Last Friday, Australian time, the US placed another US$16bn worth of tariffs on imported goods from China. The real possibility of tariffs on a further US$200bn of Chinese imported goods into the US remains a far more significant risk to global economic conditions.1
Data released by the Australian Bureau of Statistics (ABS) reveals wage growth is still persistently weak, while unemployment is trending down in most jurisdictions.
While the threat of a trade war lurks darkly in the corner, the good news is that, regardless, the global economy is still pushing strongly ahead.
Governments and businesses around the world have expressed alarm at the possibility of a trade war developing from the planned US tariffs on steel and aluminium.
KPMG Economics’ global macroeconomic modelling suggests Australian GDP will be permanently reduced by 0.3 percent in the medium term as a direct consequence of the U.S. tax reforms. This equates to A$5bn and 25,000 jobs lost.
KPMG Economics in its final Quarterly Economic Outlook of the year has revised its forecasts for the global economy to 3.5 percent growth for 2017 and rising to 3.7 percent in 2018.
What Australia produces, and how much we produce it for, are both factors in how successful we will be as a country in the global marketplace.