She's On The Money - Trump, Tariffs, and Taxes

Episode Date: November 15, 2024

Donald Trump’s imminent return to the Oval Office has already set off waves across global markets—but what does it mean for us here in Australia? In today’s episode, Victoria takes a deep dive into Trump’s policies and the surprising ways they could impact our economy, our rights, and our wallets. Join us as we unpack what’s happening across the Pacific and what it means for your wallet. Acknowledgement of Country By Natarsha Bamblett aka Queen Acknowledgements. The advice shared on She's On The Money is general in nature and does not consider your individual circumstances. She's On The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. If you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs.  Victoria Devine and She's On The Money are authorised representatives of Money Sherpa PTY LTD ABN - 321649 27708,  AFSL - 451289.See omnystudio.com/listener for privacy information.

Hello, my name is Natasha Nabanunga-Bamblett. I'm a proud Yorta Yorta, Kernai, Wolperi and Awadjeri woman. And before we get started on She's on the Money podcast, I would like to acknowledge the traditional custodians of the land of which this podcast is recorded on Awadjeri country, acknowledging the elders, the ancestors and the next generation coming through. As this podcast is about connecting, empowering, knowledge sharing and the storytelling of you to make a difference for today and lasting impact for tomorrow. Let's get into it. She's on the money. She's on the money. hello and welcome to she's on the money the podcast that's here to make sense of every

financial shake-up out there and yes that includes the ones happening across the pacific Today, after a little while, I've decided to dive into one of the biggest headlines of 2024, Donald Trump's return to the Oval Office. My friends, my name is Victoria Devine and I have had so many of you sliding into my DMs asking me to make sense of what is happening in the US and how it will affect us here in Australia. And I get it. The US is a huge player on the world stage and when big shifts happen there, we often feel the effects over here too. You might be thinking, how did people vote for him? Trump's track record includes policies harmful to women's rights. He's been vocal in his opposition to reproductive rights, pushed for conservative

justices who support rolling back access to abortion, and has consistently dismissed or minimised gender equality issues. But here's the thing. Trump has made some big promises about tackling the cost of living crisis, and regardless about whether his policies are going to help, for many Americans, that message struck a chord. With inflation, rising energy prices and everyday costs hitting harder there than they even are here, he campaigned on a platform that promised relief, pledging to lower taxes, reduce energy costs by supporting oil and gas production and cut back on regulations that he argued drove up prices. For people struggling to make ends meet, these promises offered a really beautiful glimmer of hope and they voted in the way that they felt

most likely to ease the squeeze on their wallets. In a lot of ways, it's a reminder that economic pressures can powerfully influence voting decisions. So let's start with one of Trump's biggest selling points, you could say, tariffs, especially on China. For many of his supporters, the idea of tariffs seemed like a way to make China pay. But here's the catch. It's not actually China that ends up paying these tariffs. It's American businesses and consumers who bear the cost as tariffs make imported goods more expensive. And here's where it gets interesting. Since Trump's win, searches for what is a tariff have absolutely spiked. A lot of people are realising that these tariffs might not work in the way that they originally thought.

So, while the idea of tariffs was a huge part of Trump's platform, the reality is they could slow down economic growth and create ripple effects that reach all the way here to Australia. China is our largest trading partner, and if the US enacts those tariffs and tensions with China flares up, Australia's economy could actually feel the pinch. Think of it this way. Australia's mining sector, our agriculture and energy sectors heavily rely on exports to China. If China's economy slows down or if they retaliate against Trump's tariffs, that could mean fewer Aussie exports, which significantly impacts our GDP. Basically, less demand for things like iron ore and coal means less money flowing back

into Australia. And it's not just China that's likely to be affected either. Trump's approach to trade might actually trigger similar responses in other countries, creating what we could call a ripple effect of economic slowdown that reaches all the way back to us. We're talking potential drops in job growth, higher prices on imports, and just a whole lot of uncertainty. All right, let's get into Trump's plan to cut the US corporate tax rate from 21% to 15% and how that might actually change things up a bit globally, especially here in Australia. So lowering the corporate tax rate means that the US is a lot more attractive for businesses, potentially pulling in more multinational corporations and really big investors

who are eyeing that lower tax bill. Now in Australia, we have a 30% corporate tax rate for larger companies, which suddenly looks pretty high in comparison. So if Trump's tax cut goes through and they get to pay half of the tax that we do, it could pressure Australia to consider a similar tax cut to stay competitive. What's the risk there? Well, without tax revenue from those big corporations, the government might have to make up for it by cutting spending or raising other taxes. And it's not just about tax rates. This change could actually impact where companies are choosing to invest and expand. Australian based multinationals, for example, they might find that the US tax environment is a little bit more enticing. And so they channel more of their

