Latest news with #AndrewHauser
ABC News
22-05-2025
- Business
- ABC News
RBA deputy governor says China knew it had a 'strong hand' in trade war with US
Andrew Hauser, the Reserve Bank's deputy governor, says he was in China the week after US President Donald Trump shocked the world with his so-called "Liberation Day" tariffs in early April, and he witnessed something remarkable. He said after US tariffs on China rose to 145 per cent, he saw a "striking confidence" among local people that China was heading into a trade war with a "strong hand." He said there was a general expectation that a large share of the economic costs of US tariffs would fall on the US itself, and a determination "not to cushion that impact". He detected "little expectation" that China's currency would be devalued in the event of a trade war, partly because China wouldn't want to insulate the US from its own tariffs. And he saw optimism among Australian businesses active in China that the trade war could work in their favour by enhancing their competitive position in Chinese markets. "The eye-popping tariff tit-for-tat escalation in early April came as a genuine shock to most of those we spoke with," Mr Hauser said. "But for every expression of surprise, we also heard a striking confidence that China was going into this trade war with a strong hand." He made his comments in a speech to the Lowy Institute in Sydney on Thursday evening. Mr Hauser showed a graph in his speech to illustrate the stark reality of China's "strong hand" in its trading relationship with the United States. See the graph below. As it shows (lower right-hand corner), nearly half of China's exports to the United States are products for which the US has limited alternative suppliers. Those goods include lithium batteries, computers, smartphones and video game consoles. "Indeed, the massive advance in technology use [in China] is one of the most striking impressions to any outside visitor," Mr Hauser said. "The pass-through of US tariffs to US consumer prices for such goods is likely to be high — perhaps explaining why many were quickly exempted [from US tariffs]," he said. He said much of the rest of China's exports to the US (lower left-hand corner of the graph) are products for which the United States is not a dominant source of demand, so China's exporters could divert those goods to other markets (to some degree). That leaves the top half of the graph, where the US accounts for a large share of Chinese imports. There are far fewer products in those two boxes. Mr Hauser said during his time in China, he also heard doubts about how much manufacturing currently done in China would relocate to the US to avoid tariffs. "Elevated labour costs, and a finite stock of advanced manufacturing skills, were thought to make it impossible to produce many goods at the prices US consumers expected to pay — as would the absence of the highly integrated, co-located supply chains that had developed within China, as well as across Asia," he said. "And there were doubts about the viability of long-term investment in factories while the volatility of US policy settings remained so elevated." Mr Hauser said in the past few weeks, since he arrived home from China, the US and China have walked back from the trade-war precipice. But he said it was a fascinating to witness first-hand how China's government, business community, and people were so willing to face a US trade war head-on, he said. He also reminded the audience of how important Australia's trading relationship was with China. "Of all the trends shaping the Australian economy over the past half-century, one of the most profound has been the long swing towards Asia and, more specifically in recent years, China — now our biggest single trading partner by a country mile," he said. "But China is also front and centre in the US administration's rapidly evolving tariff strategy. How that strategy plays out, and how China responds, are therefore key issues for the economic outlook in Australia, and hence the RBA's monetary policy," he said.
Bloomberg
22-05-2025
- Business
- Bloomberg
RBA Ready to Respond If Needed to Trade Shock, Hauser Says
Australia's central bank is ready to respond with policy in the event of deepening global fallout from the Trump administration's tariff regime, Deputy Governor Andrew Hauser said, adding that there are few signs of any local impact at this stage. Hauser, speaking during a panel discussion at the Lowy Institute in Sydney on Thursday, said forward indicators of activity in Australia 'have not really moved at all' in response to the trade upheaval.
