China-US tariffs drop: 'From apocalyptic to merely bad'
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News.com.au
13 minutes ago
- News.com.au
Donald Trump's tariffs have a large role to play in Australia's interest rates cycle
When the RBA handed down its most interest rate decision last month, it shocked economists and the public by holding the cash rate at 3.85 per cent. The widely held consensus had been strongly in favour of another 0.25 per cent cut to follow the previous one in May. In the weeks since the Reserve Bank's decision, economic data has been mixed, with some elements such as the recent retail sales report providing support for the RBA's message of caution, while on the other hand, the recent substantial rise in unemployment was far more supportive of the cash rate being cut. In several important ways the RBA's uncertainty about the path forward for interest rates is arguably justified. Trump, Trade And Global Uncertainty At a global scale, the implementation of the Trump Administration's various tariffs and threats of even greater trade barriers to nation's not willing to make a swift agreement with the United States remains a source of major questions for central banks around the world. The challenge posed by tariffs to the path of interest rates was recently summed up by JPMorgan Chase (the world's most valuable bank) CEO Jamie Dimon at an event hosted by the Irish government. 'The market is pricing a 20% chance (of rising interest rates). I would price in a 40-50% chance I would put that as a cause for concern,' Dimon said. Dimon went on to cite the Trump administration's tariffs, the restructuring of global trade and the growing U.S government budget deficit as inflationary forces impacting the path forward for interest rates. While U.S interest rates can and do rise and fall independently of those of other nations, they are also the most important global benchmark. Theoretically, the U.S Federal Reserve holding a higher interest rate than the RBA can have two major knock on effects for Australia. It can force a repricing of Australian interest rates to better reflect the global benchmark. Or if the RBA chooses to allow the distance between the RBA cash rate and the U.S federal funds rate to expand, it places downward pressure on the value of the Australian dollar in a vacuum. A Mixed Bag For Australia At a domestic level, there is also a high degree of uncertainty impacting the path forward for interest rates. With government currently the driving force behind broader economic growth and employment growth in generally taxpayer funded sectors of the economy (public administration, education and, healthcare and social assistance) the main driver of the resilience of the labour market, it's challenging for the RBA to know exactly when a rate cut would be appropriate. Meanwhile, the deeply mixed nature of retail sales growth depending on the lens with which it is viewed also complicates matters. For example, looking at the latest headline retail sales showing a 1.2 per cent rise in turnover or June in a vacuum, it would be hard to justify a rate cut. But when the focus is shifted to an inflation adjusted figure that looks at retail sales per working age adult, the data for the June quarter reveals a return to recession in per capita terms. This is due to expansion of the population, the vast majority of which is occurring via migration acting as more or less the only driver of the retail economy in aggregate. History And Market Pricing Based on RBA rate cut cycles seen in the last 35 years, where the cash rate has been cut by at least one percentage point, the average rate cut cycle sees mortgage rates fall by approximately 33.3 per cent. If we remove the rate cut cycles driven by major emergencies such as the Global Financial Crisis and the early 1990s recession, the average reduction in mortgage rates falls to 27.0 per cent. If we were to see a similar reduction in interest rates today, we would see a total fall in the cash rate of approximately 1.75 percentage points. This would leave the average payable rate on a variable mortgage for an owner occupier at 4.58 per cent. In terms of the pricing of the future path of interest rates from financial markets, the next full 0.25 per cent rate cut is priced in for the RBA's August meeting, with the next expected to follow in November. Overall, market pricing has interest rates falling by a total 1.33 percentage points, with the cash rate hitting a low of 3.02 per cent during the middle of next year. The Outlook For Rates While the direction of interest rates is ultimately in the hands of the Reserve Bank, under the current circumstances government is also playing a significantly greater role in influencing the path forward than has been historically normal. With the growth in the domestic consumer economy concentrated in the 65 and over age demographic and otherwise reliant on population growth, the level of migration set by the Albanese government will be vital in determining to what degree aggregate consumer demand is weak enough to warrant further cuts in interest rates. Meanwhile, the level of employment growth stemming from government policy will also be a key consideration. If the current pullback continues without a corresponding increase from the private sector, the urgency and magnitude with which the RBA approaches the ongoing rate cut cycle may intensify significantly. Ultimately, it's entirely possible that events beyond our shores end up playing a significant role in the direction of Australian interest rates, whether that be as a result of President Trump's tariffs or the Chinese economy slowing more swiftly than expected due to the ongoing trade conflict and still simmering domestic economic issues.
