MB Fund Podcast: Trade War Explodes

This week’s LIVE webinar (12:30pm AEST, Thursday 23rd May) reviewed the escalation between global powerhouses USA and China.
Is this the Cold War 2.0?
What is the US trying to achieve?
How might it play out and some potential scenarios
How are these events likely to impact investment in the near future?
So join MB Fund’s Head of Investments Damien Klassen, Chief Strategist David Llewellyn Smith, and Tim Fuller as give an update on the stoush of the new century.
Slides can be found here.


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Comments

  1. How do you not lose anything in manufacturing if you devalue? the costs rise for materials for those factories if imported you turkey.

    • for most components we have raw materials. Low AUD will probably encourage to manufacture components at home.
      But without tariffs we could not protect manufacturers from appreciating AUD sometime in the future.

    • Damien KlassenMEMBER

      Not sure this is a topic that can easily be dealt with in a comment. Maybe the simplest example is to look at what happened in the early 2000s when the AUD rose from the low $0.50s to $1.00 USD. By your logic more manufacturers should have been opening in Australia as the input costs were falling – but the opposite happened, we lost our entire car industry. The major reason is that many commodities are priced globally (so if you are exporting finished products then the raw material input costs don’t make a competitive difference between countries), but other inputs into manufacturing costs (labour is often the largest) are priced locally and so the effect of these other manufacturing costs is what determines whether a country’s manufacturing is internationally competitive.

  2. has a country surrendered sovereignty from a trade war before? could be another first for australia 🇦🇺

  3. – There are dertainly a number of signals that the US is actively seeking a confrontation with China. And that confrontation seems to going beyond “economic targets” (i.e. military confrontation).

  4. – I am not convinced that US natural gas exports are a serious competitor for australian gas exports.