Latest / Best of Business / Brad Olsen: Infometrics Principal Economist on Donald Trump's proposed tariffs for Mexico, Canada and China

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Brad Olsen: Infometrics Principal Economist on Donald Trump's proposed tariffs for Mexico, Canada and China · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks. There'd be
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  Speaker 2: Now. Donald Trump, as I told you earlier, has already
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  Speaker 2: promised on social media today that he's going to hit
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  Speaker 2: Mexico and Canada with a twenty five percent tariff on
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  Speaker 2: all all our products coming into the USA. You'll do
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  Speaker 2: that on the first day, and if China doesn't stop
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  Speaker 2: the illegal drug trade, they're going to hit with ten
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  Speaker 2: percent on top of everything else. Informeatric's principal economist, Brad
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  Speaker 2: Olson is with us.
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  Speaker 3: Hey, Brad, good evening.
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  Speaker 2: I didn't realize that we would be exposed to this directly,
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  Speaker 2: but I mean, by the looks of things, Fisher and
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  Speaker 2: pikel they do manufacturing in Mexico and so they and
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  Speaker 2: then important to the export into the US, so they
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  Speaker 2: could be hit, can they?
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  Speaker 3: That's right? And I think you know it's becoming clearer
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  Speaker 3: and clearer now that any changes or any moves in
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  Speaker 3: the trade space do have ramifications for US, either directly
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  Speaker 3: or indirectly in terms of how trade activity plays out.
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  Speaker 3: I think surprising as well. You'll remember I think he
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  Speaker 3: had probably a conversation that we had a couple of
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  Speaker 3: weeks back wondering, you know, would this actually be the
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  Speaker 3: sort of policy that Trump would implement quite quickly, because
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  Speaker 3: he'd been talking about you know, retribution and deportations and
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  Speaker 3: similar quite a lot before then. But it looks like,
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  Speaker 3: again the tariff policy is not so much an economic policy,
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  Speaker 3: it's more again part of you know, the retribution going on,
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  Speaker 3: and in this case it's around open borders and sort
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  Speaker 3: of drug access, and Trump saying well, look, if you
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  Speaker 3: know these are fental and similar still comes over the borders,
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  Speaker 3: then these tariffs will remain so still big, big ramifications,
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  Speaker 3: And the fact that the pre incoming US president wants
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  Speaker 3: to do that on day one does highlight that we're
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  Speaker 3: in for quite a ride when it comes to these
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  Speaker 3: sort of trade flows and trade changes.
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  Speaker 2: But okay, so immediately immediately there's reaction, right, our dollar
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  Speaker 2: drops against the US by something like a third of
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  Speaker 2: a US sense, and then it recovers a little bit,
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  Speaker 2: and there's a drop off in Fisher and Pickels. Is
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  Speaker 2: are people overreacting to what he says because he might
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  Speaker 2: just be chatting like he.
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  Speaker 3: Does, oh exactly. I think to be honest that the
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  Speaker 3: market reaction is probably pricing in a bit of that jitteriness.
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  Speaker 3: So I suspect that, you know, if this was already
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  Speaker 3: as signed, sealed, delivered document, they'd probably be a much
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  Speaker 3: stronger market reaction than we've seen. So I think what
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  Speaker 3: you are seeing is people going okay, this is more
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  Speaker 3: of a live conversation than it might have been, say
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  Speaker 3: a week ago, but definitely not locked in. You saw
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  Speaker 3: that in the likes of the share markets, particularly cross
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  Speaker 3: parts of Asia as well, going okay, this is going
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  Speaker 3: to be, you know, a bit more of a direct
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  Speaker 3: sort of focus coming through, particularly with the additional ten
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  Speaker 3: percent tariff being levied on China apparently. And again we'll
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  Speaker 3: sort of wait and see what happens day one, day two,
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  Speaker 3: But you're right, there is a lot of uncertainty, a
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  Speaker 3: lot of questions out there. I think the thing that
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  Speaker 3: probably we're thinking about a lot in New Zealand is one,
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  Speaker 3: as you've just profiled with Fish and Parka, you know,
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  Speaker 3: where is that exposure for us potentially indirectly, but also
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  Speaker 3: if tariffs do come through and they are widened outside
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  Speaker 3: of Mexico, Canada and China, what sort of potential is
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  Speaker 3: there maybe for New Zealand to get an exemption, because
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  Speaker 3: that will be probably that's going to be the hot
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  Speaker 3: ticket or the hot property item when it comes to
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  Speaker 3: trade negotiations, because Trump does look likely to put some
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  Speaker 3: of these bigger tariffs.
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  Speaker 2: On interesting Brad, thank you very much, appreciate it. Brad Awsome,
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  Speaker 2: Infametrix Principal Economist.
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