SBS Australia
3 hours ago
- SBS Australia
Dozens of countries hit in Trump tariff blitz
Listen to Australian and world news, and follow trending topics with SBS News Podcasts . The U-S President has announced steep tariffs for 92 nations, including Canada at 35 per cent, and India at 25 per cent. President Donald Trump says the hikes target nations that failed to engage with U-S economic and security interests. But Australian goods will stay at the 10 per cent baseline. Trade Minister Don Farrell says Australian goods are now more competitive in the U-S market, after Donald Trump's latest tariffs announcement. Australia has been spared from an increase in tariffs and the rate remains at the lowest level of 10 per cent. Mr Farrell says that outcome is good for Australia. "What this decision means in conjunction with all the other changes to other countries is that Australian products are now more competitive into the American market. This means products like wine, like beef, like lamb, like wheat, are cheaper into the United States." New Zealand faces a 15 per cent rate, and Canada up to 35 per cent on items outside the US-Mexico-Canada agreement. The White House cited non-tariff barriers and fentanyl trafficking, though Canada accounts for just one per cent of US fentanyl imports. Ottawa says it's boosting border security and fighting transnational crime. Canberra's recent easing of restrictions on American beef is denied as being linked to the decision. Switzerland faces the highest tariff increase, up to 39 per cent. Jean-Philippe Kohl from Swissmem says tens of thousands of tech jobs are now at risk. 'It is really, it was a shock for us, and it is a shock for our export industry and the whole country. We are really stunned. And the tariffs are not based on any rational basis and are arbitrary, and it is impossible to explain what it means and why this decision is made so. So, there is no rationality.' Swiss pharmaceutical giants Roche and Novartis were spared, but broader economic impacts are expected to be severe. The Swiss government is reviewing its response. Meanwhile, Bangladesh has won a key concession, with U-S tariffs on its garment exports cut to 20 per cent, down from a proposed 37 per cent. The decision is a relief for the country's $60 billion [[US$40 billion]] apparel industry, the world's second largest. Factory owner and former trade official Mohiuddin Rubel says the move helps level the playing field. 'Initially when it (Trump's tariff) was imposed, few of our competitors were having lesser tariff than us. So, we were in little bit of a shaky position to fight with them and how to cope up with them in the competition. So, when now it has been revised, all of our competitors almost are in equal stage.' Meanwhile in Taiwan, a 20 per cent tariff has left industries such as machinery and plastics on edge, as companies weigh whether to shift operations. One executive, Mr Wang, warns the impact could ripple across multiple sectors. 'It all depends on the final tariff rate. If it remains 20 percent, it will be a big blow for machine tools manufacturing, machinery and textile industries. And the impact may affect other industries on different levels. As a result, it all depends on the final tariffs rate, what markets Taiwan needs to open for the U.S., what we need to invest in U.S. We won't know the impact until then.' In Malaysia, most pharmaceutical and semiconductor products will be exempt despite a new 19 per cent tariff on other exports. Trade Minister Tengku Zafrul Aziz says the decision followed high-level talks. "In the end, at 5am we finished the discussion in the morning and Prime Minister Anwar Ibrahim briefed us that President Trump has agreed with the tariffs for Malaysia, which is 19 per cent, announced along with other countries. This will be followed by a joint statement by the Malaysia and US side, including the Malaysia Ministry of International Trade and Industry (MITI) and the US Trade Representatives (USTR) either on Saturday or Sunday." South Africa is also bracing for the fallout. Dynamic Fluid Control, a major valve manufacturer, fears the 30 per cent levy on steel could force it out of the U-S market. C-E-O Tumi Tsehlo was blunt. "You know the longer the tariffs stay in place, the longer the situation will continue to disable us." South Africans voiced concern over the potential impact of a 30 per cent tariff imposed by President Trump, warning of job losses and economic uncertainty as the measure takes effect. Kalomo Musokotwane is a marketing and events manager. "Thirty per cent is drastic. So a lot of people are going to lose jobs. And already the government is struggling to create more jobs as it is, and I don't see them creating any more jobs again. So it's going to probably be up to the entrepreneurs. Entrepreneurs are going to have to somehow find a way to bring back the economy. But then at the end of the day, a lot of people are going to lose.' Serbia has been hit with a proposed 35 per cent tariff. Bojan Stanic from the Serbian Chamber of Commerce described the move as excessive. "Serbia is among the most affected countries in the world with tariffs, if they really happen - we will have to wait for the official announcement of the officials in Serbia as well. The tariffs are even higher than those applied for Chinese goods coming to America. On the other hand, in Europe only Switzerland is higher with 39%. We can freely say that this is indeed an irrational decision, bearing in mind that in the last ten years, the economic exchange between America and Serbia has significantly increased." In France, perfume maker Corania is reeling from a 15 per cent tariff on its U-S exports. CEO Laurent Cohen says the sudden change has forced the 90-year-old company to rethink its business strategy. 'So this is new, it's forced on us, it's sudden. And so, we, who have been working in this market for many years, we had to turn around, we had to reinvent ourselves. We already had to be cautious because since January, we have no idea what's coming next.'