profits through to the American operations to take advantage of that lower rate. This could mean less capital flowing into the Australian markets and potentially, maybe I'm being dramatic, but potentially fewer jobs created here if companies prioritise their US divisions. Plus, if US businesses are going to start to grow rapidly due to tax savings, they might not reinvest domestically, which might limit the flow of foreign investments into Australia. On the flip side though, a stronger US economy could mean more demand for Australian exports, like our minerals and our gas and our agricultural products. So if Trump's tax cuts actually spur growth, Australia might actually see increased trade

opportunities. But as always, that is going to depend on whether the US can manage these changes without too much disruption. And that's a big if. So while Australia might feel the pressure to lower our corporate tax rate, the impact of a decision like that would actually run really deep and it would affect everything from government services to wages and to our employment rates. All right, guys, I could go on and on about this for literally ever. I'm going to take a really quick break and on the flip side, we'll dive right back in. All right, we are back. And another major policy from Trump that could actually shake up the U.S. economy and ripple out globally is his plan to deport millions of undocumented immigrants.

This could actually worsen inflation in the US, which has managed to tame rising prices partially thanks to a strong influx of immigrant workers filling crucial labor gaps. Immigrants have made up a huge share of New York workers in recent years, especially as baby boomers retire, helping companies hire and grow without pushing inflation higher. Financial markets, meanwhile, are already in, I guess, brace mode for these potential changes. Investors are expecting US interest rates to climb in response, which could create a ripple effect that ultimately influences the Reserve Bank of Australia's decisions. In short, Trump's policies could mean our interest rates stay higher for longer, impacting literally everything from home loan costs to business

borrowing and added pressure to household budgets all across Australia. Trump's return to office has already caused a bit of a stir in the stock market, with traders responding to his pro-business and deregulation stance. Markets spiked, particularly in sectors expected to benefit from his policies like oil drilling and financial services, even crypto, as investors bet on Trump's promises of tax cuts and looser regulations. His policies are expected to be very, I guess, business-friendly, particularly for big banks and corporate mergers while crypto stocks saw a massive boom with the expectations that Trump will be bringing in a more crypto tolerant SEC chair. On the other hand sectors like renewable energy and electric vehicles took a hit reflecting concerns that

Trump's administration will reduce subsidies and then favor oil over green energy. Companies related to mass deportation efforts like private prison operators surged as Trump's immigration stance indicates potential expansion in detention services. All in all, it's pretty clear that Trump's policies are already shaping market expectations in a really big way. Beyond, I guess, the market trends, Trump's policies reveal, I guess, deeper dynamics, one that reinforces traditional power structures and often leaves women and marginalized groups on the back foot. When policies prioritize corporate gain over protections, they're part of a system that has consistently restricted our choices and undermined our autonomy. So let's see this as,

I guess, a call to action. By mastering our finances, we are able to break free from these constraints and build the freedom that makes decisions that serve us, not just keep those people at the top. But I guess here's the reality. Everything that we've covered today, from Trump's economic priorities to his stance on women's rights is a reminder that these power structures are still working against us. Historically, financial systems and political policies have been designed to sideline women, limit our options and keep the scales tipped in the favour of entrenched power. But here's where we flip the script, my friends. By mastering our financial literacy, we are taking back control. We are taking back our power. Building financial

knowledge isn't just about managing money. It's about challenging a system that expects us to play small. When we know how to invest and save and budget with confidence, we're not just securing our futures. We're refusing to be sidelined by policies that just don't have our interests at heart. Financial literacy is a radical act of self-empowerment. It's how we fight back against leaders who often overlook or completely undermine our rights. Every single dollar we invest and every financial goal that we achieve is a statement that we won't be limited by our decisions made in rooms that we're excluded from. So let's use our financial knowledge to dismantle these structures little bit by little bit and build our own systems of power. True independence, true strength lies in

knowing that our futures are firmly in our own hands, not in the hands of leaders who don't have our best interests at heart. Before I leave you, though, I wanted to, I guess, end on some good news that I've pulled out of this election. Seven states voted to enshrine the right to abortion in their constitution. So Colorado, New York, Maryland, Montana, Nevada, Arizona, and Missouri. That's right. Even in the midst of big changes and challenges, there are powerful reminders that progress is still possible. The fact that seven states took a stand to protect reproductive rights

shows that despite setbacks, people are pushing back and making their voices heard. Let's keep that momentum going. Change might be slow, it might feel really slow, but every step we take counts. Policies may shift, but our commitment to our values and our future. It's rock solid. So let's keep pushing for a fairer, stronger future, one where we have the knowledge, we have the confidence and we have the power to make choices that truly serve

us. My friends, that is all from me today. But please don't forget to subscribe so that you never miss out on an episode. Keep learning, stay strong and remember, financial freedom is our most powerful tool. Have a really good weekend, my friends, and I'll see you bright and early for Monday Money Diary. The advice shared on She's on the Money is general in nature and does not consider your individual circumstances. She's on the Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. If you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs. Victoria Devine and She's On The Money are authorised representatives of Money

Sherpa PTY LTD ABN 321 649 27708 AFSL 451 289.