The Advertiser
22-05-2025
- Business
- The Advertiser
Australian firms 'upbeat' China can navigate trade war
Australia should not "count China out" despite a tariff war, a Reserve Bank boss says, with demand for iron ore tipped to remain high. Reflecting on a visit to China in April, RBA deputy governor Andrew Hauser says he encountered positivity from Australian companies despite Donald Trump having a week earlier announced he would impose tariffs of 145 per cent on the Asian giant. In Shanghai, he attended a discussion across retail, agriculture, banking, finance, law, health care, manufacturing and commercial property sectors. "What really struck me about that session was how upbeat most, if not all, of the firms were about the outlook for their businesses," Mr Hauser told the Lowy Institute in Sydney on Thursday night. "For anyone wanting to cut to the chase … I'll put it more bluntly: don't count China out." The central bank delegation heard similar sentiments in separate discussions with companies active in steel and iron ore. "They saw few threats to the scale and cost advantages of Australian ore, relative to other producers in the near term," he said. "Their central expectation was for Chinese steel output to remain relatively robust, remaining at or near one billion tonnes a year in the near term." China is by far Australia's biggest iron ore market and yields about $32 billion in export revenue every three months, according to the Department of Industry. There was also a sense among Australian companies that recent developments in trade policy could enhance their competitive position in Chinese markets, Mr Hauser said. The US tariffs on China were reduced to 30 per cent on May 12, but in forecasts released this week, RBA governor Michele Bullock noted the volatility meant there was an outside chance Australia could tip into a recession if the bank's worst fears came to fruition. The RBA this week cut the cash rate by a quarter point to 3.85 per cent, easing pressure on mortgage holders grappling with living costs and interest repayments. Three other themes emerged from Mr Hauser's visit, in which he joined an RBA team based at the Australian embassy in Beijing responsible for "taking the temperature" of the Chinese economy. People felt the economy was finally turning a corner in early 2025, the scale, speed and scope of Mr Trump's tariff announcements were a shock, and China felt it had a strong economic hand in responding to tariffs, he said. Australia should not "count China out" despite a tariff war, a Reserve Bank boss says, with demand for iron ore tipped to remain high. Reflecting on a visit to China in April, RBA deputy governor Andrew Hauser says he encountered positivity from Australian companies despite Donald Trump having a week earlier announced he would impose tariffs of 145 per cent on the Asian giant. In Shanghai, he attended a discussion across retail, agriculture, banking, finance, law, health care, manufacturing and commercial property sectors. "What really struck me about that session was how upbeat most, if not all, of the firms were about the outlook for their businesses," Mr Hauser told the Lowy Institute in Sydney on Thursday night. "For anyone wanting to cut to the chase … I'll put it more bluntly: don't count China out." The central bank delegation heard similar sentiments in separate discussions with companies active in steel and iron ore. "They saw few threats to the scale and cost advantages of Australian ore, relative to other producers in the near term," he said. "Their central expectation was for Chinese steel output to remain relatively robust, remaining at or near one billion tonnes a year in the near term." China is by far Australia's biggest iron ore market and yields about $32 billion in export revenue every three months, according to the Department of Industry. There was also a sense among Australian companies that recent developments in trade policy could enhance their competitive position in Chinese markets, Mr Hauser said. The US tariffs on China were reduced to 30 per cent on May 12, but in forecasts released this week, RBA governor Michele Bullock noted the volatility meant there was an outside chance Australia could tip into a recession if the bank's worst fears came to fruition. The RBA this week cut the cash rate by a quarter point to 3.85 per cent, easing pressure on mortgage holders grappling with living costs and interest repayments. Three other themes emerged from Mr Hauser's visit, in which he joined an RBA team based at the Australian embassy in Beijing responsible for "taking the temperature" of the Chinese economy. People felt the economy was finally turning a corner in early 2025, the scale, speed and scope of Mr Trump's tariff announcements were a shock, and China felt it had a strong economic hand in responding to tariffs, he said. Australia should not "count China out" despite a tariff war, a Reserve Bank boss says, with demand for iron ore tipped to remain high. Reflecting on a visit to China in April, RBA deputy governor Andrew Hauser says he encountered positivity from Australian companies despite Donald Trump having a week earlier announced he would impose tariffs of 145 per cent on the Asian giant. In Shanghai, he attended a discussion across retail, agriculture, banking, finance, law, health care, manufacturing and commercial property sectors. "What really struck me about that session was how upbeat most, if not all, of the firms were about the outlook for their businesses," Mr Hauser told the Lowy Institute in Sydney on Thursday night. "For anyone wanting to cut to the chase … I'll put it more bluntly: don't count China out." The central bank delegation heard similar sentiments in separate discussions with companies active in steel and iron ore. "They saw few threats to the scale and cost advantages of Australian ore, relative to other producers in the near term," he said. "Their central expectation was for Chinese steel output to remain relatively robust, remaining at or near one billion tonnes a year in the near term." China is by far Australia's biggest iron ore market and yields about $32 billion in export revenue every three months, according to the Department of Industry. There