependence on the US has declined over the last
decade. In an optimistic assessment, perhaps this will provide
China with the impetus to look more closely at Australia as an
The Trans-Pacific Partnership involving countries around the
Pacific is seemingly on hold for four years, if not dead in the
water. Though this would probably have been the case regardless of
who was actually elected last night - Hillary Clinton had made her
feelings on TPP very clear. We will need to focus more closely on
the Regional Comprehensive Economic Partnership (RCEP), of which
China is a driving force. But does it truly have the
transformational economic potential of TPP?
ENERGY AND ENVIRONMENT
The President-Elect rejects the evidence around human caused
climate change: 'I believe it goes up and down.' However,
the Trump Administration must stick to the terms of the Paris
Agreement or explore how to renounce US adherence. During his first
100 Days, President Elect Trump has pledged to lift restrictions on
the production of '$50 trillion' worth of job-producing
energy reserves. These include shale, oil, natural gas and coal. He
also plans to cancel payments to UN Climate Change programs.
TECHNOLOGY AND TELECOMMUNICATIONS
The Federal Communications Commission's Open Internet order
is likely to come under consideration. Net neutrality rules –
billed as a victory for an open, fair and free internet –
could be eased.
This is the first in a series of notes on the US and the new
environment we now must face. Our Partners will examine the
challenges that lie ahead for our clients across a range of diverse
considerations, enabling you and your business to position for the
change that lies ahead. It promises to be an intriguing few
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Following the announcement by the International Atomic Energy Association that Iran has met its commitments under the Joint Comprehensive Plan of Action nuclear deal, Australia has suspended all nuclear-related sanctions against Iran.
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