Donald J. Trump has swept to power in the United States for a second term with a mandate, unrivalled in its scope, to shake things up for the American – and by association, the global – economy.

Having secured every battleground state for the Electoral College, Trump has also claimed a senate and house majority for the Republican Party, giving him a golden highway to shape policy into whatever he likes. His ‘Make America Great Again’ platform looks set to go toe-to-toe with trade partners with new deals, including blanket tariffs on imported goods that Trump says “hurts America”.

While Australia would not consider itself a primary target of these trade policies, it could easily feel the ripples of it and the impact for Australian agriculture could be profound.

Exchange Rates

Trump’s re-election to the presidency had an immediate positive impact on the US Dollar across major currency pairs, including the Aussie dollar.

A weak Australian dollar helps local exporters by making their commodities more competitive on the global market, especially where quality and availability is also key.

Farmers may see upward pressure on input prices should the Aussie remain weaker for longer.

Inflation and Interest Rates

Fiscal policies under the new Trump administration is said to be a threat to US inflation which could also trigger other price outbreaks arund the world.

With the president unlikely to retreat from or revise any election campaign ambitions, it would be left to global central banks to tighten monetary supply with higher rates.

Trump has said publicly he’d like a say in setting official interest rates, but experts indicate that a loss of independence of interest rate decisions may end up fuelling inflation further.

Trade

The president-elect has strongly signalled his intention to impose tarriffs on imports to ensure American jobs are kept there. While this may not directly impact Australian agriculture negatively, trade wars may ensue which could entangle our largest trading partner, China.

Retaliatory trade tarriffs from China, who have recently lifted a host of tarriffs on agricultural products including barley, wine, and beef, could set back the industry years.

War

Trump confidently says he can end the war in Ukraine in a day, but even if he could strike a deal the devil in the details could have ramifications for Australia.

Any armistice that includes ceding agricultural land to Russia could increase commodity price volatility.

In the Middle East, Trump administration policies could impact oil prices, adding to price pressure for energy and inputs while potentially undermining biofuel demand.