Daily Telegraph
3 hours ago
- Daily Telegraph
‘Pure evil': Epstein survivors and their families horrified as co-conspirator Ghislaine Maxwell suddenly framed as a ‘victim'
Don't miss out on the headlines from World. Followed categories will be added to My News. Multiple victims of Jeffrey Epstein and Ghislaine Maxwell have expressed their disgust at suggestions she could receive 'preferential treatment' from the government, or perhaps even a presidential pardon. They are increasingly, palpably worried that Maxwell's monstrous crimes, particularly those committed against underage girls, are being forgotten. Maxwell, who has never admitted to her role in Epstein's sex trafficking scheme, was the person chiefly responsible for procuring minors for him to abuse. She enticed them into his orbit, groomed them, and used various methods to keep them trapped. The victims have long alleged that Maxwell also participated in the sexual abuse. Get all the latest news happening around the world as it happens — download the app direct to your phone. Epstein and Maxwell in 2005. Picture: Joe Schildhorn/Patrick McMullan via Getty Images Last month, as the Trump administration struggled to neutralise a public backlash against its handling of the Epstein files, the man Donald Trump had appointed Deputy Attorney-General – his own former defence lawyer, Todd Blanche – went to visit Maxwell. Mr Blanche spoke to Epstein's partner and chief co-conspirator for two days. Lawyers representing Maxwell, who are currently trying to get the Supreme Court to throw out her convictions on child sex trafficking charges, later said she had discussed about a hundred people connected to the Epstein case. Obvious fears arose among Maxwell's victims. Did the government intend to seek a shortening of her 20-year prison sentence in exchange for her co-operation? Was President Trump open to pardoning her, which would set her free immediately? And how would the obvious conflicts of interest be navigated? Mr Trump, who was friends with Epstein and Maxwell for about 15 years and whose name reportedly appears 'multiple times' in the Epstein files, wants to be absolved of any suggestion he was involved in their crimes (and, we should note, there is at the moment no evidence he was). Maxwell, obviously, wants to get out of jail, something she almost certainly cannot achieve without Mr Trump's grace. Every incentive compels her to be, ahem, helpful to the President. And this is someone with a long record of lying, including while under oath. Perhaps nothing is amiss, but the ingredients for a potentially corrupt quid pro quo are there. You can understand why Epstein's survivors are suspicious. Mr Trump, his now-wife Melania (then named Knauss), Epstein and Maxwell in 2000. It should be stressed that the Trumps are far from the only famous people to have been pictured with them. Picture:Two other elements have fed into their building unease. First, on the fringes of America's right-wing media, some bloviaters have started to speak of Maxwell as a 'victim'. 'I think this is great,' Newsmax anchor Greg Kelly said last week, for example, referring to the government's overtures towards her. 'I do have a feeling that she just might be a victim. She just might be. There was a rush to judgment, there was a lot of chaos there for a while. 'Granted, she hung out with Jeffrey Epstein, and I know that's apparently not good.' Apparently! (Oh, and Maxwell did much more than merely 'hang out' with Epstein, as we shall explore in a moment. Apparently some folks need to be reminded.) Second, today we learned that the government had quietly moved Maxwell from her jail in Florida to a lower security one in Texas, which houses several female celebrity inmates. The fraudster Elizabeth Holmes is there, for example. Why move Maxwell? That has not been explained. Hence an angry statement released today, co-signed by Annie and Maria Farmer, both of whom were victims of Epstein and Maxwell, plus the family of Virginia Giuffre, who did so much to expose the pair's crimes before taking her own life earlier this year. Virginia Roberts Giuffre outside court in 2019. Picture: Barry Williams/Tribune News Service via Getty Images 'It is with horror and outrage that we object to the preferential treatment convicted sex trafficker Ghislaine Maxwell has received,' the statement reads. 