Analysts say Trump’s victory will be good for global stock markets, increasing pressure in Australia to cut corporate taxes and deregulate issues ranging from financial markets to the energy sector.

It will also benefit certain sectors such as Bitcoin and the development of the digital asset sector.

But for Australia, the impact of tariffs of up to 60 per cent on imports from China and the prospect of a new US/China trade war will have particular concerns about the Chinese economy and its demand for Australian exports such as iron. ore, coal, LNG and food.

“Trump is seen as much more business friendly,” said Karl Morris, chief executive of stockbrokers Ord Minnett. Australian.

“We have seen a strong rally in some key sectors and stocks that could benefit from a Trump win.

“Examples include Block, which has a strong connection to cryptocurrencies, which have seen a strong rise with Trump’s support.”

The prospect of Trump winning has also seen a rally in stocks that have reacted positively to higher bond yields, including insurance companies IAG, QBE and Suncorp, as well as Computershare and Challenger, he said.

James Hardie said Australian shares linked to US housing, including BlueScope Steel, Reece and Reliance Worldwide, were also rising on the prospect of a Trump win.

But there were fears that some Trump policies could stimulate inflation, pushing bond yields higher. Australian property and infrastructure shares weakened on expectations for higher returns.

Energy contractor Worley has jumped on expectations of higher spending in the oil and gas sector.

But Australian energy producers including Santos and Woodside fell on concerns about the impact of increased US energy production on energy prices.

Australia’s major mining companies including BHP, Fortescue and Rio Tinto. They have also been more lenient on possible concerns about China’s growth prospects under the Trump administration.

Trump’s presidency is expected to provide a significant boost to the US mining industry in terms of deregulation; BHP and Rio Tinto could potentially benefit if the proposed Solution copper mine in Arizona gets the green light. Work on the mine, which could become North America’s largest copper producer and meet 25 percent of its needs, has stopped while awaiting approval from the Biden administration.

Rio and BHP jointly own the proposed project in Arizona, a giant underground mine east of Phoenix with one of the largest untapped copper deposits in the world.

Companies have spent more than US$2 billion ($3.1 billion) on development and permitting activities for the project, which could produce 40 billion pounds of copper concentrate over 40 years if it goes ahead.

But the two companies, which are among the largest exporters of iron ore to China, could also be affected if Trump’s trade war with China spills over into an even more stagnant Chinese economy.

Trade Minister Don Farrell this week expressed concerns about the impact of US tariffs on China on Australia.

James Laurenceson, director of the Australia China Relations Institute at UTS in Sydney, said the adverse effects of US tariffs on goods from China could negatively impact demand for Australian products sold to the country.
domestic economy.

“If Trump continues to impose 60 percent tariffs on all Chinese goods, that would clearly be a negative blow to the Chinese economy,” he said. Australian.

“The bigger concern for Australia than iron ore prices is how the spiraling US-China trade war could further negatively impact Chinese consumer confidence, which has never recovered from harsh Covid restrictions in 2022.

“This would be bad news for Australian wine, beef, lobster and tourism.”

But he said he would “warn against catastrophizing” the Trump administration’s trade impact.

“These days, exports to the United States account for only 15 percent of China’s total exports, and total exports have fallen to about 20 percent of China’s GDP; So we’re talking about goods worth 3 percent of GDP being at risk.

“Exchange rates may also be regulated and domestic stimulus initiated to cushion the blow.”

He said if Trump significantly increases tariffs on Chinese imports, Australian leaders will have to acknowledge that the US has “launched a major assault on the rules-based trading system that serves Australia’s trade”.
“He took very good care of me.”

“Ironically, this could open up space for Australia and China to strengthen cooperation with other like-minded countries in the region and preserve as much of this system as possible while Washington goes rogue.

“The US is not a major market for Australia and so our main interest is to preserve the health of the regional economic order.”

The Trump presidency is expected to deal a major blow to the Bitcoin industry.

Mr Trump has threatened to replace Gary Gensler, the chairman of the US Securities and Exchange Commission, who is skeptical of cryptocurrencies, and invest some US Treasury assets in Bitcoin.

He has also promised to encourage mining of Bitcoin and other cryptocurrencies and potentially deregulate the industry.

“If it does all this, the industry will experience a significant expansion in terms of global market capitalization and integration into existing financial markets,” said cryptocurrency expert Liam Hennessy.

Mr Hennessy, a Brisbane-based partner at law firm Clyde & Co who is an adjunct professor of law at Griffith University and an advisor to the Dubai Future Foundation, said a change in Bitcoin policies in the US could influence the thinking of Australian policymakers. on the sector.

“This could lead to changes in approach (in Australia) that have so far reflected the more hawkish US approach to industry regulation.”

But he said the development of Bitcoin and other cryptocurrencies in the US and globally will also have an impact on energy consumption.

Sydel Sierra, founder of Digital Wealth Group, said a Trump presidency will see a bull run in Bitcoin prices.

“Bitcoin has reached an all-time high,” he said.

“If you want proof of the Trump effect, this is it.

“Almost every analyst was predicting a surge in crypto if Trump won, and that was due to his bullish rhetoric on it, but that is another thing; It’s a sea of ​​green.”

“I expect Bitcoin to reach $220,000 within the year. Ethereum is likely to reach $15,000.

“Trump has already said he wants to deregulate the SEC and crypto markets, so these comments alone are reassuring. “The bull run starts now.”

The Trump presidency is expected to see a major setback in global pressure on climate change policies; Mr Trump will potentially cancel the US pledge to reach net zero by 2050, which could have policy implications for Australia.

He also threatened to repeal the US Inflation Reduction Act, which provides financial aid to projects deemed to help climate change.

Paul Scurrah, chief executive of rail company Pacific National, said Trump’s victory would reduce pressure to decarbonise the economy.

Deregulation policies could also be more attractive to biotechnology company CSL if Mr. Trump takes a more liberal approach to price controls.

TechnologyOne CEO Edward Chung said Trump’s presidency will continue “aggressive America First policies.”

This article was first published in The Australian on Thursday 7 October.

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