was also a sense among Australian companies that recent developments in trade policy could enhance their competitive position in Chinese markets, Mr Hauser said. The US tariffs on China were reduced to 30 per cent on May 12, but in forecasts released this week, RBA governor Michele Bullock noted the volatility meant there was an outside chance Australia could tip into a recession if the bank's worst fears came to fruition. The RBA this week cut the cash rate by a quarter point to 3.85 per cent, easing pressure on mortgage holders grappling with living costs and interest repayments. Three other themes emerged from Mr Hauser's visit, in which he joined an RBA team based at the Australian embassy in Beijing responsible for "taking the temperature" of the Chinese economy. People felt the economy was finally turning a corner in early 2025, the scale, speed and scope of Mr Trump's tariff announcements were a shock, and China felt it had a strong economic hand in responding to tariffs, he said. Australia should not "count China out" despite a tariff war, a Reserve Bank boss says, with demand for iron ore tipped to remain high. Reflecting on a visit to China in April, RBA deputy governor Andrew Hauser says he encountered positivity from Australian companies despite Donald Trump having a week earlier announced he would impose tariffs of 145 per cent on the Asian giant. In Shanghai, he attended a discussion across retail, agriculture, banking, finance, law, health care, manufacturing and commercial property sectors. "What really struck me about that session was how upbeat most, if not all, of the firms were about the outlook for their businesses," Mr Hauser told the Lowy Institute in Sydney on Thursday night. "For anyone wanting to cut to the chase … I'll put it more bluntly: don't count China out." The central bank delegation heard similar sentiments in separate discussions with companies active in steel and iron ore. "They saw few threats to the scale and cost advantages of Australian ore, relative to other producers in the near term," he said. "Their central expectation was for Chinese steel output to remain relatively robust, remaining at or near one billion tonnes a year in the near term." China is by far Australia's biggest iron ore market and yields about $32 billion in export revenue every three months, according to the Department of Industry. There was also a sense among Australian companies that recent developments in trade policy could enhance their competitive position in Chinese markets, Mr Hauser said. The US tariffs on China were reduced to 30 per cent on May 12, but in forecasts released this week, RBA governor Michele Bullock noted the volatility meant there was an outside chance Australia could tip into a recession if the bank's worst fears came to fruition. The RBA this week cut the cash rate by a quarter point to 3.85 per cent, easing pressure on mortgage holders grappling with living costs and interest repayments. Three other themes emerged from Mr Hauser's visit, in which he joined an RBA team based at the Australian embassy in Beijing responsible for "taking the temperature" of the Chinese economy. People felt the economy was finally turning a corner in early 2025, the scale, speed and scope of Mr Trump's tariff announcements were a shock, and China felt it had a strong economic hand in responding to tariffs, he said.
ABC News
22-05-2025
- Business
- ABC News
China relaxed about Trump's tariff threat
Business editor Michael Janda says RBA deputy governor Andrew Hauser reveals a graph in his speech showing America is far more dependent on China.
Perth Now
22-05-2025
- Business
- Perth Now
Australian firms 'upbeat' China can navigate trade war
Australia should not "count China out" despite a tariff war, a Reserve Bank boss says, with demand for iron ore tipped to remain high. Reflecting on a visit to China in April, RBA deputy governor Andrew Hauser says he encountered positivity from Australian companies despite Donald Trump having a week earlier announced he would impose tariffs of 145 per cent on the Asian giant. In Shanghai, he attended a discussion across retail, agriculture, banking, finance, law, health care, manufacturing and commercial property sectors. "What really struck me about that session was how upbeat most, if not all, of the firms were about the outlook for their businesses," Mr Hauser told the Lowy Institute in Sydney on Thursday night. "For anyone wanting to cut to the chase … I'll put it more bluntly: don't count China out." The central bank delegation heard similar sentiments in separate discussions with companies active in steel and iron ore. "They saw few threats to the scale and cost advantages of Australian ore, relative to other producers in the near term," he said. "Their central expectation was for Chinese steel output to remain relatively robust, remaining at or near one billion tonnes a year in the near term." Further Chinese policy stimulus was expected to continue to involve steel-intensive infrastructure investment, despite the pivot to consumption, he said. China is by far Australia's biggest iron ore market and yields about $32 billion in export revenue every three months, according to the Department of Industry. There was also a sense among Australian companies that recent developments in trade policy could enhance their competitive position in Chinese markets, Mr Hauser said. The US tariffs on China were reduced to 30 per cent on May 12, but in forecasts released this week, RBA governor Michele Bullock noted the volatility meant there was an outside chance Australia could tip into a recession if the bank's worst fears came to fruition. The RBA this week cut the cash rate by a quarter point to 3.85 per cent, easing pressure on mortgage holders grappling with living costs and interest repayments. Three other themes emerged from Mr Hauser's visit, in which he joined an RBA team based at the Australian embassy in Beijing responsible for "taking the temperature" of the Chinese economy. People felt the economy was finally turning a corner in early 2025, the scale, speed and scope of Mr Trump's tariff announcements were a shock, and China felt it had a strong economic hand in responding to tariffs, he said.