'Ghislaine Maxwell is a sexual predator who physically assaulted minor children on multiple occasions, and she should never be shown any leniency. 'Yet, without any notification to the Maxwell victims, the government overnight has moved Maxwell to a minimum security prison. This is the justice system failing victims right before our eyes. 'The American public should be enraged by the preferential treatment being given to a pedophile and a criminally charged child sex offender. 'The Trump administration should not credit a word Maxwell says, as the government itself sought charges against her for being a serial liar. 'This move smacks of a cover-up. The victims deserve better.' Annie and Maria Farmer in 2019. Epstein and Maxwell. Picture: US District Court/AFP Some other remarks worth mentioning, here. 'My little sister is one of her victims, and so am I,' Maria Farmer told MSNBC, slamming politicians who 'want to entertain Ghislaine Maxwell' and 'act like we victims should not be heard from'. Her sister Annie told The Daily Mail any deal between the government and Maxwell would 'be devastating' and 'feel like a slap in the face'. 'It doesn't sit well that this is all happening without any involvement from the people they asked to testify in her case, or other victims,' she said. 'It's hard not to be anxious.' Theresa Helm said any leniency shown towards Maxwell 'would mean the complete crumbling of this justice system'. 'We all deserve a pathway to justice. We don't deserve to have it, yet again, robbed from us,' she told MSNBC. 'It truly does seem like an upside down world.' During an interview about Maxwell's case in 2021, which feels relevant in this discussion, Sarah Ransome described Maxwell as 'the chief orchestrator' who had 'forced' her into the room where Epstein raped her. 'It actually makes me sick that she is claiming to be a victim, or have any form of innocence' said Ms Ransome. 'This is the same woman that grabbed my arm and forced me into a room to be raped by Jeffrey. It was brutal. 'And I remember limping from Jeffrey's bedroom. I remember looking at Ghislaine, and she had this evil smirk on her face. She knew I was there to be raped, and she enjoyed it.' Sarah Ransome outside court in 2021. Picture: Bryan R. Smith/AFP Speaking to CNN this week Ms Giuffre's brother, Sky Roberts, said Maxwell 'deserves to rot in prison, where she belongs'. 'Because of what she's done to my sister, and so many other women. It's absolutely a pure sense of evil,' Mr Roberts said. 'She wasn't stolen. She was preyed upon,' he added, alluding to Mr Trump's complaint this week that Epstein 'stole' staff from his Mar-a-Lago resort, including Ms Giuffre. '(Maxwell) wasn't just a recruiter. She participated, and viciously participated, with these girls, abusing them.' He said his sister described Maxwell as a 'monster' from 'a nightmare'. Maxwell. And Epstein. Journalist Tara Palmeri, who has reported extensively on the Epstein case and knows multiple victims, described recent events as 'infuriating'. 'Because I know so much about her. I know the damage she did to these girls,' Ms Palmeri said on her YouTube channel. 'So many of them are more angry with her, for the abuse, than Epstein. She was the one that violated them. She was the one that called Annie Farmer's mother and said, 'Don't worry, I'll take care of her, you can let her go to the ranch.' That was where Ghislaine Maxwell was the first one to touch Annie, and then Epstein jumped in. 'She was involved in the actual molestation of these girls. She didn't just bring them to Jeffrey Epstein.' All these comments are worth remembering, going forward. Ghislaine Maxwell was not Epstein's sidekick, she was his partner, and is no less culpable. She wasn't pulled into the web of his sex trafficking scheme – if anything, she was chiefly responsible for weaving it. She should not be pitied. Or trusted. Twitter: @SamClench Originally published as 'Pure evil': Epstein survivors and their families horrified as co-conspirator Ghislaine Maxwell suddenly framed as a 'victim'
